With Apple's new iPad acting as a big rock thrown into the e-book pond, Kindle maker Amazon.com has given in to the pricing demands of publisher Macmillan. The move could mean fewer under-$10 prices for new e-books.
Amazon, whose Kindle is currently the front-running e-book reader and which offers a large inventory of e-books, had been resisting Macmillan's requirement of a pricing hike. New e-books on Amazon have been priced at $9.99, but Apple is reportedly offering higher prices to publishers for iPad content.
'We Will Have To Capitulate'
Prices for Macmillan's e-book versions of best sellers and most hard covers will be $12.99 to $14.99.
"We have expressed our strong disappointment and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles," Amazon had said in a post on its Kindle forum last week. Macmillan titles remained listed, but could only be bought through third-party marketplace sellers. But, the bookseller noted, "we will have to capitulate and accept Macmillan's terms" because the publisher controls its titles.
Amazon said its customers will need to "decide for themselves" whether to pay prices that it described as "needlessly high for e-books." The bookseller said it doesn't expect that "all major publishers will take the same route as Macmillan," and "many independent presses and self-published authors" will price themselves lower to provide a competitive alternative.
The pricing showdown is only the latest battle is the rapidly changing environment for electronic books. Major publishers are concerned that low prices for e-book versions of titles currently in hard cover could drive down the perceived value of physical books, in the way that digital downloads of songs affected the CD industry.
iPad Changed Amazon's Leverage
Publishing executives and some agents and authors are praising Macmillan's stand and criticizing Amazon's attempt to establish monopoly control. Amazon is also getting criticism from some customers and authors, who are protesting that Amazon should let e-book buyers decide what is an appropriate price and Macmillan books should not be summarily removed from Kindle wish lists.
Ross Rubin, director of industry analysis for consumer technology at the NPD Group, said the situation reminded him of Apple removing NBC shows from iTunes in 2007 because the network wanted higher pricing. Eventually the companies agreed on pricing, but Rubin pointed out that Apple was "in a much stronger distribution position" for its content than Amazon is for e-books.
Rubin noted that last week's release of the iPad "certainly changed Amazon's leverage position," since the e-book space is now attracting Apple and other players. He added that it's not clear yet if this presages a general increase in the price of e-books, but noted that the iPad's color LCD screen offers a flexibility for new kinds of e-reader content, such as magazines. The Kindle has a black-and-white display.