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Amazon reads writing on the wall, relents in e-book price dispute; customers can kiss $9.99 best-sellers goodbye

Posted by on February 1, 2010 – 9:01 am

kindle2Amazon.com has yielded to pressure from publishers who sought higher prices for electronic book downloads, ending a standoff that culminated over the weekend with all books from Macmillan being pulled off the online retailer’s virtual shelves.

Update: Amazon seems to be dragging their feet in relisting the Macmillan books it pulled down over the weekend.

Amazon had been charging $9.99 for new best-sellers in e-book format for its Kindle device, whereas new best-selling hardcover novels usually fetch $24 or more. Macmillan wanted a business model that set e-book prices at $12.99 to $14.99 upon release. But Amazon, eager to keep prices down as its competition in the e-book market explodes, wouldn’t budge.

Macmillan had help in its revolt from Apple, which last week announced the launch of its iPad device and a new online store for e-books that will mimic its iTunes music store — and let publishers, including Macmillan, set their own prices.

According to an Associated Press report, Amazon expressed strong disagreement with Macmillan’s demands on Sunday in a post on its customer forums Sunday, but conceded:

“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.”

Earlier this month Amazon announced a plan to expand royalties for self-publishers on the Kindle platform, while at the same time keeping prices down for consumers.

Amazon became the target of a lawsuit in July when a high school student sued the e-tailer for deleting an e-book he bought for the Kindle device. At issue were digital copies of George Orwell’s classics 1984 and Animal Farm, which turned out to be unofficial editions that the company did not have the right to distribute and therefore yanked back, right out of users’ Kindle units. The heavyhanded way in which it was done sparked a flood of comparisons to Orwell’s dystopian 1984 future.

Amazon now says the rights issue has been resolved and has offered free books or $30 to customers who lost their copies of the works.

Four American universities — including ASU — just settled lawsuits with blind advocacy groups over their use of Kindles in the classroom. Blind students felt the Kindle DX’s lack of a nonvisual user interface put them at a competitive disadvantage with their sighted classmates. While the device has a mode that reads text aloud to users, its menus have no such audio capability. In December Amazon announced features to addresss the complaints will be included in a new model set for release this summer.

In October, Amazon announced it will release a free software application for Windows PCs that will read the same e-books as its $259 Kindle device.

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