Amazon Removes Macmillan Books from Store: eBook Wars Begin

sucker-punchThat didn’t take long.

In the video that Xavier posted yesterday featuring Walt Mossberg talking with Steve Jobs after the iPad announcement, Mossberg asked Jobs about the price of eBooks in the iBook Store. His question focused on the announced $14.99 price vs. Amazon’s $9.99. Jobs answered with a cryptic comment that the prices will be the same that led to speculation that eventually iBook prices would drop, or that Amazon prices would rise.

Now we see the impact of that.

Jobs and the iPad/iBook Store are providing some negotiating leverage for publishers who are already unhappy with Amazon’s pricing. Apple is going to allow publishers to set their own prices. Apparently MacMillan Publishing has been working to get Amazon to raise book prices to $15 and the negotiations aren’t going that well, evidenced by the news that Amazon has pulled all Macmillan books from its store as of yesterday.

Jobs and the iPad have fired a large salvo at Amazon and Amazon has answered back. This is only going to continue. Of course customers are in the middle. Interesting that usually competition works in favor of consumers regarding prices, but it looks like the eBook competition spurred by the iPad and iBooks might have a different outcome.

Via The New York Times

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Comments

  1. GoodThings2Life says

    Probably not Amazon’s smartest move to dump a publisher that way when the publisher has somewhere to run…

  2. Ben says

    Is $15 really that expensive for a book? I can’t understand why everyone has this “ZOMG I won’t pay more than $10 for a book!” mentality. Different books should have different prices…because they are different. A no-name author’s book shouldn’t be the same price as a popular author’s book; a 50 page book (probably) shouldn’t cost the same as a 1000 page tome. While ebooks shouldn’t cost as much as paper books, they shouldn’t be dirt cheap, and they shouldn’t be arbitrarily stuck at a $10 price point.

    If amazon, apple, and publishers are going to fight about this to the point of shutting each other out, then some sort of reexamining of the situation needs to happen.

  3. Paul Harrigan says

    It’s a risky move by Amazon, but this is not a minor player we are discussing, so they have some clout too. This is just a way of the parties negotiating, and it is clear there is a lot of negotiating to be done.

    When a publisher sells a book to a bookstore chain, the publisher puts a suggested price on the flyleaf but then loses control over the price. The chain can, and sometimes does, set a very different price (usually lower, since competition would make it difficult for the price to be higher).

    Amazon has simply taken that to a different level, in order to encourage the use of Amazon for books, I suspect. They charge a flat price. Slowly, competitors, like Sony, had been falling into place.

    This creates a classic industry battle over who controls prices to the consumer — the publisher or the final seller. There is not a “right” or “wrong” about this. It’s a matter of competing business models of who gets the lion’s share of the profits on the most profitable new releases. This is new industry and the answer to that has not been established. Hence, the battle with Amazon is almost inevitable.

    I hope Amazon wins. It will be better for the consumer and, in the long run, for the authors as well.

  4. Dave-in-Mi says

    Barnes & Noble is still in the picture, too, and they all have to keep in mind the original eBook source: hundreds of public libraries that allow free “borrowing” of a large selection of eBooks. Publishers may want to sell eBooks at close to hardcover prices, but it ain’t gonna happen.

  5. bluespapa says

    Publishers have been asleep for over a decade. They could have been figuring out what they need for the ebook market, who the ebook market will likely be, and how they can deliver their goods to maximize profits. There’s no reason Amazon should have emerged as the biggest player.

    There’s also no reason that the textbook market should have such a pitiful and outrageous business model.

    However, it is a complex market. It isn’t just that known authors get more money, and unknown get less, or that shipping a book with more pages should be more expensive than one with fewer. The questions of how to market a book are enormous. With paper, mass market editions are half as much as trade paper editions, which are less than hardback editions. Probably no writer has ever been satisfied by the marketing a publisher has put behind a book. It’s also not a huge industry in terms aggregating the bottom line.

    Publishers have not figured out how to be publishers of ebooks, with the result that they don’t know how to market and deliver, other than how they’ve always done it. Just as there will always be snail mail, landlines, and radio, there will always be paper/board/glue/stitching books, but obviously there’s probably going to be enormous growth in cyber books, and instead of simply color illustrations in an anatomy textbook, there should be text, layers of illustration, audio/video, charts and graphs, all as easily accessible as online newspapers and magazines, but even better if they’re still intending to charge an arm and a leg. And textbook editions can be updated in real time, rather than when they think they’ve saturated a market with used copies. That does mean lowering the price, or keeping it constant, but making it available the way my old textbooks are still on my shelf with my notes in them.

    I don’t hope that Amazon determines the market for the same reason that keeping any market in the hands of a single player stifles innovation and competition. I hope Jobs lines up publishers who take advantage of the color and speed of the iPad (I’m not getting one), and people should pay more for that and whatever other value they can add to the new format. Book design is a beautiful art, and like a lot of arts, it can be enhanced in new ways through digitizing its production.

  6. Ben says

    @Paul

    Although publishers do lose control over the price once a book goes to a retailer, an emerging trend (especially since Walmart) has been for large, powerful retailers to force publishers (or manufacturers) to sell at prices below their ideal MSRP. When a retailer has command of such a large share of the market, it can refuse self space to publishers who refuse to meet its price point–after all, where else is the publisher going to sell wares?

    Of course, I don’t know what amazon is doing in this case, whether it’s browbeating publishers or cutting into its own margins (most likely a combination of both), but it seems publishers feel threatened by amazon. Of course, publishers aren’t being very smart about ebooks, and amazon is waking them up. That’s good, but there’s no reason to become fixated on $10 a book. Ebooks should probably be priced about the same as a paperback, some higher or lower than other ebooks.

  7. Syn says

    Jobs also said e-readers weren’t a big deal because people read on average one book a year. Kindle actually changed that for a lot of people. So now your once a year book buyers are buying several books a month. Even if they don’t read them right away, they are conveniently tucked away on their Kindles.

    No if someone who normally buys one book a month is now buying 50 books a year, it seems that publishers would make more money because now more people are buying.

    Another thing is price. If a normal book is 12 bucks and Kindle sells it for 5, they to will encourage people to buy more. If your read 4 books a month at 15 bucks a pop that is quite expensive for a number of people. That’s reaching what some people pay for cable. However Kindle sells those same books for 8, now the price is more reasonable and more people will buy. What would you rather have 500 buy or just 50 because the price is to high?

    Publishers need to get with the program. Electronic is the way to go. Netflix knows this while fighting the studios over streaming rights.

    As for the iPad. I wouldn’t go ticking off Amazon just yet. A single iPad hasn’t been sold yet. And Amazon sells not just the ebooks but the physical books as well. And then you have all the people who feel like Amazon is fighting for them and siding with Amazon over the issue.

    I do however feel that a ebook should be priced a lot less then a physical book. I can’t resell a ebook, I can’t trade it in (at least not yet) for more books. ITs basically a file that doesn’t cost them anything. There is no paper cost, no ink cost, no color cover cost.

    Those are just my thoughts on it anyway.

  8. chris hickie says

    At least used book stores still sell plain old books.

    I just wish someone could break the price lock on college text books that publishers have (try like $600 a semester if you have a kid in college and then the books at most resell for 1/5 that at the end of the semester, largely because the publisher comes out with a “new” edition for the next year and also stop printing the old edition).

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