Amazon has pulled books from publishing giant Macmillan, according to the New York Times. Authors — and book buyers — began to notice last night that Amazon was no longer selling any of Macmillan’s titles (although they can still be purchased on the site from third-party sellers). The skirmish is most likely the latest chapter in the bitter war that Amazon and publishers are waging over the cost of e-books. Along with other companies, Macmillan has been pressing Amazon to raise the price of e-books, while Amazon is keen to keep prices low to promote its reader, the Kindle. (The $9.99 e-book prices advertised during the holiday season were a special point of contention.) So it is any coincidence that Macmillan is emboldened to make such demands just days after the unveiling of the iPad from Apple? Probably not. Apple, after all, made it clear it will allow publishers more freedom to set their own prices for e-books. And when Steve Jobs was asked at the iPad press conference why customers would buy an e-book for $15 from Apple if they could get it for $9.99 on Amazon, he replied, “That won’t happen…Publishers are actually going to pull their books from Amazon because they’re not happy.”
Macmillan is, of course, one of the biggest book companies in the world and its imprints include Farrar, Straus & Giroux, Henry Holt and St. Martin’s Press, which publishes Janet Evanovich and Augusten Burroughs, amongst many others.
UPDATE (6:00 p.m.): Amazon did not respond to a request for comment. Macmillan CEO John Sargent issued this statement moments ago, addressed to Macmillan authors, illustrators, and the literary agent community: “This past Thursday I met with Amazon in Seattle. I gave them our proposal for new terms of sale for e-books under the agency model which will become effective in early March. In addition, I told them they could stay with their old terms of sale, but that this would involve extensive and deep windowing of titles. By the time I arrived back in New York late yesterday afternoon they informed me that they were taking all our books off the Kindle site, and off Amazon. The books will continue to be available on Amazon.com through third parties. I regret that we have reached this impasse. Amazon has been a valuable customer for a long time, and it is my great hope that they will continue to be in the very near future. They have been a great innovator in our industry, and I suspect they will continue to be for decades to come. It is those decades that concern me now, as I am sure they concern you. In the ink-on-paper world we sell books to retailers far and wide on a business model that provides a level playing field, and allows all retailers the possibility of selling books profitably. Looking to the future and to a growing digital business, we need to establish the same sort of business model, one that encourages new devices and new stores. One that encourages healthy competition. One that is stable and rational. It also needs to insure that intellectual property can be widely available digitally at a price that is both fair to the consumer and allows those who create it and publish it to be fairly compensated. Under the agency model, we will sell the digital editions of our books to consumers through our retailers. Our retailers will act as our agents and will take a 30% commission (the standard split today for many digital media businesses). The price will be set for each book individually. Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99. At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99. E-books will almost always appear day on date with the physical edition. Pricing will be dynamic over time. The agency model would allow Amazon to make more money selling our books, not less. We would make less money in our dealings with Amazon under the new model. Our disagreement is not about short-term profitability but rather about the long-term viability and stability of the digital book market. Amazon and Macmillan both want a healthy and vibrant future for books. We clearly do not agree on how to get there. Meanwhile, the action they chose to take last night clearly defines the importance they attribute to their view. We hold our view equally strongly. I hope you agree with us. You are a vast and wonderful crew. It is impossible to reach you all in the very limited timeframe we are working under, so I have sent this message in unorthodox form. I hope it reaches you all, and quickly. Monday morning I will fully brief all of our editors, and they will be able to answer your questions. I hope to speak to many of you over the coming days. Thanks for all the support you have shown in the last few hours; it is much appreciated. All best, John.”