It was a busy weekend in the publishing world after the unveiling of the iPad last week sparked a showdown in the e-book market between Amazon and Macmillan.
In an effort to pre-empt Apple’s challenge to their share of the e-book market, Amazon reduced their e-book publishing cut from 70% to 30% one week prior to the iPad announcement. However, in order to get the higher royalty option, authors must acknowledge Amazon as a publisher, grant licensing rights to the company for the Kindle publishing platform, and let them set the e-book price — no higher than $9.99.
Macmillan, one of five publishers who has partnered with Apple, met with Amazon on Thursday to request the price of e-books be raised from $9.99 to about $15 to prevent book devaluation. Amazon response? To remove all books published by Macmillan — e-books, hardcovers, and paperbacks — from its site on Friday, excepting those available from third party sellers.
In a statement to its authors, illustrators, and agents, Macmillan CEO John Sargent said:
In the ink-on-paper world we sell books to retailers far and wide on a business model that provides a level playing field, and allows all retailers the possibility of selling books profitably. Looking to the future and to a growing digital business, we need to establish the same sort of business model, one that encourages new devices and new stores.
[...] It also needs to insure that intellectual property can be widely available digitally at a price that is both fair to the consumer and allows those who create it and publish it to be fairly compensated. [...] Our disagreement is not about short-term profitability but rather about the long-term viability and stability of the digital book market.
The move by Amazon was met with anger and frustration from the literary community as the news of the “Amazon Fail” quickly spread online. Amazon was silent on the matter until Sunday:
[...] 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.
In their carefully worded capitulation statement, the company shows they believe customers will side with them by refusing to pay $14.99 for an e-book. Some people have commented on the statement with support for Amazon’s “pro-consumer” model and $9.99 price cap, citing a “Macmillan Fail“. Others support Macmillan and believe $14.99 is a fair price. Only one thing is certain: the weekend battle may have ended, but the war is far from over.