Amazon Caves to Macmillan With Passive-Aggresive Letter

Two days after pulling all Macmillan titles, both physical and electronic, from its site, Amazon has decided to reverse gears and agree to Macmillan’s call for price changes. Read the NYT story here.

In essence, the battle was over how e-books are priced. Macmillan wants e-books to have flexible pricing that mirrors how physical books are sold (new books cost more in hardcover form, then get cheaper down the road) albeit at a lower price curve than physical books since digital files are easier to produce. Amazon wanted to keep e-book prices under 9.99 at all times to promote the sale of Kindles.

Both sides’ viewpoints are understandable here, though I find Amazon’s pretense of fighting for the poor readers to be fairly silly. Amazon’s goal is of course not to make less money and help out readers, their goal is to dominate the e-reader market. To them, it is worth selling books for 9.99 even at a loss to Amazon because it helps them monopolize the market. That is common corporate practice, but let’s not kid ourselves that Amazon is some kind of Robin Hood stealing from the evil Publishing Sheriffs.

Amazon was smart to end this, as I think it was ultimately a bad PR move to remove all Macmillan books, even physical ones, from their stores. That move hurts Macmillan but it also hurts the countless authors Macmillan publishes, many of whom wrote angry blog posts and vowed to never work link or promote Amazon again.

Amazon announced its change in a fairly passive-aggressive letter that wraps itself in fighting-for-the-little-guy rags and seems to urge readers to refuse to buy e-books that cost more than 9.99. This seems like a smarter PR tactic and ultimately it will be readers who decide how much e-books are worth:

Dear Customers:

Macmillan, one of the “big six” publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.

We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. 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 customers will at that point decide for themselves whether they believe it’s reasonable to pay $14.99 for a bestselling e-book. We don’t believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative.

Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!

Thank you for being a customer.

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