Price War Over Books Worries Industry

By MOTOKO RICH in Thw New York Times, October 16, 2009

A tit-for-tat price war between Wal-Mart and Amazon accelerated late on Friday afternoon when Wal-Mart shaved another cent off its already rock-bottom prices for hardcover editions of some of the coming holiday season’s biggest potential best sellers, offering them online for $8.99 apiece.

Publishers, booksellers, agents and authors, meanwhile, fretted that the battle was taking prices for certain hardcover titles so low that it could fundamentally damage the industry and the ability of future authors to write or publish new works.
The price cutting began on Thursday when Wal-Mart announced that it would take pre-orders for 10 yet-to-be-published hardcovers for $10 apiece on its Web site, Walmart.com. Later that day Amazon quietly began cutting the prices of those same titles to the very same $10, prompting Wal-Mart to lower its price to $9, a markdown of 59 to 74 percent off the list price of the books. Amazon had matched the $9 price by Friday morning, and Wal-Mart had lowered its price again, to $8.99, by late afternoon.
The titles affected include Sarah Palin’s memoir, “Going Rogue”; John Grisham’s short-story collection, “Ford County”; Stephen King’s “Under the Dome”; Barbara Kingsolver’s new novel, “The Lacuna”; and the latest installment in the Alex Cross thriller series by James Patterson, “I, Alex Cross.”
Although Wal-Mart, Amazon and other retailers like Costco, Target and even pure bookstore chains like Barnes & Noble typically discount best sellers, they usually don’t take more than 50 percent off the list price. Wal-Mart’s move, and Amazon’s reaction, signaled a new threshold in price cutting for books and left publishing insiders wondering how low it would go when the beleaguered industry is already worried about the effect of $9.99 e-books and a slowdown in book sales over all.
On Friday a spokeswoman for Wal-Mart said in an e-mail message that the company would “continue to adjust our pricing so that Walmart.com offers the lowest prices on these top pre-sellers in books.” Amazon declined to comment.

Read the complete article at NYT.