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Amazon retaliating against Penguin over e-book pricing

updated 12:35 pm EDT, Fri April 30, 2010

Amazon cuts physical book prices to hurt Penguin

Amazon today was reported as having dropped the prices on some of Penguin's physical books to force a deal with the publisher for e-books [subscription required]. Coming weeks after Penguin stopped providing Kindle books on April 1st, Amazon has cut the costs of some brand new hardcover books to the same $10 it would normally charge for a digital edition. The price slash would be especially painful for Penguin as it and other publishers hate major discounts on new titles.

The move is believed to once again have its roots in a dispute over the agency pricing model, which would let Penguin and other publishers set the price and leave Amazon taking a fixed percentage of the revenue. Amazon has normally insisted on a wholesale model where publishers are paid a fixed amount and Amazon sets the price. A refusal to budge triggered similar behavior from Amazon with Macmillan and led to Amazon temporarily pulling that publisher's titles until it was forced to allow higher prices.

The now multiple disputes at Amazon all started roughly on the verge of the launch of the iPad, which may have sparked a conflict in which Apple was willing to allow prices higher than $10 to court publishers frustrated with Amazon's tendency to sell e-books below cost. Amazon had allegedly tried to threaten smaller publishers into maintaining wholesale deals, but it has since signed deals with independents and most majors that permits agency pricing on the majority of its Kindle titles.



By Electronista Staff
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  1. gkroeger

    Fresh-Faced Recruit

    Joined: Oct 2008

    +1

    How would this hurt Penguin

    I doubt Penguin gives Amazon a fixed percentage on hard copies. Amazon has already paid Penguin the wholesale price... if they cut prices won't it just lower Amazon's cut?

  1. Toyin

    Mac Elite

    Joined: Nov 2000

    +1

    That explains it

    I've been waiting for the last book of "The Lost Fleet" to be available on the Kindle. It's available on iBooks and Barnes and Noble digitally. I like the Kindle store better because I can read books in multiple places, but it looks like I may have to use the iBooks store for this one.

    I don't see Penguin losing on this one because I'm going to get the book from another vendor if it's not available after my current book. Looks like Amazon's is loss to me.

  1. facebook_Ashley

    Via Facebook

    Joined: Apr 2010

    +3

    Amazon discounts on Penguin started April 1

    This is a strange story and a boon for readers. Amazon has offered Penguin hardcovers for $9.99 since the beginning of April. For example, John Barnes' techno-political thriller, Directive 51 (Ace - $27 list price) has been sold at discount since its launch. Now #6 on the WSJ SF Bestseller's List, it's a great deal for readers and Amazon is still paying the proper wholesale cost to the Publisher. It's also available on the Kindle and iBookstore if you have an iPad.

  1. facebook_Kevin

    Via Facebook

    Joined: Apr 2010

    +1

    Amazon got me an autograph

    Because of the dispute, I couldn't get the Kindle version of the latest Dresden Files novel, so I wound up buying it from a local Borders bookstore who gave me 40% off the hardcover AND was having a book signing by the author, Jim Butcher. Thanks Amazon!

  1. chas_m

    Moderator

    Joined: Aug 2001

    +1

    And People Whine About Apple

    You want to see a bully in the digital marketspace? Try Amazon on for size.

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