Sunday, January 31, 2010

MacMillan trying to impose an "Apple Tax" on other E-Book readers?

It appears that another shot has been fired in the latest E-book reader wars.  On at 5:30 pm EST, January 30 John Sargent published a letter via Publishers Marketplace, explaining that they were, at least temporarily, terminating their sales arrangements with Amazon.

In the letter Mr. Sargent explaned their position which appears to be "We wish to raise the price of your e-books to the same price we will be getting from Apple.  Since you'll be getting more money that way we don't see what the issue is."  Apparently Mr. Bezos and the rest of the Amazon staff replied with a resounding "No" and proceded to say "Ok, we don't want to raise prices to our customers.  If this means we can't sell you books, so be it"  Amazon then proceeded to remove all MacMillan books, in any format except audio, from their website.  In fact you can still order MacMillan books thru Amazon since they are honoring their comittments to third party sellers who supply MacMillan books.

Why did this happen? In my opinion this is an attempt by Macmillan, and possibly Apple, to impose the "Apple Tax" on electronic books and remove a competitive advantage from Amazon and the Kindle.  From the beginning I was a bit amazed that Apple planned to charge up to fifty percent more that other e-book sellers.  Considering the initial price of the iPad will be higher than the majority of e-book readers it would have made more sense for Apple to price e-book content more competitvely.  Since they apparently won't do that the plan seems to be raise the prices to all the other retailers.  I do not know if this is a decision made soley by MacMillan or was 'forced' on them by the content agreement with Apple. The whole event feels like it will turn in to a similar event as the Google Voice debacle where AT&T said it was Apple's decision and Apple said it was AT&T's request. I wonder what the documents will show if this case comes to litigation?

Personally I applaud Jeff Bezos and the rest of Amazon for having the courage to take a potential huge revenue loss in order to honor their committment to their customers and keep the prices as promised (i.e. $9.99 for NY Times best sellers).  I believe that this decision on MacMillan's part is shortsighted and will backfire on them.  Right now they have lost a MAJOR retailer for their content and it will be at least 2 months or longer before they can hope for any significant revenue from Apple iBook sales.

I hope that this is resolved soon but also hope that other e-book distributors such as Barnes and Noble take the same road as Amazon and refuse to allow MacMillan to raise the price of content to readers.

Posted via web from Dr. Mom's Posterous

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