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Updated Monday, February 8, 2010 11:18 am TWN, By Charlotte Raab, AFP

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U.S. book publishers smiling again as Kindle rivals emerge

Since the release of the Kindle two years ago, Amazon has sold digital versions of hardcover new releases and bestsellers for US$9.99, a move primarily aimed at driving sales of the online retail giant's e-reader. Publishers were generally opposed, believing the price too low, but were not in a position to argue while Amazon was the only game in town.

That is no longer the case and the revolt against Amazon was immediate.

Just days after the wraps were taken off the iPad, Macmillan informed Amazon it wanted to begin charging between US$12.99 and US$14.99 for e-book versions of most hardcover new releases and bestsellers. Macmillan said it would give Amazon a 30-percent cut, as with Apple.

Amazon protested, temporarily pulling Macmillan titles — both print and e-books — from its online bookstore, but acknowledged that “ultimately, however, we will have to capitulate and accept Macmillan's terms.”

Another major publisher, Hachette Book Group, quickly followed Macmillan.

“It's important to note that we are not looking to the agency model as a way to make more money on e-books,” Hachette chairman and chief executive, David Young, said in a letter to literary agents.

“In fact, we make less on each e-book sale under the new model,” he said. “We're willing to accept lower return for e-book sales as we control the value of our product — books, and content in general.

“We're taking the long view on e-book pricing, and this new model helps protect the long-term viability of the book marketplace,” Young said. Gartner analyst, Allen Weiner, said it remains to be seen whether consumers, having gotten used to paying US$9.99 for a bestseller or a new release, will pay more.

“The precedent may have already been set,” Weiner said. “Consumers may not pay more than US$12.”

“The damage that Amazon has done may be irreparable,” he said. “The cow is out of the barn. I don't know how you get the cow back in the barn.”

At the same time though, “we're in the process of having all distribution lines and pricing models redrawn,” Weiner said. “It's Chapter One in all of this, but it may or may not dictate what happens at the end.”

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