Third Publisher Demanding Higher Kindle E-Book Prices
What may turn out to be the death knell of Amazon's e-book empire sounded today as a third major publisher has rebelled against Amazon's controversial pricing structure for Kindle e-books.
Yesterday, Hachette Book Group USA CEO David Young, announced in an email to agents that the company would be following in the footsteps of MacMillan and HarperCollins by moving to an agency pricing model and demanding Amazon sell its books at a higher price.
"It allows Hachette to make pricing decisions that are rational and reflect the value of our authors' works," Young wrote. "In the long run this will enable Hachette to continue to invest in and nurture authors' careers – from major blockbusters to new voices."
Amazon has long held sway over publishers who want to include their books in the Kindle store. Amazon forced publishers to sell bestseller hardcover books for a flat rate of $9.99. The iBook application on the newly unveiled Apple iPad provided another way for publishers to get the $12.99 to $14.99 price range they wanted for e-book versions of hardcover bestsellers. After the unveiling, Apple CEO Steve Jobs predicted (starting 2 minutes into the video) predicted that Amazon's prices would soon be the same.
We may never know how much foreknowledge he had about talks between Amazon and publishers, but his words became prophetic when MacMillan demanded just that of Amazon, pulling its books from the Kindle Store until Amazon complied. HarperCollins expressed similar wishes a few days later, and now Hachette has joined the group.
This is a major turning point for Amazon. Now that a third major publisher has joined the crusade for price changes, there may be no way for Amazon to stop the rest of the publishing houses from doing the same. Penguin and Simon & Schuster are the two publishing houses that have deals with the Apple iBooks store but have yet to demand changes in Amazon prices. It may only be a matter of time until they do.
This move represents the end of an era for Amazon. For several years, the Kindle allowed the company a sort of monopoly in the e-book market despite the number of e-book retailers that had been there long before Amazon. Amazon's reach meant every publisher wanted the opportunity to sell on the Kindle, so they were willing to accept terms that they felt undervalued their books. Now that a major contender with great reach and customer recognition has joined the party, publishers have a choice and Amazon doesn't.