There was some drama over the past few days between Amazon and Macmillan Publishers (see photo illustration above), perhaps spurred on by the whole Apple iPad announcement, concerning the pricing of Macmillan ebooks on the Amazon Kindle store. It all came to a close on Sunday evening, when Amazon announced that from now on it will let Macmillan set the price of new releases and bestsellers in the $13-15 range.
Amazon posted a strongly worded announcement on its own forums to let customers know what went down, and to make it clear that it disagrees:
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!.
I don’t know that anyone is surprised that a publisher wants to have the final say over the price of the books it sells. And to be honest, I don’t think $12 or $15 is a bad price for a new book, provided that the ebook version is released at the same time as the hardcover. If Macmillan delays release dates and tries to charge a premium, *shrug*, I can just go buy something else.
But–and I write this as someone who thinks the Kindle is awesome in a lot of ways–Amazon needs to drop the sanctimonious act. From the beginning of the Kindle, the company has strong-armed publishers on prices and profit agreements, and it’s screwed over readers like you and me by telling us that we’re “buying” ebooks when in reality we’re just licensing them. (Check the fine print of the agreement–you’ll see that you never actually own your digital copy of the book you “buy” on Amazon.)
I can put it even more plainly. Amazon calls its Kindle endeavor a “mission,” but it uses a locked-down format that prevents customers from buying ebooks from other stores, or from reading Amazon ebooks on other devices. The whole ecosystem, while fairly pleasant for consumers to participate in provided nothing ever goes wrong, is deliberately designed to give all the power to Amazon and keep publishers, authors, and customers powerless. And when Macmillan put up a fight, Amazon pulled all Macmillan titles, digital and print, off its website as a negative incentive to get Macmillan to cave. That’s the sort of dirty trick you pull when you’re a business, not when you’re on some sort of higher mission.
Okay, end of rant! My point is, this is bad news mainly for Amazon, because higher prices tarnish its expensive marketing campaign that promises $10 books, and because this means it might lose a competitive edge when it comes to pricing for Macmillan books in the future. In other words, from now on you’ll probably pay the same price for a Macmillan book whether it’s from Amazon, Barnes & Noble, or Apple.
But this isn’t the end of the world for customers. $15 for a new release is still a good price. And as Amazon points out, there are dozens–no, probably hundreds–of independent publishers and authors out there who would love to sell you an entertaining novel for $10 or less. (Edit: or you can just wait a few months for the ebook price to drop.) You shouldn’t worry too much about what two giants are fighting over when there’s so much great stuff waiting for you everywhere else.
(Photo: mikebaird)
“The Burnt House” by Faye Kellerman
“Bake Sale Murder” by Leslie Meier
“Black Widow” by Cliff Ryder
“Billy Boyle” by James R. Benn
“Kill the Story” by John Luciew
“Long Lost” by Daivd Morrell
“Wasted” by Mark Johnson
I respectfully disagree about the licensing argument. I have been a lawyer for 25 years, so I realize that the kindle contract permits Amazon to effectively rescind ebooks from purchasers. However, there are good and appropriate reasons for this to be in a contract, even though the likelihood of it actually happening are extremely remote. I am grateful to Amazon for strong-arming publishers, and I had hoped it would stick to its guns in this dispute. It is in fact the only way that prices will stay down. We may say that we will read indie authors or whatever who charge less than major publishers, but that won’t work when the Next Big Title comes out — we will all want to have it. I believe that Amazon ah done its homework and sees the $9.99 price point as reasonable for all sides; there are a number of other authorities that think $4.99 is more like it. It seems quite obvious to me, based on Steve Jobs off the cuff remark to the WSJ about ibooks is that there is a little price-fixing going on, and a conspiracy to make it happen. Let’s get the real story as to why Jobs says all ebooks will be priced the same $12.99-14.99 — perhaps because he agreed to it in order to kill the kindle?
I don’t think there is any question that price fixing in happening. It also reminds me a bit of the old 1980′s tactic to get customers to get used to ATM banking. They argued it was for our convenience and we’d all love it and it would be FREE– yet once offered and we were all hooked they began to charge for it.
We should all have known $9.99 was too good to be true. I can’t help my cynicism. I won’t pay more than $9.99 for anything on my kindle. I can find it cheaper in hardback used if I have to or, God forbid, I can get it at the library!