updated 07:15 pm EST, Sat January 30, 2010
Macmillan says Amazon wants too much control
Macmillan in a special news update backed many of the rumors behind Amazon's decision to pull its Kindle books on Friday. The publisher's John Sargent says that the price requests are part of a new agency model taking effect in March and that this would require charging between $6 and $15 per book, with Amazon taking a 30 percent cut like other retailers. Amazon's insistence on a maximum $10 price would be acceptable only if there were an " extensive and deep windowing" of the books that would be sold.
Moreover, Macmillan would sell the average new title between $13 and $15, and prices would change over time. Unlike some publishers, it would have also put up online copies of books at the same time as their paper versions, promising much more exposure.
The publisher argues that this model would actually make Amazon more money than the latter's new Kindle model, which would only allow Macmillan's 70/30 split for books under $10. Sargent also denies that the price hike would be a short-term profit grab and instead characterizes the move as a gesture towards "long-term sustainability."
While mum on whether Apple has played a part in Amazon's reaction, it comes just as the unveiling of iBooks has arrived and fits Macmillian's agency model. Apple hasn't disclosed the terms of its store's deal, but it's rumored to line up exactly with Macmillan's plans and would include both giving the publisher 70 percent of revenue as well as letting it sell new books at the $13 to $15 price targets. A brief look at the iBookstore during Apple's keynote hinted at these prices.
Amazon is widely regarded as the largest e-book seller to date but has partly accomplished its goal by undercutting the prices of competitors while providing equal or better hardware. The iPad is believed to be one of the first major competing devices outside of the Nook and is potentially attractive to publishers both through its feature set as well as the exposure made possible through already popular Apple's online portal.