By Edward Nawotka
The battle may already be over in the burgeoning saga of Amazon v. Macmillan (standing in for the rest of the publishing world) which saw Amazon stop sales of Macmillan titles after the publisher told Amazon it wanted to change it’s terms of business, moving to an agency model.
On Sunday Amazon posted a letter to its customers on one of its forums. In the letter Amazon says “ultimately,” it will “have to capitulate and accept Macmillan’s terms.” The letter — which came courtesy of Publishers Lunch — reads as follows:
Dear Customers:
Macmillan, one of the “big six” publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.
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. Amazon customers will at that point decide for themselves whether they believe it’s reasonable to pay $14.99 for a bestselling e-book. We don’t believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative.
Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!
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Anthony S. Policastro
5 months ago
The dark side to all of this is greed. These publishers are going against the natural laws of the market by forcing a higher price for ebooks on an already well accepted market price of $9.99.
One of the major reasons for the attractiveness of the Kindle is the $9.99 price for mainstream book titles. For the price of one hardcover book, a Kindle owner can have three major titles. I know many Kindle owners who have filled up their Kindles to capacity because of this low price and I know of others who easily spent upwards of $300 plus on Kindle titles.
These publishers are following the same path as the music industry – attempting to raise prices beyond what the market has deemed the comfortable price point. And they are using the same lame excuses – the publishers claim the low ebook prices are hurting hardcover sales; the music industry claimed the low price of downloadable songs cut into their CD sales.
Both are false. Many young people do not read books today preferring to get their content on video games, the Internet, ebook readers or on mobile devices. The older generations buy fewer books because of the high price of hardcover titles and wait for the paperback versions.
The trend is clear – sales of ebooks and electronic content are exploding; sales of print books are decreasing. This is the reality of the market, but the book publishers refuse to accept this.
Instead, they see an opportunity with the iPad to further preserve and hopefully bolster their failing business model – to give the booksellers as many printed titles as they want on consignment and allow them to return what they don’t sell at no cost to the bookseller.
They believe the higher ebook price will cause people to buy the hardcover version. I don’t think so. I believe they will only decrease sales of both versions. The $9.99 and lower price point will prevail.
The iPad pricing model is also bad news for mid list and back list authors because with the higher ebook prices only the major titles by the bestselling authors will sell, again closing the door to many unknown authors with good content.
If Amazon raises the prices of their books to be in line with these publishers, it will turn the ebook business model into the failing print book model – where publishers depend on bestsellers to support their businesses and publish fewer and fewer unknown authors.
See the rest of my post at http://www.outerbankspublishing.com