Amazon's Latest Twist of Publishers' Arms Makes Apple's iBookshelf Look Even Better
Dear Amazon (AMZN): WTF?!
It's been less than two months since you yanked the "buy" buttons off Macmillan's titles on your Web site, rendering direct sales of thousands of the publishers' books impossible. All because it dared suggest that e-book prices needed to be more flexible and (gasp!) possibly higher than your flat retail rate of $9.99. So you backed down. Yet now the bookish grapevine is bursting with the news that you're planning to pull a similar stunt with other, smaller publishers. If it's true, you are going to be the one paying -- with a loss of market share.
We get it, you think publishers such as Macmillan, HarperCollins (NWS), Simon & Schuster, Hachette (LGDDY) and Penguin are taking advantage of the size of their lists and forcing your hand to push prices north of a sawbuck. You want to protect your customers from these "needlessly high" prices and force the companies to fess up that e-book overhead costs are less than print.
The problem is that this is all really a ploy to keep your arms around the significant chunk (90 percent) of the e-book market that you've built around Kindle. But analysts expect that piece of pie to shrink to a fraction of its former size anyway. Mostly because big, bad Apple (AAPL) is set to send iPad into the world on April 3.
The iBookshelf will further cut into your sales, especially because the aforementioned big five have agreed that they'll forgo the old school wholesale model in order be able to set prices on a case-by-case basis for e-books (expected to be between $13 and $15). In return, Apple takes a 30 percent commission, but it also requires the publisher not to sell to anyone else for less.
That Apple agreement is kind of slick, but not as bad as what the NYT says you are trying to do. How can you demand publishers lock into three-year contracts to guarantee that no other competitor will get lower prices or better terms? No one knows what the publishing landscape will look like in three years. Why, even Kindle isn't that old and look how much has changed with your own technology and pricing on the device.
If you do this, your image as bully is sealed. I've already taken you to task for preying on individual authors (especially the self-published) whose main distribution channel is your online storefront. Smaller publishers risk the same losses if they don't cave to your demands. Is this how you want to appear to your faithful customers? All swagger and no sensitivity? Yes, it is a business, but it's one that's up for grabs in the consumers' minds. You're not the only game in town any more.
Kindle image via Amazon.com