Amazon Shares Down 6% After Accepting Macmillan’s eBook Pricing Strategy

After a much heated up debate between the two companies, Amazon.com has finally agreed to give in to publishing giant Macmillan and will be selling e-books at a higher price (price that Amazon thinks is too high).

Hilary Mantel’s “Wolf Hall”, Andrew Young’s “The Politician” and other books published by Macmillan were made unavailable for sale on Amazon.com last Saturday, as Amazon thought the publishers’ new pricing strategy was too high for the e-books.

In an attempt to stay ahead of the competition that Amazon is facing from Barnes & Noble, Sony (and now Apple once the iPad is available) Amazon had decided to offer e-books at $9.99. A price that publishers say is too low and would seriously hurt their sales revenues for some of the higher priced hardcovers.

Amazon told customers on its online Kindle Forum that it “expressed our strong disagreement with Macmillan’s determination to charge higher prices”.   Under the new pricing strategy e-books will be priced from $12.99 to $14.99 the first time it is offered and prices will change over the time.

“We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books,” Amazon said in the posting.

Macmillan is one of the largestt English language publishers division including St. Martin’s Press, Henry Holt & Co. and Farrar, Straus & Giroux.

Macmillan CEO John Sargent told The Associated Press that they were in discussions with Amazon in order to resolve the differences.

As per Amazon other publishers might “see this as an opportunity to provide attractively priced e-books as an alternative.”

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