Days after Macmillan books disappeared from Amazon’s inventory due to a feud over pricing, Amazon has confirmed that it has caved to Macmillan’s demands and will be raising the prices of Macmillan e-books from $9.99 to $12.99-$14.99 for hardcover and bestselling editions. The online retail giant expressed its strong disagreement with this pricing but decided to still offer the books to customers who can decide with their wallets whether they want to purchase Macmillan e-books at at what it calls “needlessly high prices”. A domino effect is beginning to be seen with News Corp-owned HarperCollins now jumping on the “We want higher pricing” bandwagon. In its earning conference call on Tuesday, News Corp CEO Rupert Murdoch clearly and concisely summarized the situation by stating:
We don’t like the Amazon model of selling everything at $9.99. They don’t pay us that. They pay us the full wholesale price of $14 or whatever we charge. We think it really devalues books and it hurts all the retailers of the hard cover books. We are not against [inaudible] books. On the contrary we like them very much indeed. It is low cost to us and so on. But we want some room to maneuver in it. Amazon, sorry Apple in its agreement with us which has not been disclosed in detail does allow for a variety of slightly higher prices. There will be prices very much less than the printed copies of books but still will not be fixed in a way that Amazon has been doing it. It appears that Amazon is now ready to sit down with us again and renegotiate pricing.
With the single decision to capitulate to Macmillan, Amazon has opened the floodgates on higher e-book pricing and we can expect that other major book publishers will seek similar increases. Any Kindle owners out there care to chime in on these price increases and the potential effect on your book buying habits?