Amazon Threatens Publishers as Apple Looms
By Motoko Rich and Brad Stone
Published: March 17, 2010, New York Times

Amazon.com has threatened to stop directly selling the books of some publishers online unless they agree to a detailed list of concessions regarding the sale of electronic books, according to two industry executives with direct knowledge of the discussions.

The hardball approach comes less than two months after Amazon shocked the publishing world by removing the “buy” buttons from its site for thousands of printed books from Macmillan, one of the country’s six largest publishers, in a dispute over e-book pricing.

Amazon is the largest online seller of printed books and the biggest e-book seller in the United States, and it is trying to use its clout to hold on to its early lead in the e-book market. But the last time it went down that path, it was widely accused of abusing its position.
An Amazon spokesman, Craig Berman, declined to comment on any talks with publishers.
The company is pressuring publishers just as Apple is also preparing to sell digital books for reading on its iPad tablet, which will reach the market in early April.

After a weekend of brinksmanship in January, Amazon effectively conceded that it could not stop Macmillan from setting what it described in a post on its Web site as “needlessly high” e-book prices. The company says those prices should reflect the reduced cost of distributing digital works.

Five of the country’s six largest publishers — Macmillan, Simon & Schuster, Hachette, HarperCollins and Penguin — have already reached deals with Apple to sell their books through its iBookstore, which will be featured on the iPad. (The holdout is Random House.)

Under those agreements, the publishers will set consumer prices for each book, and Apple will serve as an agent and take a 30 percent commission. E-book editions of most newly released adult general fiction and nonfiction will cost $12.99 to $14.99.
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