It would seem that in the world of e-books, it’s all fair in love, war and books when it comes to Amazon. Just when we thought Amazon was about to wage war on Apple over the announcement of the iPad a few days ago, instead it would appear that Amazon have ruffled a few feathers with Macmillan, the publishing company.
In a rather unusual turn of events, Publisher Macmillan took out an ad in the Publishers Marketplace magazine protesting the tactics being used by Amazon regarding pricing. The issue is that Macmillan is trying to raise prices to $15.00 and up and Amazon is trying to keep the prices at $9.99 and up per title.
Although negotiations have been going on for a year, you would have thought that both companies would have reached a compromise, especially as it is both equally in their interests, however Amazon came out as the bad guy when they pretty much banned titles published by Macmillan by refusing to directly sell them, however what did Macmillan do? They decided to make this war public when they paid for an ad in the industry paper, Publishers Lunch:
“Under the agency model, we will sell the digital editions of our books to consumers through our retailers. Our retailers will act as our agents and will take a 30% commission (the standard split today for many digital media businesses). The price will be set the price for each book individually. Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99. At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99. E books will almost always appear day on date with the physical edition. Pricing will be dynamic over time.”
However, with a dramatic turn of events, the ban which was put in place on Friday didn’t last the weekend. Late yesterday, Amazon gave in and agreed to sell Macmillan e-books at the higher price, however Amazon are not happy about this decision. Amazon Kindle’s team posted a message yesterday that stated in part:
“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.”
So do we think Amazon made the right move to disable this ban? Although it is always good for Amazon to build good working relationships with their publishers, a comprised pricing structure should have still been met. Like what happened with Apple and the music industry, publishers may need to move with the times and understand that they may have to in the future lower their pricing structure to meet the demands of consumers who are now living in a more price concious market place.
What do you think? Should Amazon have stuck to their ban or did they make the right decision to disable it? Leave a comment and let us know what you think?