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Amazon and Apple and e-books

March 19, 2010 |  8:03 am


Was Amazon's removal of "buy" buttons of MacMillan's titles in January just a practice run? Two reports this week -- in subscription-only Publishers Marketplace and the New York Times -- say that Amazon is threatening to stop selling books by publishers who do not meet their terms for e-book sales.

The impetus for the conflict is Apple's iBookstore. Amazon currently dominates in the e-book sales marketplace, but when the iPad is released in April and Apple begins selling e-books, the company may become a major player. That in itself wouldn't be a big deal, except that the two e-retailers have different sales models -- and each is pushing publishers to adhere to just one.

Amazon follows a tradition wholesale/retail model that allows it to set the price for the end consumer. They've set that price point low -- a new book might sell for $10 on the Kindle while the hardcover costs $25 -- and this has made many Kindle readers happy. But publishers have said that the low e-book price is unsustainable.

Apple will use an "agency model," as it has in its iTunes store; the owner of the work keeps 70% of the retail price, and Apple, the "agency," takes 30%. This model has its own problems -- it doesn't quite match up with the contracts authors have signed with publishers -- but publishers like that it allows them more flexibility in pricing. Five major publishing houses have signed on with Apple -- Random House is the only holdout remaining among the big six.

As the launch of Apple's new e-book store opens, Amazon is pushing to renegotiate contracts, according to the New York Times. Smaller publishers are likely to really feel the squeeze. And authors can do little more than sit on the sidelines and hope that their books wind up for sale in both places.

Well, they can do a little more: the Authors Guild's watchdog tool, Who Moved My Buy Button, which launched at the tail end of Amazon's showdown with MacMillan, may have a new life. Authors can sign up to receive updates in the event that Amazon stops selling their books.

-- Carolyn Kellogg