Macmillan demands higher prices for ebooks
1st Feb 2010 | 08:49
Amazon Kindle forced to swallow a bitter pill
Major book publisher Macmillan has demanded that its books are sold for more than Amazon's $9.99 special offer to its Kindle customers, forcing Amazon to now charge its customers $12.99 to $15.99 for e-book versions of bestsellers and most hardcover releases.
All of Macmillan's ebooks were removed from the Kindle store late last week, which immediately suggested something was up between the major book publisher and the online retailer.
It quickly emerged via communications from Macmillan that Macmillan is unhappy with Amazon's loss-leading $9.99 pricing for Kindle copies of new books.
Higher pricing for ebooks
From now on, Macmillan wants all e-book sellers to use an "agency model" (ie in which online retailers such as Amazon act as sales agent of Macmillan) and that Macmillan would set each book's sale price individually. Macmillan books would be priced at $14.99 to $15.99, with the odd $12.99 new title.
In a post on the Kindle forum, an official Amazon company statement now reads:
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!
Thank you for being a customer."