Amazon to Hike Ebook Pricing as iPad Ships

Ed Sutherland ()

Amazon to Hike Ebook Pricing as iPad Ships

At the time, Apple CEO Steve Jobs’ remark about ebook pricing being the same whether sold by Cupertino or Amazon seemed rather optimistic. At the time, Amazon controlled ebook pricing and the ebook market, while Apple had just released the iPad. However, just weeks after the tablet was unveiled, Amazon will now adopt Apple’s price structure when the iPad starts shipping in March.

“By agreeing to accept a new pricing model, Amazon has publicly acknowledged the sudden emergence of a rival that may not only threaten its highly popular Kindle franchise but also its total domination of e-books,” the Wall Street Journal reported this weekend.

Amazon has also finalized new pricing for Macmillan, the first publisher to throw its weight behind Apple and against the giant online book-seller. Hachette Book Group and HarperCollins quickly followed MacMillan’s lead, voicing displeasure with Amazon’s $9.99 pricing and advocating for Apple’s more flexible $12.99 to $14.99 “agency” model.

The deal with Macmillan will “set the stage” for future agreements likely to transform the ebook industry, according to the report. When Amazon first removed the publisher’s books, it said it would “ultimately” have to give in to the company’s demands, perhaps acknowledging changes were likely in the wings. Following the weekend agreement, Macmillan ebooks were back on Amazon’s virtual shelves.

The quickness of changes in the ebook industry has been breath-taking. One day after the iPad was unveiled, Macmillan CEO John Sargent flew to Amazon’s Seattle headquarters to talk “new terms of sales for ebooks.” Days later, Rupert Murdoch’s News Corp., which owns HarperCollins, said Amazon was “ready to sit down” to renegotiate ebook pricing. Friday, Hachette became the latest to join the iPad bandwagon and question Amazon’s dominance.

Random House, the only major publisher that hasn’t pushed for an ebook pricing overhaul is said to be “studying the matter.”

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[Via AppleInsider and Wall Street Journal]

9 comments »

About the author

Ed Sutherland

Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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  • CaryMG

    I’m tired of all of this NONSENSE.

    Do you know how incredibly *difficult* it is to write a good book?
    The time & effort it takes ?
    Then people have the unmitigated GALL to complain: “Oh man — I can’t get Stephen King’s latest for 9 beans !!11!!!1!” ….

    Of course, the *production* expense isn’t there, but whatever that phenomena is when you enjoy a good read *is* there — whether you’re reading ink-on-paper, eInk-on-plastic or charcoal-on-wall: *that’s* what’s being charged $25, or whatever, for.

    And did Kindle owners think that $10 bestsellers were gonna last forever ?!? lol

    Cardinal rule of the dope pusher: the first one’s free …. : get ‘em hooked *then* bring the hammer down.

  • http://ObamaPacman.com ObamaPacman

    Amazon sells e-books below cost. That is predatory pricing, which might be against the law.

    By the way, it’s not Apple who wants to raise prices, it’s the publishers. In addition, not everything is going to be more expensive.

    Apple Expensive e-Book Myth:
    http://obamapacman.com/2010/02/apple-ipad-ibookstore-ebook-prices-high-price-myth/

  • shaunathan

    I have a friend that was just given a 400,000 USD contract for two books. The publisher needs to make that money back somehow :)

  • Montana Bob

    Apple is right to allow the publishers to sell at the price they choose. After all, if the price is too high, the market will adjust itself. If the price is too high, sales of overpriced e-books will falter, and the publisher will be forced to reduce it. Exactly like what happens at the Bargain Bin Discounts at any Barnes & Nobles store.

    Apple would be right to allow ALL publishers to sell at the price they desire. This will be a boon for SMALL independent publishers, or even Authors who are self-publishing. If a talented writer wanted to publish herself on Apple’s eBook Store, why should anyone tell her that she must sell her book for $9? That is the inherent stupidity and short-sightedness of the Amazon greed model. The Amazon greed model wanted to boost their Kindle sales by offering customers the drop-dead cheap-ass prices, but this in turn destroys the livelihood of the authors and writers, and it stifles their work, stifles their creativity, stifles their incentive to want to produce/sell good quality material.

    Apple’s proposed model might look like it “raised prices” for the average customer, but what Apple is doing is the right thing because it allows the industry to stay alive, stay creative, and to be self-sustaining.

  • Don Pope

    Sorry, but paperbacks have the exact same content for $7.
    There is absolutely zero justification for charging more for an e-book than a paperback.

  • japanguy

    in old days, father carry the text-books for mother. and then she fell in loves with him, for he was gentleman. so they get marriaged

    in future days, i carry ipad for the girl in my class. she will be impress

    - hello! from tokyo!

  • FineTunes

    “Sorry, but paperbacks have the exact same content for $7.
    There is absolutely zero justification for charging more for an e-book than a paperback.”
    Don Pope, on February 8th, 2010 at 3:13 pm

    Usually the first printing is a hardback edition and it is normally higher priced. The paperback edition comes out months later after the hardback edition has ran its course. If you ever visited the Kindle store before and even now you will see that there are book prices that vary from free, $0.99 to $6,000+ (believe me I saw this–but it was a technical book series).

  • Jerry

    Want an Apple Ipad but don’t want to pay for it ? Go to http://GetYourIpad.info

  • mrplow

    CaryMG,

    I agree with you on one point. It’s not easy to write a good story. Some find it easier than others but it’s still a tricky business to write something the masses will be enthralled with.

    But…. just to get this straight….
    - you think people should pay more for something that costs less to produce?
    - you think that drug dealers have a good business model that publishing should use?

    The music industry made this mistake with MP3, and it’s set to repeat itself with publishing. They tried to charge more for electronically stored music than a physical disc that needed producing, packaging, shipping and retailing.

    The buying public, having read and understood the Emperors New Clothes, didn’t see why they had to pay more for less.

    MP3′s went underground, piracy was rife. The industry lost money and stature.
    It’s only with the fairly recent surge of online stores that people are slowly returning to the idea of paying for music. Only now do people feel like the value is returning to music purchases.

    I don’t advocate piracy one bit but this WILL happen to e-books if the industry doesn’t make a big effort to give the buying public perceived value.

    Hiking prices in response to the increasing interest in e-readers is not the way to go. It’s seen as cashing in. People are losing the tactile look and feel of a book. They need to feel that loss is replaced by the convenience and value of an electronic book.