Amazon Battles Apple By Arm-Twisting Publishers 137
bizwriter writes "Apple has upset the e-book pricing cart by agreeing to a so-called agency model, where the publisher sets the price and the seller takes a cut. This goes contrary to the degree of control Amazon likes, so although it apparently gave in to Macmillan back in February, it turns out that Amazon continues twisting arms. The problem publishers face is that Apple has a most-favored-nation clause, so it gets the best deal that the publishers offer. If the publishers give in to Amazon, then they also have to provide the same terms to Apple."
This is unexpected, how? (Score:4, Interesting)
Competition from a new contender that is known to be a strong player causes the strongest early market entrant to throw a hissy fit, news at a 11.
Until I can actually BUY an e-book, not rent them for life, the entire market will remain irrelevant to me.
Amazon is fighting for their life here, remember (Score:4, Interesting)
Forcing an "agency model" on any retailer is going contrary to both history and market standards. The general model for booksellers is to buy wholesale, at somewhere around 40%-50% of MSRP, and then sell at some price between that and MSRP. Amazon has discounts of MSRP all the way from 55%, to only a few percentage points. Barnes & Nobles has similar prices (if you become a "B&N Member," for US$25/year, the prices are pretty much the same as Amazon's. A bit lower sometimes, a bit higher sometimes.)
What's really going on here is power: the publishers have decided they don't want retailers undercutting each other -- that leads to a single player having market dominance, which allows them to try to force concessions (lower prices, content changes, etc.) from the publishers. As examples of this, see Amazon and Wal-Mart.
When Apple joined the ebook market, however, they were able to take the same "we don't care about making a profit on content" attitude they have for music, and offer it to the publishers. And the market share Apple can offer with the iPad is probably at least as large as Amazon's current market share with is Kindle. (And unlike Amazon, Apple won't be paying the end-user bandwidth costs.) This gives publishers who are willing to sign up with Apple enormous negotiation power with Amazon -- over ebooks. Amazon's only negotiation power that can counter that is the physical book market.
Personally, I would certainly be offended if someone said, "You will sell this product at a price we dictate, and only take 15%. You cannot charge more to make more money; you cannot try to maximize profits through selling more by offering it for less. And if 15% of an arbitrary price we set isn't enough for you to make profit -- or even enough for you to run your business, tough." And I'd fight it as best I could.
Of course, that's also pretty much Amazon's attitude towards the publishers. So a pox on all of them, really.
Alternate Headline (Score:2, Interesting)
Apple Strongarms Publishers: They are not allowed to sell it cheaper anywhere else!
Lesser of the two... (Score:5, Interesting)
One control-freak company wants to sell cheaper books, while another control-freak company wants to sell more expensive books?
I know which weevil/weasel I will go with.
and while this is just one side of the argument, but anyone who thinks Apple's deal with the publishers will work out better for the authors should read this:
http://techcrunch.com/2010/02/07/its-nsfw-because-the-word-fuck-is-in-the-url/ [techcrunch.com]
What's best for consumers (Score:3, Interesting)
Re:Lesser of the two... (Score:3, Interesting)
Re:First they ignore you.... (Score:3, Interesting)
You may be right. In 5 years, all authors could be publishing independently. But right now there's money to be made by selling books put out by the big publishing houses. Amazon and Apple are competing for that money.
I think you mean, "Then they lose". "Loose" is the opposite of "tight". "Lose" is the opposite of "win", "find", and "gain". This is important.
Re:Meanwhile (Score:4, Interesting)
Exactly, there's Sony, B&N and others. I think par tof Amazon's success is that the press talks about no one else
I think Amazon's success is based on how easy it is to use, and get books on it. The Apple mantra, "it just works", sure applies there. Go to Amazon, purchase and a minute or two later, it's on your Kindle. Many others providing this hardware don't have as integrated a solution as Amazon does - other than B&N, probably none. Also, their hardware is good.
Now we have Apple who has, imo, a very half-assed device and they're unfortunately getting more attention then superior competition which means they'll probably get more sales than they deserve.
"Half-assed"? Apple does a lot of things, but "half-assing" is not one of them. They do, however, have evil lockdown schemes - even to the point of trying to censure publications in app form. Europe doesn't have the weird American "violence good, boobies very bad" attitude, so there have been cases of German magazines being censured by Apple [guardian.co.uk]. Other than the worrysome censoring and lockdown, I'm sure it's going to be a very good general purpose device. The Kindle is a specialized device - with e-ink, it'll last a lot longer and be a lot better when reading text books.