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Amazon pulls Macmillan titles in first e-book skirmish

January 30, 2010 |  9:20 am

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If you want to buy Hilary Mantel's popular, prizewinning "Wolf Hall" from Amazon.com today, you'll be getting it from some third-party vendor. Same for Orson Scott Card's "Hidden Empire" and the Hungry Girl cookbooks. In the place where the Amazon price should be, you'll find only a double dash.

That's because those books are all published by Macmillan, and Amazon has pulled all Macmillan books from its cybershelves. Macmillan, one of the big six publishers, includes publishing houses Henry Holt & Co., science fiction-focused Tor/Forge and the Tiffany of fiction, Farrar, Straus and Giroux.

Apparently the dispute arose from tensions over e-book prices. Amazon likes $9.99 for e-books, but publishers do not. The New York Times reports:

A person in the industry with knowledge of the dispute, which has been brewing for a year, said Amazon was expressing its strong disagreement by temporarily removing Macmillan books. The person did not want to be quoted by name because of the sensitivity of the matter.

Macmillan, like other publishers, has asked Amazon to raise the price of e-books to around $15 from $9.99.

The $9.99 price is a loss leader for Amazon, which has used it to help gain e-book market share for its reader, the Kindle. Publishers are concerned about the downward pressure on prices.

Up until Tuesday, a publisher like Macmillan had no real alternative if it was unhappy with Amazon's e-book prices. But when Apple announced its iPad and an upcoming iBook Store on Wednesday, the e-book landscape changed. Five publishers were announced to be working with Apple; Macmillan is one of them.

The dispute between Amazon and Macmillan has bled beyond e-books, however. All formats of Macmillan books are now unavailable for purchase from Amazon. And that may be tough on the publisher.

Who loses? Will people seeking Macmillan hardcovers and paperbacks on Amazon buy from the secondary retailers? Will rival online retailers Barnes & Noble and the independent Powell's see a sudden bonanza? Will people leave their screens and walk into their local bookstores to get "Wolf Hall"? Or will they simply get "The Help" instead?

After the jump: on e-book pricing

Macmillan isn't the only company that's been unhappy with the $9.99 price point. The tension has been public since Amazon announced the Kindle DX in February 2009.

"We do not agree with their pricing strategy," Simon & Schuster Chief Executive Carolyn K. Reidy told the New York Times. "I don’t believe that a new book by an author should ipso facto be less expensive electronically than it is in paper format."

Amazon CEO Jeff Bezos disagreed: "E-books should be cheaper than physical books. Readers are going to demand that, and they are right because there are so many supply chain efficiencies relative to printing a paper book."

Bob Miller, president and publisher of the foward-thinking HarperStudio, was on Reidy's side. "It only costs us about $2.50 to $3.00 less for us to publish the e-book, not $18.00 less," he said last year. "We need to find the right pricing somewhere between the hardcover list price and the money-losing $9.99 that Amazon is teaching consumers to expect."

"The pricing in publishing has very little to do with manufacturing costs and most to do with the cost of author talent," the unnamed head of a publishing house told Publishers Weekly in May. "That does not go away when you sell an e-book."

Author Cory Doctorow disagrees: "Although there are sunk costs in book production, including the considerable cost of talented editors, copy editors, typesetters, PR people, marketers, and designers, the incremental cost of selling an e-book is zero," he writes today on BoingBoing.

Without seeing publishers' balance sheets, it's hard to say for sure -- is asking $15 for a ebook greedy or essential to a viable business model? 

Author John Scalzi proposes this solution:

Do I think Macmillan (or anyone else) will be able to sell $15 e-books? They could; after all, they sell $25 hardcovers (and similar amounts for e-books, depending on the retailer). Now, some people won’t spend that much for a book, so they pick up the book later when it’s an $8 paperback. That’s fine, too. Likewise, I think it’s fine to attempt to charge $15 (or more) for an e-book for a brand-spankin’ new release to service the folks who just can’t wait, drop it to a lower price point (say, $10) later on in the run, and then drop it again to $8 or so when the paperback hits. That’s how I would do it, in any event.

Sounds like a good idea to me, too. But will publishers and online retailers think so?

-- Carolyn Kellogg

Image: A screenshot of Amazon's "Wolf Hall" page, taken at 7 a.m. on Jan. 30, 2010.

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