| Negotiations with between big companies have | | | | prices. Amazon tried to use its biggest asset, its |
| always fascinated me, probably it has something to | | | | online store to show their power, and in a nervous |
| do with the world of secrecy and NDAs that | | | | move they pulled all MacMillian titles from the store. |
| surrounds them. So when details of certain | | | | After continued negotiations Amazon gave in and |
| agreements get public, I get excited (sort of). The | | | | they agreed on a model similar to the iBook store of |
| story in which Amazon is entangled these last few | | | | Apple. |
| days is very interesting. | | | | This showed other publishers that probably they too |
| Amazon, the world's largest online retailer, has a big | | | | could get a better deal. HarperCollins and Hachette |
| piece of the book market. With its recent launch of | | | | already spoke up and the others will undoubtedly |
| the Kindle, an ebook reader, they started selling next | | | | follow. Amazon will have to reevaluate its pricing |
| to paper books also the electronic version of them. | | | | strategy. |
| They asked a fixed price of $9.99 for all titles, which | | | | One rather ironic outcome of this increased |
| is logically lower than the price for hardcover editions | | | | competition are higher prices of ebooks. |
| of the same books. Publishers were not very happy | | | | Another outcome for Amazon might be the damage |
| with this deal. Not because of the fact that they get | | | | to its brand. Pulling certain books out of its store |
| less money, Amazon pays the difference with the | | | | might leave some marks. |
| paper version, making a loss on every ebook to | | | | Over at Yahoo finance there was short story about |
| promote its device. (So if the publisher charges $15 | | | | a customer: |
| for the normal book and the ebook costs $9.99, | | | | "Doug Miller, a 45-year-old information-technology |
| Amazon will pay the publisher $5) The main argument | | | | consultant in Indianapolis, owns two Kindles and |
| of the publishers is that cheap ebooks cannibalize the | | | | dozens of Amazon e-books, but was so frustrated |
| sale of paper books. But Amazon's size allowed it to | | | | by the removal of Macmillan books that he has put |
| get these kind of deals, as they are too big for the | | | | his e-book purchases on hold indefinitely. "It was |
| publishing companies to ignore. They basically told the | | | | Amazon that was acting monopolistic. That seriously |
| publishers to take their offer or leave it. | | | | damages my trust in them," he said. "I'm very leery |
| Then came the iPad, also an e-reader. Apple agreed | | | | of further investing in any e-book platform until I see |
| with the big publishers on a model where they would | | | | some sort of standardization. In the meantime I'll buy |
| let the publisher set the price, and take 30 percent | | | | paper books -- but probably not from Amazon." |
| of the revenues. While Amazon mainly focuses on | | | | The ebook market is still developing and many |
| sales of its reader, more money might be made by | | | | customers are getting introduced to the technology. |
| taking the percentages on the content. | | | | While Amazon mainly focuses on sales of its reader, |
| Seeing what Apple has done to the music industry, | | | | more money might be made by taking the |
| there is a lot of potential in this new device. And it is | | | | percentages on the content. Although some people |
| exactly this potential that allowed publishers to relieve | | | | have lost trust in Amazon, these might only be the |
| some of the pressure in their contract with Amazon. | | | | early adopters. So if Amazon can get them back in |
| Publisher MacMillian was the first to demand higher | | | | the Kindle camp, real damage might be avoided. |