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From: Sam Citron1/31/2010 11:38:59 AM
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Amazon Removes Macmillan Books [NYT]
By BRAD STONE and MOTOKO RICH
nytimes.com

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.

Macmillan’s imprints include Farrar, Straus & Giroux, St. Martins Press and Henry Holt. Popular books, including “A Long Way Gone” by Ishmael Beah, “Wolf Hall” by Hilary Mantel, “Middlesex” by Jeffrey Eugenides and “Finger Lickin’ Fifteen” by Janet Evanovich, could be purchased only from third-party sellers on Friday night.

Apple will allow publishers more leeway to set their own prices for e-books. Although the prices will be tethered to print book prices by a formula that will generally yield prices between $12.99 and $14.99 for most fiction and general nonfiction, that is significantly higher than $9.99 discount that Amazon offers on its Kindle.

Publishers have been concerned that such pricing devalues books. Tensions between publishers and Amazon have been rising as publishers have withheld select e-book editions for several months after the release of hardcover versions of books.

It is not clear yet if publishers can withhold books from Amazon while giving them to other parties like Apple. Antitrust lawyers said it could raise legal issues.

Macmillan and its imprints have not yet returned requests for comment. Amazon refused comment.

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To: Sam Citron who wrote (160599)1/31/2010 9:27:29 PM
From: i-node
   of 161680
 
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.

I'm not sure, but I think these publishers are underestimating what they're up against.

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To: i-node who wrote (160600)1/31/2010 9:59:20 PM
From: Sr K
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Some publishers don't "like" amazon.com selling books at a loss when they get what they have agreed to which is more than the $9.99 amazon.com sells best sellers for. They are arguing now that they want to get less, that the consumer should pay something like $12.99 or $14.99 with 30% going to Apple.

It makes no sense financially that I see. They want to get less as long as the consumer doesn't get used to paying just $9.99.

And I haven't heard that Apple will store in the cloud all the e-books you've bought, so you can reload them anytime at no charge.

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To: i-node who wrote (160600)1/31/2010 10:17:11 PM
From: Glenn Petersen
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Amazon caves:

At Amazon, Giving In to Demands

By MOTOKO RICH and BRAD STONE
New York Times
February 1, 2010

After a weekend of brinksmanship, Amazon.com on Sunday surrendered to a publisher and agreed to raise prices on some electronic books.

Amazon shocked the publishing world late last week by removing direct access to the Kindle editions as well as printed books from Macmillan, one of the country’s six largest publishers, which had said it planned to begin setting higher consumer prices for e-books. Until now, Amazon has set e-book prices itself, with $9.99 as the default for new releases and best sellers.

But in a statement Sunday afternoon, Amazon said it would accept Macmillan’s decision.

On Friday, Amazon removed “buy” buttons from thousands of titles published by Macmillan, including recent best sellers like “Wolf Hall” by Hilary Mantel and “The Gathering Storm,” by Robert Jordan and Brad Sanderson. Customers who wanted to buy print editions could do so only from third-party sellers. Digital editions made for Amazon’s Kindle device disappeared.

In a strongly worded message on its Web site on Sunday, Amazon said that while it disagreed with Macmillan’s stance, it would bow to the publisher’s plan.

“We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles,” Amazon said. “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 face-off had set the already anxious publishing industry on edge. “I think everyone thought they were witnessing a knife fight,” said Sloan Harris, co-director of the literary department at International Creative Management. “And it looks like we’ve gone to the nukes.”

As of Sunday evening, the “buy” buttons had not yet been restored to Macmillan titles on Amazon. In a statement to Publishers Marketplace, an online industry newsletter, John Sargent, chief executive of Macmillan, said: “We are in discussions with Amazon on how best to resolve our differences. They are now, have been, and I suspect always will be one of our most valued customers.”

Under Macmillan’s new terms, which take effect at the beginning of March, the publisher will set the consumer price of each book and the online retailer will serve as an agent and take a 30 percent commission. E-book editions of most newly released adult general fiction and nonfiction will cost $12.99 to $14.99.

Those terms mirror conditions that five of the six largest publishers — Hachette Book Group, HarperCollins Publishers, Macmillan, Penguin Group and Simon & Schuster — agreed to with Apple last week for e-books sold via the iBookstore for the iPad.

For more than a year, publishers have been fretting about the price of digital books, which Amazon, as the dominant player in the fast-growing market, had effectively been able to set.

Last Thursday, Mr. Sargent flew to Seattle to explain the pricing and new sales model to Amazon. He said Amazon could continue to buy e-books on the same terms it does now — allowing the retailer to set consumer prices — but that the publisher would delay the release of all digital editions by several months after the hardcover publication.

Amazon buys and resells e-books in the same way it handles printed books, by paying publishers a wholesale price that is generally equivalent to half the list price of a print edition. Because Amazon has discounted the price of most new and popular e-books on its Kindle e-reader to $9.99, it loses money on most of those sales.

Amazon’s goal has been strategic: it aims to establish a low price for e-books that will have the ancillary benefit of helping it sell more Kindle devices.

Amazon’s decision is also a victory for Apple’s chief executive, Steven P. Jobs, who first pitched the idea of selling e-books under the agency model to book publishers earlier this year. Now Apple, whose iPad tablet is due in March, can compete on fairly equal footing with Amazon.

Book publishers, meanwhile, are volunteering to limit their digital profits. In the model that Amazon prefers, publishers typically collect $12.50 to $17.50 for new e-books. Under the new agency model, publishers will typically make $9 to $10.50 on new digital editions.

Apple’s stance in allowing publishers to set their own e-book prices (albeit within a limited range) is also a bit of a reversal. That is precisely the kind of arrangement it declined to offer TV networks and music labels, which have long railed against the 99-cent price of songs in iTunes.

Analysts say Amazon, which accounts for 15 to 20 percent of domestic book sales, probably realized it could not compete with Apple if it wasn’t offering the same range of content. “Amazon figured out pretty quickly that this was a battle they could not win,” said Mike Shatzkin, the chief of the Idea Logical Company, a consultant to publishers.

Amazon may still hope to play one asset to its advantage. Loyal Kindle users routinely give low ratings to books they perceive as too costly, or whose digital editions are delayed past the publication of the hardcover edition. These consumers could ostensibly reject costlier e-books.

Copyright 2010 The New York Times Company

nytimes.com

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To: Sr K who wrote (160601)1/31/2010 10:22:47 PM
From: i-node
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For a couple of books recently, the publisher has withheld Kindle rights until some weeks after the hardback edition was published. Even though AMZN regularly marks those up beyond the usual $10 price.

Kindle users were irate. One of these books, I had planned on buying, but they couldn't pay me to take a copy of it now. I think they misjudge the situation.

People who use ebooks aren't going to go out and buy hardcovers just to read the book now rather than a month from now. I'm reading the first hardcover I've read since I got a Kindle, and that only because I already had it and didn't want to buy the Kindle edition (it is a book I read 15 years ago & am rereading). It is awfully inconvenient once you've been reading ebooks to read a hardcover. IMO, at least.

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To: Glenn Petersen who wrote (160602)1/31/2010 10:36:49 PM
From: i-node
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That's just too bad.

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To: Glenn Petersen who wrote (160602)1/31/2010 11:11:17 PM
From: Sam Citron
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Well, there goes the idea that I might be able to buy a new release from Amazon (at $9.99) via the Kindle app on an iPad. Unlike Bezos, Jobs didn't see any advantage of selling anything at a loss. So now iBooks and Amazon look like they will have nearly equivalent pricing (set by the publishers). Duopoly behavior will probably also maximize profits for all concerned. The iPad seems prettier and for things like textbooks will be a necessity (for color charts), but until the iPad gets highlighting, annotation, and voice synthesis capability, it's a non-starter in the education market.

Bottom line I see Jobs poaching a good deal of Amazon's e-book business.

Sam

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To: Sam Citron who wrote (160605)1/31/2010 11:23:47 PM
From: Sr K
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wsj.com has a story tonight, including

The picture is likely to get more complicated when Google Inc., the search-engine company, later this year launches its own e-bookstore, Google Editions. Google says it intends to allow publishers to set their own prices—while reserving the right to discount at its own expense.

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To: Sr K who wrote (160606)2/1/2010 10:25:35 AM
From: Sam Citron
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Yes, there has been discussion about Google Editions for quite a while. Last August, WSJ quoted a Google spokesperson who said it will “sell online access” to books and that the system “doesn’t provide for download.” blogs.wsj.com

The eBook space is getting very crowded all of a sudden and that usually tends to mean falling prices for consumers, Amazon-Macmillan deal notwithstanding, and a shakeout in the industry.

Sam

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To: Sam Citron who wrote (160605)2/1/2010 11:18:41 AM
From: Stock Puppy
   of 161680
 
Once again, Jobs shakes an industry - amazing guy.

Unlike Bezos, Jobs didn't see any advantage of selling anything at a loss.

This is one thing I can't fathom - what the freak is the overhead on a digital book that $10 will not cover or make up with volume?

There are one time costs but the ongoing costs once recovered shouldn't be much.

I can understand there are costs in formatting the book in digital format, and then whatever advertising, royalties to author and $ to middleman, uploading to server and maintaining it there and Amazon subsidizing the download connect cost and so on - but with the digital book, you're eliminating printing and then the distribution costs must be far far less than print?

Why lose money at the $10 price point? I can't imagine all these costs would be more than a few $ per book?

Are they considering the so called "loss of a purchase of a print edition" when a digital edition is purchased?

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