Like a thrilling page-turner with a much-anticipated sequel on the way, the book is not yet closed on the future of e-book pricing.
Publishers started the new year playing chicken with online retailers, not content to let them determine the value of their content.
The debut of the iPad last month — and the announcement that Apple would sell e-books itself with a pricing model that suited the major publishing houses — sucked all the air out of the room, and gave publishers the leverage they needed to prevail in a high-profile corporate dispute over the prices of best-selling titles.
But as the iPad’s launch nears, and details emerge about the terms between Apple and book publishers, it seems the idea of cheap best-sellers may not yet be out of print. The New York Times reports that there are provisions requiring that popular titles in e-book format be discounted. That means one e-tailer’s dream of best-selling titles priced under $10 may not yet be dead.
Recently Macmillan, one of the biggest publishers of books, pressured Amazon.com to abandon its $9.99 price policy for best-sellers in e-book format in favor of something called the “agency model,” which basically means the content developer sets the price, as with applications for Apple’s devices.
The publisher had their eye on something more like $12.99 to $14.99 — with still higher prices possible.
Amazon, intent on keeping prices down as an advantage against its monochrome Kindle’s more colorful competitors in a growing market field, wanted to stick with $9.99 in an effort to keep its loyal customers, and hopefully attract more of them.
In a dramatic game of brinksmanship, Macmillan’s gamble caused Amazon to remove its authors’ content from its virtual shelves for a period of several weeks. But Amazon was forced to begrudgingly capitulate to Macmillan’s demands, aided in part by the announcement of Apple’s iPad device and a digital bookstore modeled after its popular iTunes online music store. Apple, you see, made nice with publishers and agreed to let them set the prices, settling for a lucrative role as the middleman getting the content to consumers.
But don’t lose any sleep for Apple. Their agreements with publishers should allow the i-tailer to make money on each book sale — unlike Amazon, which was losing money even before it had robust competition in the e-book market. The reason? They’re still up to their ears in printed books, saddling them with overhead that just won’t be a problem for Apple.
