Apple May Discount Best Selling iBooks to $9.99?
So after all that pushing by publishers for the 70/30 split "agency model", and bullying of Amazon into raising eBook best-seller prices to $14.99, the New York Times is now reporting that Apple may be allowed to discount the price of those same bestsellers to $9.99 -- the original Amazon price.
Yeah, we're confused too. Amazon used to lose money selling aBooks at $9.99 because the publishers got paid the same amount regardless of price or discounts. Under the new "agency model" and 70/30 split, the publishers get less money, 70%. What they wanted, however, was a higher sticker price for consumers whether or not they lost some money on it. See, it was all about the "perceived value" of eBooks. They don't want us to think eBooks are cheap, and they'll take less money to charge us more. Apple, wanting to compete with Amazon (and liking the consistent 70/30 model they already use in the iTunes and App Stores) agreed to the deal with the launch of the iPad and the iBooks app. Big publishers then started pressuring Amazon to do likewise.
Which brings us -- again still confused -- to the New York Times story:
according to at least three people with knowledge of the discussions, who spoke anonymously because of the confidentiality of the talks, Apple inserted provisions requiring publishers to discount e-book prices on best sellers — so that $12.99-to-$14.99 range was merely a ceiling; prices for some titles could be lower, even as low as Amazon’s $9.99. Essentially, Apple wants the flexibility to offer lower prices for the hottest books, those on one of the New York Times best-seller lists, which are heavily discounted in bookstores and on rival retail sites. So, for example, a book that started at $14.99 would drop to $12.99 or less once it hit the best-seller lists.
So did Apple give publishers everything they thought they wanted, and somehow still keep the ability to charge $9.99 for bestsellers? And if our heads are throbbing from all this, is Amazon CEO, Jeff Bezos' near ready to 'splode?