The Way of the Word

31. January 2010

Amazon, Macmillan, Apple and Ebook Pricing

Filed under: books,Commentary — jensaltmann @ 13:10
Tags: , , , , , , ,

On Friday, Amazon.com removed all Macmillan books from all imprints from their site. This was, on the surface of it, over the pricing of Macmillan’s ebooks.

Amazon wants to cap the price for ebooks for the Kindle at US-$ 9.99, while Macmillan insisted on determining their own pricing. Macmillan want to set that price at US-$ 15.–. Note that this is for hardcover editions, in an open letter (an advertisement in the print editions) published on Publisher’s Marketplace, John Sargent of Macmillan described it so that they actually want a tiered price structure, where the ebook price is set in relation to the available print edition. That means that if the book comes out in paperback, the price of the digital edition drops accordingly.

Now, I’m all in favor of the publisher setting the wholesale price (they have to recoup the cost of producing the books after all), and the retailer setting the retail price. This smacks of the retailer (Amazon) dictating the wholesale price to the publisher (Macmillan).

The trick question is, why is Amazon so keen on keeping the price of the digital version low? Also, considering how Macmillan books have only been removed from Amazon.com, and not from the other Amazons all over the world, why do they seem to be interested only in the US versions?

I think the answer can be summed up in one word: Kindle.

Disclosure: I don’t own an ebook reader. The existing models didn’t convince me, for several reasons that I don’t want to go into. Plus, especially the Kindle has considerable DRM issues that work as a deal breaker for me.

What you need to consider, in this case, is that a) the Kindle is a US toy. It has only recently become available outside of the US, and if you’re outside of the US and have a Kindle, you still need to license (because Amazon doesn’t sell ebooks for the Kindle, as people who had thought they had bought George Orwell’s 1984 and Animal Farm discovered in mid-2009) the ebooks from Amazon.com.

Enter Apple. And this is where the timing becomes suspicious. You see, one thing that is known is that Macmillan was talking with Apple about their iBooks store. Apple, from what I hear, is far more open to publishers deciding how much they want to charge. Plus, the whole thing just happens to happen in the same week when Apple unveils the ipad. (Which is much closer to my idea of a good ebook reader, but still not quite there. And overpriced. And I suspect there will be DRM issues. But I digress.)

It’s quite obvious that Amazon couldn’t care less about the price of ebooks in an of itself. What’s important to them is to drive up Kindle sales. (How many units have they sold so far, and do hard numbers exist or only hype?) The ipad threatens the Kindle, and the iBooks store threatens their ebook business in a magnitude that other ebook retailers didn’t. Amazon’s objective is to undercut the other (iBooks) ebook retailers, so that people buy (or rather lease) from Amazon instead of any of the others.

From where I sit, this is not really about ebook pricing. This is happening because the iPad has Amazon worried, and Macmillan simply happened to be in the wrong place at the wrong time, so Amazon wants to make an example of them in order to strengthen their position.

Three things in closing.

1: My idea of a fair price for ebooks is: the price of the paperback, minus the cost of manufacturing, storing and distributing physical copies. I would guesstimate that would be something around $5-$6.

2: For ebooks to really take off, DRM will have to go. People who currently don’t care will start to when they need to replace their e-reader and discover that DRM makes it impossible to keep the books.

3: If anyone wants a DRM-free digital copy of Return of the Ravager or Cowboys & Barbarians (as PDF, .DOC, .TXT or .RTF) for €5.00, I’ll be happy to sell it to you. Contact me through my website.

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1 Comment »

  1. […] ========================= We are not claiming to be the original source of this post, some links might be automatically be removed, so see the original story at: apple « WordPress.com Tag Feed […]

    Pingback by Amazon, Macmillan, Apple and Ebook Pricing »Coolweather — 31. January 2010 @ 13:48


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