The Banking and Strategy Initiative

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Kindle vs iPad: It’s the (stupid) Publisher..

In a move reminding of the precipitate ways of the Music Industry, Macmillan seems to have argued with Amazon over increasing the price of ebooks in the fledgling market. Amazon, rightly moved Macmillan off its shelves, thus causing tremendous losses to MacMillan.

Amazon CEO Jeff Bezos announces the release of Kindle 2 in New York

We can tell you as customers that even $9.99 is not going the whole way for market development of the e-books market. Apple’s iPod had revolutionalised the music industry by making songs available for $0.99 ea. However, Apple had avoided the public spat and convinced publishers to go along with it. The pecuniary advantages of negative reinforcement may well be limited.

Apple’s ibookstore is planning to price titles at a steep $12.99 and $14.99. However, amazon’s action may also be compromised if it resricts the ban to only e-books from MacMillan Titles and should go the whole way.

On the flip side, even if MacMillan sells half its inventory thru Amazon, it will lose out on those markets in the next year or so and sales will surely dip by aleast 8-10% from the defranchising. Amazon’s model may not dissuade from bestsellers or any titles already preselected in the customer’s mind but when it comes to browsing and selecting purchases and gifts based on Interests, an immediate negative impact is likely on those not available at the site.

C-NET published this shocking piece of news yesterday has pulled books from Macmillan, one of the largest publishers in the United States, in a dispute over the pricing on e-books on the site.
The publisher’s books can be purchased only from third parties on
A person in the industry with knowledge of the dispute, which has been brewing for a year, said Amazon was expressing its strong disagreement by temporarily removing Macmillan books. The person did not want to be quoted by name because of the sensitivity of the matter.
Macmillan, like other publishers, has asked Amazon to raise the price of e-books to around $15 from $9.99.
Macmillan is one of the publishers signed on to offer books to Apple, as part of its new iBookstore on the iPad tablet unveiled earlier this week.


This entry was posted on January 31, 2010 by in Media and Entertainment, O'nomics, Retail Lifestyle, US and tagged , , , , , , , , , , .


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