“Apple’s new multimedia tablet device, with a 10-inch touch screen that is expected to deliver video, text, navigation and social-networking applications, could change the way much of traditional media is delivered,” Trachtenberg reports. “For the book industry, the Apple tablet is bringing to a head a brewing battle between Apple and industry heavyweight Amazon.com Inc. over how e-books—seen as the future of the book industry—will be priced and distributed.”
Trachtenberg reports, “Apple’s business model for books, which the company has kept under tight wraps, shifts the focus away from the bargain-basement prices Amazon has made popular, according to publishers that have met directly with the company. Apple is asking publishers to set two e-book price points for hardcover best sellers: $12.99 and $14.99, with fewer titles offered at $9.99. In setting their own e-book prices, publishers would avoid the threat of heavy discounting. Apple would take a 30% cut of the book price, with publishers receiving the remaining 70%. Apple’s vision is at odds with Amazon.com, which has shaken the book industry by slashing prices of e-books on its Kindle reader and making the $9.99 e-book best seller an industry fixture.”
“Amazon typically pays publishers about half of the cover price of a new hardcover book for e-book best sellers,” Trachtenberg reports. “For example, Sarah Palin’s recent memoir, ‘Going Rogue,’ has a hardcover price of $28.99, which means the publisher likely received about $14.50 for the e-book edition. Since Amazon today sells that e-book for $9.99, the bookseller is losing about $4.50 on each sale—a hit it has been willing to take to build a dominant market share in e-books and power sales of its Kindle reading device.”
Read more in the full article here.
[Thanks to MacDailyNews Readers “Lynn W.” and “Citymark” for the heads up.]