MacMillan Forces Amazon To increase eBook Prices To $14.99

MacMillan LogoIn a recent drama, MacMillan made it publicly known that they were having problems with Amazon over the pricing scheme of eBooks on the Kindle platform. MacMillan was apparently already in talks with Amazon for quite sometime about the prices being raised from Amazon’s current $9.99 maximum price.

Whilst everyone can see that over pricing digital content can really backfire (look at digital music or movies for lots of examples), it seems like MacMillan has been really hell-bent on increasing the pricing based on their latest agency model. Under this model, MacMillan would like to make sales through agents, who would charge the normal 30% commission that standard throughout the industry. The extra cost of course gets pushed on to the buyers and this is where Amazon did not want to comply with MacMillan’s requests.

After negotiations broke down, Amazon took off all MacMillan books from the Kindle store. However, even then the Kindle makers acknowledged that MacMillan owned too many important titles for Amazon to be able to keep those books away from Kindles. And true to their predictions, Amazon ultimately had to give into MacMillan’s demands to increase the prices.

Under the current model, the eBook prices will be capped at a maximum of $14.99 instead of $9.99 as per existing models. The average prices are supposed to start from $5.99 and go up to $12.99 but the real situation would be that most important titles will be priced between $12.99-$14.99. MacMillan gave everyone a glimmer of a hope saying that they will bring the prices down dynamically. However, that simply means that they will gradually reduce prices on existing titles but will likely price newer titles high.

These new prices put Kindle costs on the same level as those on iPad, making the gap between the two become much smaller when it comes to pricing.

5 thoughts on “MacMillan Forces Amazon To increase eBook Prices To $14.99

  1. If Macmillan is hellbent on forcing this pricing on it’s customers, then I will be forced to forego Macmillan books in the future unless they are reasonably priced. Unlike some, I will not give them bad reviews, because reviews should be based on content, not price. I will attempt to hit Macmillan where they will most feel it: in the pocketbook and I suggest that others do the same.

    Before the Kindle came into my life, I either made do with the library or waited until the cheaper paperback came out. There is no book that I must read so urgently that I can’t wait a few months. However, I agree with most in that e-books should not cost as much as their paper counterparts. These days, the book is already in an electronic format before it goes to the printer. The cost to format it as pdf, ePub or Mobi are minimal. The publisher incurs no more costs whether one copy or three million copies are sold. Anything past the initial formatting costs is 100% profit.

    “The future of publishing” is not fueling this, John Sargent”s greed is what is fueling this. Well, to quote Henry Blodget (Silicon Alley Insider Jan 31, 2010): “Hey john Sargent, CEO of Macmillan Books, Screw You!”

    For the record, here are all the subsidiaries of Macmillan Books:
    Farrar, Straus and Giroux
      FSG Hardcovers
      FSG Paperbacks
      Hill & Wang
      Faber & Faber
    First Second
    Henry Holt & Co.
      Henry Holt Hardcovers
      Henry Holt Paperbacks
      Metropolitan Books
      Times Books
    Macmillan Audio
      Behind the Wheel
    Nature Publishing Group
    Palgrave Macmillan
    Quick and Dirty Tips
    Scientific American
    St. Martin’s Press
      Minotaur Books
      Thomas Dunne Books
      Tor Books
      Forge Books
      Orb Books
      Tor/Seven Seas

  2. So much for ebooks being cheaper dream, its now a nightmare. As a person on limited income, I can’t afford to buy new books and used ones are ok but shipping costs now make it harder to buy. Reading has been moving towards only for the rich in the last 20 years. I am now convinced publishers really want to kill libraries next ;-) Hey, here is an idea Jeff, donate a million Kindles to libraries with books!
    As a disabled person, I was really hoping for a cheap, smart eReader that also supported my needs too. I am not so sure now that will come in my lifetime.
    A curse on all greedy eReader OEMs and publishers.

  3. These publishing companies are playing a losing game! They better charge what they can because they are in a shrinking business; similar to the newspaper industry! I love my Kindle but if I was in the publishing business I would fire any management who did not attempt to increase revenues!

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