Fast Company

Amazon Folds to Macmillan's Wishes, but Really Apple Wins

Amazon and MacMillan

It's a stretch to say that Amazon loves Macmillan books again ... but at least the publisher's books are back in Amazon's online bookstore, and its e-books are available for the Kindle. Who won the fight? Probably Apple, as it turns out.

What's happened, simply, is that Amazon's had to bend to Macmillan's wishes. The publisher is one of the "big six" in the U.S., and as we all know by now, it was concerned that Amazon was undervaluing its books, and was pushing for both an elevated price for its e-books Kindle and a move towards an agency model for its relationship with Amazon instead of a wholesale/supplier system. The word from Macmillan's chief exec John Sargent about the news was simple: "We are delighted to be back in business with Amazon."

Amazon, tellingly, refused to comment to the Wall Street Journal when asked. That's because Amazon's lost the battle, and it's actually significant in terms of the oncoming war with Apple--a war inspired by the iPad's disruptive influence in the e-book market. Following Macmillan's re-jigging of its deal with Amazon, Hachette is reported to be making the same demands, and now that Amazon has caved to Macmillan, you can bet Hachette will be pushing aggressively too. And both companies are also in negotiations with Apple for the iPad.

And you'll read various opinionated thinking on the Web about this, and people will say that it's a bad move from a consumer's point of view--largely because you'll have to pay more for your e-books that you did before, now that Amazon's $9.99 limit has been blown open. Apple's indicated it'll be giving its publisher partners freedom to set book prices inside the iBooks store at different levels, including higher ones towards $20. But this also will let them dynamically price their offerings, including discounting titles as they get older in order to shift more digital copies. So that's actually a good thing for consumers.

Amazon isn't going away either, remember. Apple is going to explode the e-books market, and we can expect more crazy goings-on like this in the future ... but Amazon is too big and too significant a player to just disappear. It'll be selling e-books for years yet, and it'll roll out a Kindle 3 at some point. And if that happens alongside Apple's e-books effort, that ultimately has to be good from a consumer point of view: Nobody wants a market monopolized by a single huge giant.

[Via Wall Street Journal]

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