Another major publisher is siding with Apple’s pricing model over Amazon’s.
Hachette Book Group decided it will use the ‘agency model’ for selling books. This means it keeps 70% of the book sale and Amazon gets 30%.
Publishers are all scared silly of $9.99 books, so this is the route they’re travelling.
In this model, Hachette admits it actually make less money on e-books.
On News Corp.’s earnings call, Rupert Murdoch said the company would be renegotiating its terms with Amazon. He summed up the publisher’s thinking:
We don’t like the Amazon model of selling everything at $9.99. They don’t pay us that. They pay us the full wholesale price of $14 or whatever we charge, but we I think it really devalues books and it hurts all the retailers of the hard cover books. We’re not against electronic books, on the contrary we like them very much indeed it’s low cost to us, and so on but we want to some room to manoeuvre in it and Apple in its agreement with us, which is not been disclosed in detail, does allow for a variety of slight of higher prices. There’ll be prices very much less than the printed copy of books. But still it will not be fixed in the way that Amazon has been doing it. And it appears that Amazon is now ready to sit down with us again and re-negotiate pricing.