updated 10:45 pm EST, Sun January 31, 2010
Amazon claims Macmillan wants unfair price hike
Amazon in an unusual weekend update revealed that it has accepted Macmillian's pricing terms for e-books on the Kindle store. The online retailer said it would involuntarily agree to Macmillan's price increase requests and accept the publisher's agency model, which will raise the prices of popular titles from Amazon's previously insisted-upon $10 to a typical $13 or $15. Amazon in its defense argued that it was strongarmed by its dependence on publishers and made the unusual claim that Macmillan had a "monopoly" on its own books, letting it dictate the terms of how they're sold.
"We will want to offer [Macmillan books] to you even at prices we believe are needlessly high for e-books," the bookseller wrote. "Amazon customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book."
In an attempt to prevent other publishers from following in Macmillan's path, the Kindle maker asserted that it doesn't expect other publishers to follow suit and that independents can use the $10 price point as an option.
Although unstated by Amazon, the move is likely to be at least partially spurred on by the entrance of Apple into the e-book store field and the launch of the iPad. Apple is increasingly thought to have accepted higher prices in advance for all publishers as a means of luring them towards its shop. Amazon has had to sell many e-books at a loss to itself to maintain its seemingly low prices, and its business model until recently took between 50 and 70 percent of the revenue of a book versus the rumored 30 percent at Apple's store.
Macmillan and possibly others have decried Amazon's model as unsustainable in the long term.