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Steve Jobs has made a deal with Rupert Murdoch, which may end the days of cheap e-books from Amazon.  (Source: Reuters)
Enjoy $9.99 bestsellers while you can, following the Macmillan concession, everyone wants more out of Amazon

As we predicted, the recent concession by Amazon.com in terms of electronic book pricing to “big six” publisher Macmillan opened the floodgates leading other top publishers to demand more.  

Amazon.com's electronics books have many downsides -- the potential to lose your book eventually due to compatibility, ownership concerns, and dependency on battery life of the device being used.  They also have significant upsides -- a lot of classic works are available for free, you can transport 1,000s of books in a single bag and it's much easier to locate your books.  However, the biggest advantage of all was pricing.  Whereas hardcover best sellers typically retail for $15 to $25 on Amazon.com, best-sellers have been available in e-book form for the bargain rate of $9.99.

Macmillan recently won in a battle with Amazon to raise those prices.  Amazon has agreed to raise the price of Macmillan 
New York Times bestsellers to $12.99, or in most cases, $14.99.  

Now Rupert Murdoch, the media mogul who owns HarperCollins books -- another big six publisher -- is demanding a price bump of his own.  In a conference call Tuesday, he complained, "We don't like the Amazon model of selling everything at $9.99.  They pay us the wholesale price of $14 or whatever we charge.  But I think it really devalues books and it hurts all the retailers of the hard cover books."

Murdoch commented that he was looking to renegotiate News Corp's deal with Amazon and says that Amazon has responded that it is "ready to sit down with us again."

HarperCollins Books publishes such bestselling authors as Michael Crichton and Janet Evanovich.

Besides the Macmillan concession, another factor driving up prices is new competition from Apple.  Apple recently debuted its iPad tablet computer.  While its name has been the bunt of many jokes, curiosity about the new device is high.  Apple looks to use the device to become a major competitor to Amazon and second-place Sony in the electronic books arena.  

Apple already has a deal in place with Murdoch.  He comments, "Apple, in its agreement with us, which is not been disclosed in detail, does allow for a variety of slightly higher prices."

It appears that the final blows are being struck that will ultimately spell the end of cheap e-books.  Will that hurt the format's popularity?  Or will customers stomach the changes?  That remains to be seen in coming months.





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By Jaazu on 2/3/2010 11:09:45 AM , Rating: 3
I will have to laugh a bit if this plan to extort an extra $3-$5 out of people buying ebooks kills the tiny momentum that ebooks have finally achieved up to now. I have no problem paying $25 for a physical book with a nice binding to put on my shelf and let other people think I am well read, but to pay anywhere near that for an ebook... I'd be forced to actually read the books and partake in conversations about them.. HA!! I won't do it I tell you, I won't do it....




By geddarkstorm on 2/3/2010 1:23:15 PM , Rating: 2
The funniest part is he says that Amazon pays THEM, the publishers, the full wholesale price, and then just retails it for cheap. He just wants Amazon to stop giving customer's a good deal, but it isn't going to increase his profits, as he's already getting his full wages! See:

quote:
he complained, "We don't like the Amazon model of selling everything at $9.99. They pay us the wholesale price of $14 or whatever we charge. But I think it really devalues books and it hurts all the retailers of the hard cover books."


In short, he just wants to screw over customers so we stop thinking books can be cheap, and switch back to hard copies or something.


By Oregonian2 on 2/3/2010 2:28:00 PM , Rating: 2
Yes, it's not economics so much as a power play as to who is in control.


"Well, there may be a reason why they call them 'Mac' trucks! Windows machines will not be trucks." -- Microsoft CEO Steve Ballmer













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