Saturday, January 30, 2010

Amazon and Macmillan Disagree over Pricing

If you go to Amazon currently and search on a title from Macmillan or any of its subsidiaries, you won't find them listed as available from Amazon. They are available from Amazon retailers, but not Amazon itself. Why, you ask? That's a good question and one that bears explaining.

As the e-book reader market continues to change and evolve, we're going to see more and more struggles between the publishers and the distributors. This most recent event is because Macmillan wanted to charge more for their books. Amazon sells most of their Kindle titles for $9.99 and really wants to keep the majority of the titles at that price point to remain competitive. The last few months have seen a new Sony device, the Barnes & Noble Nook, and this week the iPad. The last thing Amazon wants is a plethora of new devices capable of selling and delivering books at a lower price.

Due to the disagreement with Macmillan, Amazon removed all Macmillan (and its subsidiaries) titles from Amazon directly. Macmillan wanted to have their titles priced from $12.99 to $14.99.

I'm not well versed enough in the economics of publishing to be able to offer an opinion on who is right and who is wrong here, however I do know that the real loser in this disagreement is the consumer who wants to purchase a either a hard copy or Kindle version of one of those books.

How will this shake out? At this point it's hard to say. It took the music industry a fair amount of time (years) to figure out the proper sales model and even the current successful model is under debate.

As a Kindle owner and technology lover, I hope they get this situation resolved quickly. It's never good when a game changing technology takes a back seat to corporate politics. I'm betting this gets worked out sooner as opposed to later though as the publishing business has been suffering and there is a great revenue stream available here.

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