Amazon and Apple in eBook fight ahead of iPad launch
A battle over eBook pricing is about to kick off, with Amazon facing a sizable opponent in the shape of Apple. But it isn’t about to give up without a fight, apparently playing hardball with publishers.
Amazon has had the eBook market pretty much to itself up to now, with no competitors having anywhere near the clout the online bookseller does. In fact, Amazon currently controls 90 percent of the e-book market. Which is no small feat.
However, that’s about to change with the launch of the iPad and the iBooks application on April 3. Apple is going to have a big say in how the eBook market evolves from this point. And Amazon knows it needs to fight back or risk the iPad completely wiping the Kindle eBook reader out.
The New York Times spells out exactly what lengths Amazon is willing to go to to fight off Apple’s charge on the market.
Amazon has so far employed a wholesale approach to selling eBooks, which means it buys books at an agreed price and then sets the prices itself, often heavily discounting the best selling titles. Apple is doing things differently, using an agency approach, which means the publishers set their own prices, and takes 70 percent of the money. Apple takes a 30 percent commission.
Five of the big six publishers have reached deals with Apple, and that has meant Amazon has had to release its hold on them. But it’s asking the publishers to sign three-year contracts as a result, and the publishers aren’t happy doing so in light of how rapidly the eBook market is changing. As a result, Amazon is threatening to cease selling books by these publishers altogether.
Small publishers are also being heavily leaned on, with Apple telling them they have to choose between an agency or wholesale model. Amazon is pressuring them not to side with Apple.
This all adds up to a battle for control of the eBook market. Both Amazon and Apple think they have the biggest hold over publishers, and are trying to exert that hold to direct the market a certain way. The big game changer will be if the iPad really takes off and sells to the mainstream as well as the early-adopters. If so, then I expect Apple to gain control of the market in the same way it has managed with digital music sales.
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March 20th, 2010
The iPaq is a deliberately crippled device to keep it from stepping on Apples other hardware. It would be bad news indeed for Apple to get such a position.
The mp3 was widely used and supported in the hardware of many models from a diverse collection of vendors.
March 20th, 2010
That merely shows the marketing genius of Apple, aquaadverse…