Saturday, March 17, 2012

Amazon vs Apple and publishers

While the war to make ebooks available at very low prices might just be beginning, it looks like there is at least one giant called Amazon fighting on our side. Big names like Apple and publishers like Simon & Schuster Inc., Hachette Book Group, Pearson, Macmillan and HarperCollins might be standing against us, but now that the dispute is taken at the level of giants we can expect big changes to the malleable scenery of ebook selling.

As reported by the Wall Street Journal,  the US Justice Department has warned Apple and the five publishers mentioned above that it plans to sue them for colluding to raise the prices of electronic books. This comes following Amazon's decisions to reject deals with publishers that would allow Amazon to sell their ebooks at any price.

Amazon has been fighting to preserve the traditional "wholesale model". In this model, the bookstore buys the books at around half the nominal price and then sells it at any price. Usually, it is expected that the bookstore will ask for more than what it paid so that it can make a profit, but that does not always happen with Amazon. Amazon's aggressive policy to spread its Kindle device and convert people into reading ebooks made Amazon sell many of the ebooks at $9.99 which is less than what it paid for them.

The publishers were less than happy about this move. Being afraid that people will get used to low prices and that Amazon will be the unique player in the ebook market dictating its own terms they sought for alternatives. And they found Apple! Apple offered the "agency model" to the ebook market. In this model, the publisher sets her own price and Apple gets 30% of the profit. This allows ebooks to be sold at ridiculously high prices, something that Amazon would never want.

There are two big ironies here: The first one is that Apple revolutionized the industry of music by offering tracks for $0.99 at the iTunes store. Now they are working to support high prices for ebooks. The second is that Amazon offers the "agency model" for independent authors who want to publish with them! So if anybody clicks on the "publish with Amazon" button they are allowed to set their own price and Amazon gets a portion of the profit. I personally fail to see why this distinction...

For now I guess we remain in waiting mode to see if any legal action is taken. Even if it is, it is far more likely that the issue will end up in some kind of settlement rather than in the courts. However, from the reader's point of view this is a dispute of great interest. Amazon might just be a company that is pushing for its own interests but in this case the interest is mutual and having cheaper ebooks will be beneficial for everyone.

Of course the price that Amazon is fighting for ($9.99) is not even close to ideal and there is still a long way to go before we reach the 99  cents, but as far as the pressure is resulting in a dropping of prices we know that we are on the right track and I can be a little happier than I was yesterday.


  1. Since library dot nu has been taken down, very difficult to find such site to get ebook about our topic.

    I hope library dot nu will be live again soon. Or make the price of ebook more cheap than ordinary book.

  2. Please take note of the fact that was integrated with amazon books page. A very surprising combination.

    1. I am not sure what you mean. provided all those books for free while you still have to pay at Amazon. An integration where all the ebooks will be available for less than $1 is something we are fighting for from this blog but we still have a long way to go.

  3. I mean whenever you clicked on a book on gigapedia (and, the product details, product description etc. were the same and provided in the same format as on the amazon book page.
    If I remember correctly, you were even able to read the customer reviews.
    What is more, gigapedia ( itself declared that their service was integrated with in this respect.
    So how come amazon did not notice that?

    1. Amazon do provide a web service API one can use to retrieve book details for any book given its ISBN.


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