“Amazon.com Inc., the world’s largest Internet retailer, will have to raise prices of more digital books as publishers seek to match an agreement forged with Macmillan, according to the Authors Guild,” Joseph Galante reports for Bloomberg. “After saying that Macmillan could charge higher prices for Kindle versions of its electronic books, Amazon.com set the stage for the other five biggest publishers to negotiate new terms, said Paul Aiken, executive director of the guild.”
“Amazon.com, which offers best-selling e-books for $9.99, said this week that Macmillan could sell its titles for as much as $14.99. Amazon.com has sought to keep prices of digital books low to maintain the popularity of the Kindle,” Galante reports. “The concession shows a ‘chink in Amazon’s armor’ and may make the Kindle more vulnerable to competitors, according to Collins Stewart LLC. Amazon.com shares dropped 5.2 percent yesterday. ‘There are at least five other publishers who can get this deal from Amazon,’ said Aiken, whose New York-based group advocates on behalf of writers. ‘The other publishers are going to follow suit. It would be irresponsible for them not to.’”
“The Macmillan deal followed Apple Inc.’s introduction of the iPad last week, which gave publishers a new outlet for e- books. Apple is opening its own digital bookstore, using a similar model as its iPhone App Store. The company will let publishers set the price of titles and give them 70 percent of the revenue, according to people familiar with the agreement,” Galante reports. “That’s more attractive to publishers… Amazon.com currently buys digital books from publishers for $12 to $13, Aiken said. Since its price for best-sellers is $9.99, Amazon.com is taking a loss on those titles. That’s left publishers waiting for the retailer to demand lower wholesale prices, he said. ‘Nobody expects Amazon to keep losing money on e-books forever,’ Aiken said.”
“Under the new terms, Macmillan would be able to set the prices of electronic books individually, with most new titles costing $12.99 to $14.99. Retailers would get a 30 percent commission under the proposal, Macmillan said. A deal hasn’t been formally announced,” Galante reports. “The terms would resemble an agreement Apple worked out with publishers. On the iPad, publishers will be able to set a range of prices on e-books, with most best-sellers going for about $12.99, according to the people familiar with the matter, who declined to be identified because the talks are private. ‘We haven’t announced iBook pricing and will provide more details as we get closer to iPad availability in late March,’ said Colin Smith, a spokesman for Cupertino, California-based Apple.”
Full article here.
[Thanks to MacDailyNews Reader "Fred Mertz" for the heads up.]
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