Amazon concedes defeat in e-book spat

The price of Amazon’s e-books looks set to rise after the firm backed down from a fight with publishers over the cost of distributing material on the Kindle e-reader.
 
Amazon has been selling e-books for $9.99, but the Wall Street Journal reports the price could rise to $12.99-$14.99 because leading publishers want to switch to an “agency” business model, which sees retailers become fully-fledged agents for the publishing houses.
 
The standoff came to a head late last week when Amazon withdrew all e-content from publisher Macmillan, after it proposed the new business model. Amazon later conceded defeat, stating in an open letter to its customers that it has little choice but to acquiesce to Macmillan’s demands because the publisher “has a monopoly over their own titles.”
 
Macmillan claims the change in business model is necessary to allow new e-reader devices to enter the market, and argues it will benefit Amazon and other retailers by offering 30% commission on each sale. It pledges new e-books will appear daily, and says pricing will be in the range of $5.99-14.99.
 
The spat comes just a few days after Apple revealed it has worked closely with publishers to develop its forthcoming iPad tablet PC.
 
Amazon’s Kindle Store offered 410,000 books by end 2009, and the firm sold six e-books for every 10 physical books sold during the year, according to its Q409 results.
 

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