Amazon and Apple are apparently in an epic battle to sell e-books that will cost book buyers more money than what they currently pay. Who do we root for in this battle?
Steve Jobs with the Apple iPad
It started because Apple has big plans to make the new iPad the e-reading device of choice, turning the popular Amazon Kindle into digital kindling. Of course, that won’t happen since Amazon can lower the price of the Kindle ($199 sounds about right) and it will still — at least at iPad launch — offer more books to read on the iPad than Apple since the Kindle app will work on the iPad. (And it’s a good bet that app will be improved.)
Beyond that, many folks are trying to point a finger at Amazon for being evil because it sells new books at $9.99 whereas Apple wants to price similar titles at $12.99 to $14.99. The publishers argue that Apple’s price is fairer (surprise!) and are putting pressure on Amazon to raise prices. This spat led to Amazon pulling books from the Macmillon publishing house over the weekend. As of this post, Macmillon books are still not available.
This pricing issue has caused a big kerfuffle, and many media outlets have weighed in on the matter. Here’s a sample.
– Fast Company thinks Amazon hates you and publishers.
– Henry Blodgett: “Screw you John Sargent, CEO of Macmillan.”
– John Scalzi, an author I really enjoy and have downloaded three of his books to my Kindle, says Amazon failed this weekend.
Jeff Bezos and the original Kindle
Here’s the funny part: At $9.99, Amazon loses money selling ebooks but the publisher does not. Many of the big publishing houses sell ebooks to Amazon at prices greater than $10, a point Henry Blodgett and others have pointed out. At $14.99, what Macmillan wants to charge, Amazon will make money.
Of course, I’ll be spending $5 more, which will make me and many other ebook buyers think twice before hitting the purchase button.
Wall Street reads it that way, too, as Amazon’s share price fell more than 5 percent on Monday over the pricing issue. I don’t care to get all gooey over a big corporation making more money, but Amazon’s hissy fit was good for book buyers.
Now it looks like Macmillan will be able to set the prices for sale at Amazon and other publishers will have the muscle to do the same. That will cost us more if we like to buy ebooks.
Aren’t we supposed to like competition? If Amazon wants to lose money selling ebooks — sure, it’s a lure to sell more Kindles — it should be allowed.
Meanwhile, Apple wants publishers to charge higher prices so Apple and the publishers both make money on the content. How higher ebook prices will help Apple sell more iPads is beyond my economic grasp, but I suspect Apple believes — probably correctly — it will sell plenty of iPads for other reasons and make a decent profit on ebooks.
Doesn’t it sound like the Justice Department should be taking an interest in all of this?
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