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iPad vs Kindle: MacMillan loses the plot

January 31, 2010 1 Comment

In a move reminding of the precipitate ways of the Music Industry, Macmillan seems to have argued with Amazon over increasing the price of ebooks in the fledgling market. Amazon, rightly moved Macmillan off its shelves, thus causing tremendous losses to MacMillan.

We can tell you as customers that even $9.99 is not going the whole way for market development of the e-books market. Apple’s iPod had revolutionalised the music industry by making songs available for $0.99 ea. However, Apple had avoided the public spat and convinced publishers to go along with it.

The pecuniary advantages of negative reinforcement may well be limited. Apple’s ibookstore is planning to price titles at a steep $12.99 and $14.99. However, amazon’s action may also be compromised if it resricts the ban to only e-books from MacMillan Titles and should go the whole way.

On the flip side, even if MacMillan sells half its inventory thru Amazon, it will lose out on those markets in the next year or so and sales will surely dip by aleast 8-10% from the defranchising. Amazon’s model may not dissuade from bestsellers or any titles already preselected in the customer’s mind but when it comes to browsing and selecting purchases and gifts based on Interests, an immediate negative impact is likely on those not available at the site.

C-NET published this shocking piece of news yesterday

Amazon.com has pulled books from Macmillan, one of the largest publishers in the United States, in a dispute over the pricing on e-books on the site. The publisher’s books can be purchased only from third parties on Amazon.com. A person in the industry with knowledge of the dispute, which has been brewing for a year, said Amazon was expressing its strong disagreement by temporarily removing Macmillan books. The person did not want to be quoted by name because of the sensitivity of the matter. Macmillan, like other publishers, has asked Amazon to raise the price of e-books to around $15 from $9.99. Macmillan is one of the publishers signed on to offer books to Apple, as part of its new iBookstore on the iPad tablet unveiled earlier this week.

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Filed under Digital Media, Marketing Tagged with Amazon, Apple, Books, Digital Media, e-books, e-reader, ebooks, ereader, iPad, Kindle, Macmillan, Media, Publishing, Wireless

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One Response to iPad vs Kindle: MacMillan loses the plot

zyakaira says:

February 1, 2010 at 10:50 am

The publisher gets it

Here’s the Amazon Forums posting from the Kindle marketing team at Amazon, who probably also think it is time to turn out their clothes and show a different trick.

Amazon Forums
Dear Customers:

Macmillan, one of the “big six” publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.

We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books. Amazon customers will at that point decide for themselves whether they believe it’s reasonable to pay $14.99 for a bestselling e-book. We don’t believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative.

Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!

Thank you for being a customer.

And that’s it folks, Amazon’s Kindle is going to be ahead of the iPad book store in carrying $12.99 and $14.99 titles as well. So much for competition. I can smell the government just around the corner, within the year, stepping in to control prices. Who’s to stop the next one from demanding price parity. Then Hank Paulson’s ‘On the Brink’ would retail for $28.95 on the iPad , Kindle and that Nook. What do you think?

Jeez.

NB: The current commission structure has also moved overtly in favor of Publishers from 30-70 to 70-30

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