Amazon Surrenders to Macmillan

by Yvette King
January 2010

A weekend was all it took for Amazon.com to give in to Macmillan. In a bold move Amazon stunned the publishing circuit when they removed both Kindle editions and printed books published by Macmillan—who is one of the largest publishing companies across the states—who basically wanted to set higher prices for their e-books. Previously, Amazon had always set the e-book prices itself and $9.99 was their standard price.

On Friday, Amazon dropped the “buy” button on all of Macmillan titles, which included: Section 8 by K’wan and Twisted by Tracy Brown. Consumers could only purchase titles through third-party sellers.

The iPad has already changed the game for publishers and it won’t be available for purchase until it is released in March. Before the recent big announcement of the iPad and its ensuing iBookstore, Amazon had the market cornered with their Kindle and the ability to sell e-books for a standard price of $9.99. Macmillan attempted to negotiate with Amazon for the past year to allow for prices to vary and be set by the publisher. At the iPad launch, it was announced that five of the major publishers inked a deal with iPad, which would allow them to charge different prices for their products that will be sold in iBookstores.

In a statement given over the weekend, Amazon said they would accept Macmillan’s decision: “We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books.”

Macmillan has told Amazon in no uncertain terms that they will change the price point in early March between $12.99 to $14.99. With these prices, it has been reported that Amazon will get a 30% commission on the e-books sold on their site. Amazon has reluctantly agreed to the ultimatum given to them by Macmillan and will offer their titles once again. Amazon has made it no secret they believe the new prices are unnecessarily too high but they have succumbed to the pressure because after all this is about business. They are hoping that consumers will take a stand and not purchase the higher priced titles. They also don’t want the other publishers to follow suit but that is highly unlikely now that they know Amazon would rather have their titles available. Amazon is putting their faith in self-published authors and independent entities to consider maintaining their current prices or being more competitive and even lowering them to be more attractive for readers.

Amazon was basically losing money by selling e-books at $9.99 but their Kindle is where they made up the difference. Now that they have a new competitor with the iPad, they will have to rethink this strategy and come up with alternate ways to sell their e-reader.

Read the initial story:

[ Amazon Pulls Books from Virtual Shelves ]

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VJ :

Posted 750 days ago

THANKS FOR THE USEFUL INFORMATION.... I WILL MOST CERTAINLY PASS IT ALONG!

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