Amazon vs. Macmillan

There seems to be a temporary truce in the new war between Amazon.com and book publisher Macmillan over the publisher's demand that Amazon sell Macmillan's bestselling e-books at prices ranging from $12.99 to $14.99 rather than at Amazon's standard price of $9.99 per e-book. It will be interesting to see how other publishers react. Will they join Macmillan by raising their own prices or will they try to grab a bigger piece of the e-book pie by undercutting the new Macmillan pricing scheme?

I do find Amazon's spin amusing. The giant retailer is crying foul and is tremendously upset, it claims, about how this price increase affects its customers.

From the San Francisco Chronicle:

Amazon said it briefly halted sales of e-books from Macmillan for its Kindle e-reader device after learning that Macmillan wanted to charge between US$12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.

[...]

In a pointed notice to customers posted Sunday night, Amazon said it expressed its "strong disagreement" with Macmillan and temporarily cut off the sale of all Macmillan titles.

That decision, however, was soon overturned.

"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," the company said. "Amazon customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book."

Amazon said it doesn't expect any of the other five big publishers to make the same decision. Amazon suggested the price increase will create opportunities for other authors and publishing companies to supply "attractively priced e-books as an alternative."

Not mentioned by Amazon is the impact that higher e-book prices will have on the sale of the Kindle reader itself. Having this happen just when the new Apple iPad is set to enter the market has to have Amazon wondering if its Kindle sales numbers have peaked and its e-book reader market share is about to shrink. Time will tell.