Amazon Negotiating with Publishers Ahead of iPad, Says Report
Amazon.com has struck deals with book publishers Simon & Schuster and HarperCollins that could potentially raise the price of ebooks, according to online reports, days before Apple releases its iPad tablet PC. Amazon's Kindle e-reader faces a potentially substantial competitor in iPad's e-text feature.
According to an April 1 article in The Wall Street Journal, Amazon is also in discussions with Hachette Book Group and Penguin Group over letting publishers choose the price points for ebooks. Under the terms of the reported agreement, digital offerings from Simon & Schuster and HarperCollins will likely drift from Amazon's previous $9.99 ceiling into a range between $12.99 and $14.99.
The news comes on the eve of the iPad's April 3 release. Although unconfirmed by Apple, rumors have circulated for weeks that the company is in intensive discussions with a variety of content producers, ranging from television studios to book publishers, to port specially modified content onto the tablet. Unlike the Kindle and other e-readers, which use grayscale e-ink screens to display text, the iPad's 9.7-inch screen will be capable of displaying full color and more complex layouts.
Sony also indicated to the WSJ that it will begin making changes to its own ebook pricing in coming days.
At the end of January, Amazon confronted Macmillan, which wanted to raise the prices of popular titles such as "Wolf Hall" from $9.99 to between $12.99 and $14.99, by temporarily yanking the publisher's ebooks.
"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.com wrote in a Jan. 31 statement about the issue. "Amazon customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book."
Reports from February, though, indicated that Apple was approaching book publishers to negotiate over all matters ebook, including the possibility of price increases or discounts in response to market events. Early previews of the iPad's iBookstore indicated that most books are priced at $9.99, with a few titles costing up to $12.99.
Although Amazon's Kindle line of e-readers proved to be a hit of the holiday 2009 shopping season, the online retailer's willingness to negotiate with booksellers over higher prices indicates a desire to not be outflanked by Apple with regard to book selection. Analysts have predicted that the iPad will be a major seller upon its release, estimating some 120,000 units sold on its first day of preorder availability.