Amazon slashes e-book prices
The online retailer has publishers up the creek without a paddle.
As The New York Times pointed out, Amazon plans to cut prices of some electronic best-sellers from $14.99 to $9.99. The Justice Department and 16 state attorneys general on Wednesday claimed that the late Apple (APPL) CEO Steve Jobs conspired with executives in the publishing industry to fix e-book prices. According to media reports, the scheme was allegedly hatched in response to a move by Amazon in 2009 and was effective a year later with the launch of the iPad to charge $9.99 for e-books. The irony is striking.
"Apple proudly described the price-fixing plan -- which gave the iPad maker a guaranteed 30% commission on each e-book it sold through its online marketplace -- as an 'aikido move,' referring to the Japanese martial art," according to the Los Angeles Times.
Apple, which has more cash than the federal government, can settle this case quickly without breaking a sweat. The publishers, however, are not so lucky. Last year, sales of e-books surpassed those of printed books for the first time, according to Amazon.com. That trend continues. According to the Association of American Publishers, sales of adult e-books topped $99 million in January, an increase of 49.4% from a year earlier. That's the biggest gain in the category. Children's and young adult e-book sales and religious e-book sales both posted triple-digit gains.
Executives at News Corp.'s (NWS) Random House; CBS' (CBS) Simon & Schuster Inc.;
Hachette Book Group, part of the European conglomerate Hachette Livre; Macmillan, which is controlled by the German company Holtzbrinck; and Penguin Group, owned by the U.K.'s Pearson, have to be sweating bullets. If they complain about Amazon's price cuts, government lawyers could use that information to bolster the case that they were in cahoots to fix prices. The best they can do is grumble that they can't support their businesses under Amazon's pricing structure, a similar argument that the music industry raised about Apple's iTunes site charging 99 cents a song.
Eventually, Apple agreed to a tiered pricing structure whereby current hit songs cost more than obscure oldies. The music industry seems content with that arrangement, which took years to create. Amazon, though, is under no immediate pressure to establish a similar arrangement with the book publishers. Industry executives allegedly thought that by working together with Apple they would counter Amazon's growing clout. Unfortunately, that foolish decision has made Amazon even more powerful and will wind up costing publishers big money.
Jonathan Berr does not own shares of the companies listed here.
I still think at $ 9.99 it's still pricey for an electronic file that they dont have to print, ship, distribute......
But I still enjoy my Kindle and won't stop buying e-books.
Looks like there may have been another side to Steve Jobs that they aren't talking about. Seems a bit greedy to me.
Authors need to bypass publishers and Amazon and Apple and offer there "artistic" works on their own site or sites specifically designed for direct publishing. Google could kill in this space. Authors could sell books for 1.99 USD and still make more than they do now. Google, where is the You Tube for authors!
Talented editors should freelance or offer their services on line to budding authors, upload your work to an experienced editor for a share of the sales, and off you go!
Baen Publishing has been publishing thier books in 7 different non-DRM'd formats since 1999 all of them costing between $4.00 - $6.00 individially and monthly bundles of 4+ books for $10-$18. No re-download limits and access to read them online as well as over 100 ebooks available for FREE from some of their most popular authors. According to Baen itself, its authors make more money on a $4.00 ebook that on the $25.00 hardback version. So for publishers whining about costs I say BS.
I hope the Gov. takes Apple and the publishing houses (more apple) to the cleaners and we E readers that have paid the price get a refund.!!!
Did Apple really need that mark up to make extras money as if they don't have enough..GREEDY
I received a Kindle for Christmas 2010 and since that time, I have purchased 285 E-books frm Amazon. Any chance for a rebate??
Amazon gives great service and Iappreciate the price slashing!
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The solid report comes a month after the retailer closed all of its Canadian operations.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.