Amazon reaches new e-book price deals with Simon & Schuster, HarperCollins similar to pricing agreements struck between Apple and other publishers for the iPad
April 1, 2010
– Amazon.com Inc. has reached new agreements with some publishers that had been fed up with the low prices Amazon charges for electronic books that go with its Kindle e-reader. This comes just as Apple Inc. is about to launch its competing iPad device.
Simon & Schuster, which is owned by CBS Corp., and HarperCollins, which is owned by News Corp., said late Wednesday they have signed new e-book deals with Amazon. They declined to detail their agreements. But Simon & Schuster spokesman Adam Rothberg said his company's agreement is similar to those that publishers have been striking with Apple for e-books on the iPad.
Amazon did not respond to requests for comment.
With Apple's pricing model, some e-books will cost up to $14.99 initially — $5 more than Amazon charges for some popular e-books — and Apple is insisting that publishers can't sell books at a lower price through a competitor.
Apple's iBookstore is launching with titles from major publishers such as Penguin, Simon & Schuster, HarperCollins, Hachette Book Group and Macmillan. One big publisher, Random House, has not yet struck a deal with Apple.
Publishers' relationships with Amazon, which initially released the Kindle in 2007, have been strained by Amazon's insistence on charging $9.99 for some best-selling titles. Publishers have complained that it is an attempt to get consumers used to unsustainably low prices. The publishers fear that Amazon will force publishers to lower their wholesale prices, cutting into their profits.
One of the most recent signs of frustration came in a letter sent to agents Thursday from David Shanks, CEO of Pearson PLC-owned Penguin Group. Shanks said the publisher's most recently released e-books are not available for sale through Amazon as the companies work to come up with a new pricing agreement in the U.S. E-books released before Thursday continue to be available on Amazon, he said.
Amazon shares fell $3.05 to $132.72 in afternoon trading, while Apple shares rose $1.16 to $236.16.
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