Amazon says 'will have to capitulate and accept Macmillan's terms'

[anurag]

From http://www.amazon.com/tag/kindle/for...ype=tagsDetail

Dear Customers:

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!

Thank you for being a customer.

[Bremen Cole]

Hate to see them cave, but I can understand why. I think it is unrealistic to thing the other publishers will not try the same thing. We shall see.......

[guyanonymous]

meow.

[Pardoz]

Not a huge surprise - Amazon made their point, now we consumers get to make ours.

[lilac_jive]

Wow, great letter. Amazon's all but saying boycott MacMillan.

[phenomshel]

Originally Posted by Bremen Cole

Hate to see them cave, but I can understand why. I think it is unrealistic to thing the other publishers will not try the same thing. We shall see.......

I agree. I'm torn, here. Being able to get the books in ebook format in the first place is one hurdle. Being able to get them cheap - I don't expect the moon.

Now that MacMillan has "won"; the othe publishers will be right behind them, I'm afraid.

[Pardoz]

Originally Posted by lilac_jive

Amazon's all but saying boycott MacMillan.

I would, but Macmillan would have to publish e-books I want to buy first. (They have plenty of books, I'd love to buy, from authors I like, just not as e-books.)

[GBerlin]

I'll be voting with my pocketbook. In cases where Macmillan operates as it has in the past, keeping e-books higher than PB, I will either buy a PB or stop buying that author. I will not buy new releases over 10$, because at that point I would wait for the PB release, except for the 7-10 authors I would buy in HC. And since I don't get a HC with an e-book, it's not worth it to me.

[starrigger]

Originally Posted by lilac_jive

Amazon's all but saying boycott MacMillan.

Naw, they're not. They're saying, don't pay more than you want to for an ebook. Very different.

Interesting that they didn't mention, they had the option of continuing on the same basis, but with delayed publication. (With MacMillan, that hardly even matters, since they're so slow in getting the ebooks out anyway.)

I will be curious to see what other publishers do.

[stustaff]

Hmm find this really interesting, on the one hand

I want a strong book industry with authors being well rewarded and thus encouraged(and I feel tehy deserve to make as good a living as a tv writer or movie star)
Not sure what role the publisher will eventually fill especially in the ebook market as it seems Author-Editor-Agent-Retailer cover all thats needed.

However I am happy to pay $15 for a book I like when its new! However it must then drop in price, for example I would only buy my favourite books at $15 maybe 10 a year, the rest I would not pay over $10 and am happy that to do that I have to say wait 3 months after initial release window.

[MikeRo]

Well, thanks Mr. Jobs.

From http://radar.oreilly.com/2010/01/ipa...ublishers.html:

The Wall Street Journal says Apple is pushing book publishers to set two ebook price points, $12.99 and $14.99, with Apple taking its customary 30 percent cut from any sales. They key word in all this is "set." The big kahuna of ebooks, Amazon, controls its pricing. Most bestsellers are parked at $9.99, which is below what Amazon pays a publisher for a title. Amazon is subsidizing its low price point.

In addition:

Update 1/31: Macmillan fired the first shot across Amazon's bow, which led to Amazon pulling Macmillan titles. Amazon has since backed down and reluctantly agreed to Macmillan's terms. The Wall Street Journal puts the disagreement in context:

It is expected that publishers will now seek to do business with Amazon and other e-book retailers on the same terms as with Apple. By setting their own prices, publishers would be able to eliminate discounting on Amazon and elsewhere that they believe threatens the long-term business model of publishing.

What's really interesting about this -- and kind of bizarre -- is that the binary Apple-or-Amazon thinking obscures an important point: mobile devices already offer publishers plenty of pricing options.

[JoeD]

Originally Posted by lilac_jive

Wow, great letter. Amazon's all but saying boycott MacMillan.

To be fair, they don't really need to say it. If prices go up, I will stop buying the ebooks with those prices. I'll pay up to $5-6 for a book currently that I fancy reading and at most $9.99 if it's an author I know and love to read.
If all the publishers follow suit, then that'll put an end to my days reading best sellers.

I hope more authors start to sell directly from their websites at reasonable prices and through non exclusive deals with as many online retailers as they can get their hands on. Those are the authors who will be getting my money in the future if ebook pricing isn't sorted out (in fact they're the authors getting my money right now, as most existing ebook prices are outside what I'm willing to pay).

[wallcraft]

This is great news for the independent ebook stores, such as Books on Board, because now every single US ebook store will be selling ebooks at exactly the same price. So there are only two discriminators: a) customer service, and b) device lock-in. Devices with wireless access to a home store have some lock-in, but only Amazon with its AZW format has a solid near monopoly on its Kindle owners for ebooks. There may be lost Kindle device purchases because it no longer has lower ebook prices than its competitors, but the Kindle momentum is strong and the Kindle store still have the most extensive catalog.

The biggest looser is B&N, because they can't provide discounts to keep Nook owners loyal (and get more Nook purchases) and they generally have bad customer service. Fictionwise (owned by B&N) has loyal customers, but they won't be able to discount ebooks from major publishers any more.

[bwaldron]

Originally Posted by starrigger

Naw, they're not. They're saying, don't pay more than you want to for an ebook. Very different.

Not different to me. I will not be buying from MacMillan any longer.

[jasonkchapman]

Originally Posted by wallcraft

Fictionwise (owned by B&N) has loyal customers, but they won't be able to discount ebooks from major publishers any more.

I could be wrong, but I'm pretty sure FW already operates on an agency basis. Also, I'm not sure a change from a distributor/retailer model to an agency model will impact the function of "buyer's club" programs, which is the source of FW's best discounts. B&N, though they're not using it for e-books yet, has a substantial buyers club program in place already. My guess is that, if they're pushed to an agency model (assuming they aren't already operating that way), they will accelerate incorporating buyers club discounts on e-books.