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Macmillan wants to change the way it sells eBooks via Amazon and other eTailers (You get it? Retailers online=eTailers). Amazon didn't like the plan, so it pulled the "buy" button from all Macmillan titles on its website. Imagine this in a grocery store and either Coke or Frito Lay ran into the same situation. Shelves and shelves full of bottles or chips and people aren't allowed to buy them. Get it? Okay.
Even Amazon admits it must "capitulate" to big, bad Macmillan. Not that they call Macmillan "big" or "bad," but that's the underlying message. But the irony is that Amazon will make more money under the new structure, because it has been selling eBooks as loss leaders to promote sales of the Kindle. But with the iPad out from Apple, there's only one thing to say, "Be scared Jeff [as in Bezos]. Be very scared."
AMAZON.COM (TICKER: AMZN) shares are down 6% since Macmillan announced that it was switching from a wholesale pricing model to an agency pricing model (the agency model prevents Amazon from discounting e-book titles). We believe concerns over the impact of the potential change in e-book pricing and Apple's (AAPL) iPad launch have been overblown.
Even if all of the publishers move to the agency model, which is unlikely, we still expect Amazon to capture a large share of the e-book market. We also expect physical book sales, in which Amazon has a leading market position, to significantly exceed digital book sales for at least the next five years. In addition, the iPad costs two to three times more than the Kindle, and its liquid crystal display screen provides an inferior book-reading experience. Finally, we expect nonmedia sales to be the most important driver of Amazon's growth.
On Sunday, Amazon.com appeared to wave the white flag of surrender in its war with book publishers over e-book prices. But as it turns out, the battle is still raging.
As of Tuesday afternoon, both the physical and e-book editions of such Macmillan books as “Wolf Hall” by Hilary Mantel, “The Checklist Manifesto” by Atul Gawande and “The Politician” by Andrew Young were still not available on Amazon’s site.
More at the NYT Bits Blog
From today's Shelf-Awareness: "The Macmillan ban went beyond Amazon's website: reportedly without notice to Kindle owners, Amazon went into the devices and removed Macmillan titles from wish lists and removed sample chapters of Macmillan titles. This move was reminiscent of the retailer's quiet pulling last year of some e-titles whose copyrights were in question (Shelf Awareness, July 19, 2009)."
Commentary by publishing industry consultant Mike Shatzkin
Now I swear all this is true. As everybody knows, a very serious food fight broke out between Amazon and Macmillan late Friday night. All weekend Michael Cader led the way in ferreting out additional useful information and I spent most of today (Sunday) trying to write an analytical blogpost. I got it just about finished in the early afternoon, and the bottom line to what I’d written was “Amazon will not be able to sustain this.”
I decided to hold the post until after going to see Crazy Heart this afternoon and, when I came home, Amazon had already folded. But I had written a post that provided a lot of useful information, even if events had stolen my punchline.
So I’m giving it the once-over to edit it for the reality that Amazon has already announced that they will not continue to boycott Macmillan books.
On Friday, Amazon.com shocked the publishing world when it pulled both the digital and physical books of Macmillan, the large international publisher, after Macmillan said it planned to begin setting higher prices for its e-books. Until now, Amazon has been setting e-book prices itself, and has established $9.99 as the common price for new releases and best-sellers.
But in a message to its customers posted to its Web site on Sunday afternoon, Amazon said that while it strongly disagreed with Macmillan’s stance, it would concede to the publisher. The New York Times reports.
“We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles,” Amazon said. “We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books.”
Sounds like Amazon wished Macmillan didn't have a monopoly over their own titles. Perhaps Amazon wants to write, edit, publish, print, design, bind, price, market, distribute, sell and ship its own books in addition to formulating its own proprietary reading technology and software?
On the bestsellers page on Amazon you can now select a previous date and see what the bestselling books were at that time. It can be interesting to see what books are popular during historical events in the last decade and a half. For example:
Week before Sept 11, 2001
Week after Sept. 11, 2001
What impatient folk we are. While publishers are delaying the release of a book's Kindle edition to give the hardcover edition a chance to sell, Kindle readers (kindlers?) despair over the wait.
Case in point: the much buzzed about new book "Game Change," which spills secrets about the 2008 presidential election. The book has been deluged with one-star, negative reviews from apparent Kindle fans who are protesting publisher HarperCollins' decision to delay the Kindle version to Feb. 23. Those one-star reviews have contributed to a ho-hum average customer review rating of a 2.5 stars (out of 5). Customer reviews are an important factor for book sales on Amazon, and it will be interesting to see if the Kindle protests spread.
Here's one example of a customer's review of "Game Change": "This is time-sensitive material. No one is going to care in 6 weeks when it is released for the kindle. People want it now. The publisher is shooting themselves in the foot. They'd have made more money overall by offering the kindle version now."
Amazon.com today announced that Kindle has become the most gifted item in Amazon's history. On Christmas Day, for the first time ever, customers purchased more Kindle books than physical books. The Kindle Store now includes over 390,000 books and the largest selection of the most popular books people want to read, including New York TimesBestsellersand New Releases.