Amazon pulls plug on, then bows to publisher in e-book row

IDG News Service - After a brief protest, Amazon.com will continue to sell e-book titles from Macmillan despite the publisher's decision to raise prices for e-books.

Amazon said it briefly halted sales of e-books from Macmillan for its Kindle e-reader device after learning that Macmillan wanted to charge $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.

The dustup with Macmillan could kick off highly competitive battles within the e-book market. Apple is vying for a slice of it with the launch of its iPad last week and the upcoming launch of iBook, a marketplace to buy publishing content. Other e-book devices are on the market from manufacturers such as Sony and Foxit.

Amazon generally chooses to sell new Kindle releases at $9.99. Macmillan, however, wants to change to an "agency model" in which it sets prices for its products, Amazon said.

In a pointed notice to customers posted Sunday night, Amazon said it expressed its "strong disagreement" with Macmillan and temporarily cut off the sale of all Macmillan titles.

That decision, however, was soon overturned.

"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," the company said. "Amazon customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book."

Amazon said it doesn't expect any of the other five big publishers to make the same decision. Amazon suggested the price increase will create opportunities for other authors and publishing companies to supply "attractively priced e-books as an alternative."

Kindle e-books are typically cheaper than hardcover versions of the same title today, but if e-book prices rise too far, Amazon customers may find it harder to justify purchasing even the cheapest Kindle device, which costs $259 with a 6-inch screen.

Amazon's customers appear to be in clear favor of the $9.99 price and against Macmillan's move. In an Amazon forum titled"Boycott anything over $9.99," user Knipfty wrote: "Macmillan may have committed itself to a long slow death by raising its prices. I am OK with that as the market will adjust and new opportunities will be found. I today will not buy any book that Macmillan publishes."

Macmillan officials in London did not have an immediate comment this morning.