According to the NYT's Bits blog, Amazon has pulled Macmillan e-books due to a dispute over pricing, with Amazon wanting to hold the line at $9.99 and Macmillan wanting to raise it to an Apple iPad iBooks-like $14.99.
Eerily similar to Apple and iTunes Music, where Steve Jobs resisted the music industries desire to raise prices from $0.99 a song, and finally came to an agreement for flexible pricing up to $1.29 in exchange for DRM-free 3G downloads in January 2009. Previous to the change, Amazon was able to use music industry dissatisfaction to offer DRM-free Amazon MP3 music at $0.89. The industry was willing to take the loss in an attempt to break Apple's control, and now it looks like their hoping similar pressure and competition from Apple's iBooks will break down Amazon.
Ironic, poetic? Here's where it stands:
Macmillan offered Amazon the opportunity to buy Kindle editions on the same “agency” model as it will sell e-books to Apple for the iPad. Under this model, the publisher sets the consumer book price and takes 70 percent of each sale, leaving 30 percent to the retailer. Macmillan said Amazon could continue to buy e-books under its current wholesale model, paying the publisher 50 percent of the hardcover list price while pricing the e-book at any level Amazon chooses, but that Macmillan would delay those e-book editions by seven months after hardcover release. Amazon’s removal of Macmillan titles on Friday appears to be a direct reaction to that.
And here we thought when there was competition, prices were supposed to go down...
[Note: Amazon has merely stopped selling the e-books for now, they haven't remote-wiped any that were already purchased, the above graphic is entirely satirical!]