Amazon caves to Macmillan over e-book pricing
In a surprising turn of events, it seems you can push Amazon around if you really try.
As we reported the other day, Macmillan books were pulled from the Kindle store in what was rumored to be a price dispute between the publisher and Amazon. Amazon has been dictating the pricing of the books since the Kindle launched, and has even taken a loss on some books just to make sure the price stayed at $9.99 or lower. It seems that this was no longer satisfying Macmillan, and it demanded that the price be raised to as high as $15 on some books.
After Amazon pulled the books, Macmillan took out a full page ad in Publisher’s Lunch to explain the company side of things, and this might have played a factor in Amazon finally acquiescing to the publisher’s demands. Amazon released a statement on the Kindle community boards to announce the decision:
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!
As Silicon Alley Insider pointed out, authors are going to come out worse in this deal due to the recently announced new royalty system that rewarded authors for the price of their books staying under $9.99.
While no other publishers have yet announced similar demands from Amazon, it won’t be surprising to see it happen in the coming days now that one of them has won a victory.
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