“Who will win and who will lose?” is the question that stalks every battle. You may be surprised at who the loser is in the battle that has been raging between Amazon.com and Macmillan publishing company this past week.
For some time, publishers have been concerned over Amazon’s pricing for Kindle ebooks. Amazon has set the price for Kindle ebooks at $9.99 and recently has been pre-selling upcoming releases from large publishers for $7.99.
Publishers are concerned that pricing ebooks at these low prices will create a demand in consumers for low-priced ebooks, and as ebook sales grow, publishers will ultimately lose out and not remain profitable. As a result, many large publishers have decided to delay the release of ebook versions for their hardcover titles by three months, giving a chance for the higher priced hardcovers to sell.
Macmillan decided they did not want to capitulate to Amazon’s practice of price-setting for Kindle ebooks. They wanted to retain control of the price structure for their ebooks.
Macmillan met with Amazon and gave them a proposal for new terms of sale for their ebooks under a new model to become effective in early March. In the new model, Macmillan will set the price for each ebook individually. The plan is that Macmillan’s ebooks, released concurrent with hardcover releases, will be priced between $14.99 and $12.99.
Amazon did not want to accept Macmillan’s proposal. Instead, they tried to bully Macmillan into capitulating to the $9.99 price. When Macmillan refused, Amazon responded by ceasing to sell all titles by Macmillan both in print and ebook format. Kindle owners report that Amazon went as far as deleting all Macmillan sample chapters stored on their personal Kindles.
Who’s the bully? Amazon!
I believe that Amazon is desperately trying to keep the Kindle the front runner in e-readers. The Kindle currently represents an estimated 75 percent of the e-reader market (not counting smartphones and computers – just other hand-held e-readers). Amazon means to keep it on top.
How? By offering cheap ebooks. If I purchase a Kindle and can get ebooks from Amazon for $9.99, then why should I buy a Nook and have to pay $11.99 or more for the same title at Barnes and Noble?
Amazon does not care if they aren’t making money off of the sale of Kindle ebooks. Their cash cow is the Kindle itself. The profit they make from the sale of the Kindle is their motivation, not the sale of ebooks.
So who is the real loser in this battle? Anyone who owns a Kindle; the very people Amazon is supposed to be servicing.
Ultimately Amazon recognizes this, which is why it has said that “ultimately” it must capitulate “because Macmillan has a monopoly over their own titles,” forcing Amazon to sell its titles “even at prices it believe are needlessly high for e-books.”
In the meantime, I feel for all the Kindle owners caught between two battling forces when all they want is to be able to read the latest book from Macmillan and not have Amazon mess with the content on their Kindles.