And now, breaking news from Amazon. As reported by Publishers Lunch, earlier this evening, January 31, 2010, the Amazon Kindle team posted the following to a forum on their site:
Dear Customers:
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!
Okay. Let’s take a look at this.
“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.”
This isn’t the whole story, though. As Macmillan’s CEO said yesterday in his open letter:
“Under the agency model, [Macmillan] 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. [Macmillan's] 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.
“The agency model would allow Amazon to make more money selling our books, not less. We would make less money in our dealings with Amazon under the new model. Our disagreement is not about short-term profitability but rather about the long-term viability and stability of the digital book market.”
So yes, under the new model, Macmillan would charge between $12.99 and $14.99 when a new book first comes out. And over time, Macmillan would lower the price. This is dynamic pricing, and it’s something consumers are used to in retail, if not in publishing. For more on the pricing involved, please see Tobias Buckell’s terrific post.
Back to the Amazon response:
“We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles.”
Yes, this was expressed much in the same way as a toddler pitching a fit: making a big deal of noise and clamoring for attention.
“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.”
Um…of COURSE Macmillan has a monopoly over its own titles. They are Macmillan books. Um. Duh.
Tobias Buckell tweeted the following:
I love this AMZN quote: http://tr.im/Mjvr “Macmillan has a monopoly on their titles.”
I sense a whole new funny word meme on obvious/clumsy ways to use monopoly. “Tobias Buckell has a monopoly on the name Tobias Buckell”
Orange trees have a monopoly on their oranges
Lights have a monopoly on their light
Lakes have a monopoly on their water.
THE WORD ‘WAS’ HAS A MONOPOLY ON BEING!
Dudes, Amazon TOTALLY HAS A MONOPOLY ON KINDLES. This needs brought to their attention right away!
Okay, I really can’t do this any better. Bravo, Toby!
Back to Amazon…
“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.”
Sorry, I’m still busting a gut over Macmillan having a monopoly over its own titles.
“Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!”
And…as Toby mentioned, Amazon has a monopoly on Kindles! And here’s one possible response to that.
As of right now (8:26 pm Eastern), Amazon has not yet put back the buy buttons on Macmillan titles, but I’m sure it’s coming.
So it looks like Amazon lost this round. And we didn’t get a chance to see how the other publishers would respond. Damn it, just as I got my popcorn ready…
Well, I’m sure this isn’t the last of the e-book pricing battle…or the e-book/publishing dilemma. Interesting times are ahead.
What would you like to see happen?
Tags: Amazon, Amazonfail, Macmillan, Tobias Buckell
