Amazon.com to capitulate to Macmillan price demand

Jan 31, 2010 - Amazon.com says it will give in to publishing giant Macmillan and agree to sell electronic versions of its books even at prices it considers too high.

New copies of Hilary Mantel's "Wolf Hall," Andrew Young's "The Politician" and other books published by Macmillan were unavailable Saturday on Amazon.com, after the retailer pulled the titles in a surprising reaction to the publisher's new pricing model for e-books.

Amazon wants to tamp down prices as competitors such as Barnes & Noble Inc., Sony Corp. and Apple Inc. line up to challenge its dominant position in the rapidly expanding market. But Macmillan and other publishers have criticized Amazon for charging just $9.99 for best-selling e-books on its Kindle e-reader, a price publishers say is too low and could hurt sales of higher priced hardcovers.

Amazon told customers in a posting on its online Kindle Forum Sunday that it "expressed our strong disagreement" with Macmillan's determination to charge higher prices. Under Macmillan's model, to be put in place in March, e-books will be priced from $12.99 to $14.99 when first released and prices will change over time.

"We want you to know that ultimately, however, we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books," Amazon said in the posting.

Macmillan is one of the world's largest English-language publishers with divisions including St. Martin's Press, Henry Holt & Co. and Farrar, Straus & Giroux.

"We are in discussions with Amazon about how to resolve our differences," Macmillan CEO John Sargent told The Associated Press Sunday. He declined to comment further.

Amazon said other publishers and independent presses might "see this as an opportunity to provide attractively priced e-books as an alternative."

Amazon faces new challengers to the Kindle, including Barnes & Noble's Nook and Sony's e-book reader, plus the upcoming iPad table computer from Apple. The Seattle company sells about six e-books for every 10 paper ones when titles are available in either format. However, the popularity of e-books has driven publishers such as Simon & Schuster and HarperCollins Hachette Book Group USA to say they will delay the release of e-books in order to protect hardcover sales.

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Apple's own approach to iPad e-books could confuse

Jan 31, 2010 - NEW YORK – Even as Apple's iPad will likely energize electronic reading, the new device is undermining a painstakingly constructed effort by the publishing industry to make it possible to move e-books between different electronic readers.

The slim, 1.5-pound "tablet" computer unveiled last week will be linked to Apple Inc.'s first e-book store when it goes on sale in a few months. The books, however, will not be compatible with Amazon.com Inc.'s Kindle or with the major alternative e-book system.

Apple's creation of a third choice is likely to further frustrate and confuse consumers if they accumulate e-books for one device, then try to go back to read them later on a different one. The effect could be akin to having to buy a new set of CDs every time you get a new stereo system. It could also keep people from buying new e-readers as better models come out if they aren't compatible with the books they already have.

This could cool consumers' enthusiasm for e-books, the way sales of digital music downloads were hampered by a variety of copy-protection schemes.

"There are going to be some potentially painful lessons" for consumers when they try to move e-books they already own to new devices, said Nick Bogaty, senior manager of digital publishing business development at Adobe Systems Inc., which provides the major alternative e-book system.

Before the iPad's debut, there have been two main camps in the e-book industry.

The e-books that Amazon sells work only on the Kindle and on Amazon's software, which can be loaded for free on PCs and some smart phones. Everyone else, including Sony Corp., Barnes & Noble Inc. and public libraries, have gathered around Adobe's system.

Adobe doesn't sell books itself, but provides software to booksellers and libraries so they can sell and lend books that can be opened on multiple devices. Like the Kindle store, the Adobe system uses a copy-protection system that prevents buyers from reselling the books or distributing them online.

Apple would not comment about the plans for its bookstore, but Adobe said its system isn't being used by Apple.

Apple already has its own copy-protection system for iTunes and can easily extend that to e-books.

"I don't see Apple feeling like they need to come in as 'the collaborator.' That's not their style," Forrester Research analyst James McQuivey said.

Apple has said it would embrace the EPUB format for its e-books. Although that's the format adopted by the Adobe camp, that alone does not ensure compatibility because Apple would be using its own copy-protection scheme on top of it.

Apple is thus set to create a third technology camp in the e-book industry. Consumers who start buying e-books and want to go back to their books after a few years would have to make sure they have a compatible device, or at least compatible software. That can be pretty complicated.

Even if Apple uses its own copy-protection system, it doesn't preclude books using the Kindle or the Adobe scheme from being read on the iPad or an iPhone as long as Apple continues to allow outside parties to develop e-reading software for the Apple devices. The user would just have to remember which book goes with which software.

However, it's unlikely that books bought from Apple's store would work on non-Apple devices, except for PCs running iTunes.

So far, no media industry has managed to unite on one copy-protection system for downloads. Music retailers, including Apple, used a variety of schemes before ultimately ditching copy protection entirely as customers found the limitations to be a big hassle. Music from iTunes couldn't be moved to a digital media player linked to Microsoft's store, and so forth.

Movies and television shows are still sold and rented with multiple copy-protection systems, though, so you can't move an iTunes video to a Microsoft Zune player.

Forrester's McQuivey believes the division into several e-book camps will persist for years, but may eventually narrow to just two alternatives, one of them being Amazon's.

He doesn't believe copy protection will ever go away for e-books. It died for music largely because CDs were never copy-protected, he noted, so consumers opted to buy them and convert them to digital files instead of buying downloads. Printed books, though they carry no copy protection, are difficult to convert to a digital format in the home.

As the market leader, Amazon has the scale to hold out with its own system, McQuivey said. Analysts estimate it has sold 3 million Kindles, and Amazon says it now sells six Kindle books for every 10 printed copies of books that are available in both formats.

All the same, the publishing industry has high hopes for the iPad, which unlike the Kindle and most other e-readers, will have a color screen that can show video.

Carolyn Reidy, the CEO of Simon & Schuster, said the iPad seems like a "terrific device," citing the clear screen and the ability to turn pages by touching a finger to the screen, as opposed to pushing a button, as the Kindle requires.

She said the fact that Apple already has 125 million customer credit card numbers through its iTunes store could add millions of potential book customers when the iPad goes on sale in two months, starting at $499.

Any disappointment because of confusion over copy protection could be offset, at least in the short term, by the excitement and publicity caused by trendsetter Apple's entry into the e-book market.

The addition of Apple to the e-book market also will likely have an effect on ongoing pricing disputes in the industry.

Amazon.com said Sunday it will give in to publishing giant Macmillan and agree to sell electronic versions of its books even at prices it considers too high. The retailer had pulled Macmillan books Saturday, including e-books for Amazon's Kindle e-reader, in a disagreement over the publisher's new pricing model for e-books.

Amazon wants to tamp down prices as it faces more competitors. But Macmillan and other publishers have criticized Amazon for charging just $9.99 for best-selling e-books on its Kindle e-reader, a price publishers say is too low and could hurt sales of higher-priced hardcovers.

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Last-minute objections filed to Google book settlement

Jan 28, 2010 - WASHINGTON (AFP) – Critics of the revised legal settlement with US authors and publishers that would allow Google to scan and sell millions of books online filed a flurry of last-minute objections on Thursday.

Judge Denny Chin is to hold a hearing on February 18 on Google's vast digital book project and the deadline for filing briefs in the case was Thursday.

Among those submitting objections were online retail giant Amazon, Consumer Watchdog, half-a-dozen French publishing houses, fantasy fiction author Ursula K. Le Guin, the Open Book Alliance and others.

Amazon, which makes the popular Kindle electronic book reader and runs a digital bookstore of its own, said the revised agreement violates anti-trust and copyright law and urged the judge to reject it.

Google in 2008 reached a settlement with the Authors Guild and the Association of American Publishers to a copyright infringement suit they filed against the Mountain View, California company in 2005.

Under the settlement, Google agreed to pay 125 million dollars to resolve outstanding claims and establish an independent "Book Rights Registry," which would provide revenue from sales and advertising to authors and publishers who agree to digitize their books.

Amid objections from France, Germany, the US Justice Department and others, Google and the authors and publishers drafted the modified deal which is before the court.

The revised agreement narrowed the definition of books covered under the settlement to those registered with the US Copyright Office by January 2009 or published in Australia, Britain, Canada or the United States.

The Justice Department has until February 4 to make its views known but the revised deal does not appear to have placated some of its original opponents.

"The proposed settlement threatens to bottleneck the access to and distribution and pricing of the largest, private digital database of books in the world," the Open Book Alliance said.

"Google is focused on becoming the sole owner of an immense digital library that will improve the company's advertising-based search business," it said.

The Open Book Alliance includes Amazon, Microsoft and Yahoo!, the New York Library Association, the Internet Archive, a San Francisco-based non-profit with a digital book-scanning project of its own, and others.

Consumer Watchdog said "the revised settlement suffers from the same fundamental problems as its predecessor."

It said it notably fails to do enough to protect reader privacy, violates copyright laws and gives "unfair competitive advantages to Google."

Best-selling author Le Guin filed a petition signed by more than 365 other writers asking judge Chin to exempt the United States from the settlement -- a move that would effectively torpedo the agreement.

In her petition, she said the settlement was negotiated by the Authors Guild "without consultation with any other group of authors or American authors as a whole."

Last week, the heirs of American author John Steinbeck and folk singer Woody Guthrie dropped their opposition to the settlement, which Google says would make many out-of-print books available online.

"If approved by the court, this settlement stands to unlock access to millions of books in the US while giving authors and publishers new ways to distribute their work," a Google spokesperson told AFP earlier this week.

Among the Authors Guild members supporting the settlement are Wally Lamb, Simon Winchester, Beverly Cleary, Amy Tan, Scott Turow, Garrison Keillor and Elmore Leonard.

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