You know when you meet a cute kitten, all fluffy, innocent and sweet…and when you stroke it it sinks four sharp teeth into your thumb? The sheer surprise of that is about the same as what Amazon’s just done to Penguin books over pricing.
The Wall Street Journal has the full story, but it simplifies down very nicely to just two words: E-book sales. As part of the ongoing (if slightly forgotten) scrap over who tells who what price to sell e-books at, Amazon has just started to sell a number of brand new Penguin hardcover titles at a knock-down price of $9.99. Penguin sees this as undervaluing its brand, Amazon sees it as a leverage tool.
But what exactly are these two giants of the book world fighting over? It’s about how Amazon should price Penguin e-books. Amazon and Penguin have yet to thrash out a deal around the new agency model that’s more or less been forced on Amazon by Apple and the traditional publishing world, and it’s the only one of the big five publishing houses that’ve arranged a similar publishing deal with Apple that hasn’t settled on an agreement yet with Amazon. Since there’s no deal, since April 1 Amazon’s not been permitted to sell any Penguin e-books.
Clearly Amazon is piqued, and though we know not over exactly what, we can have a guess: It’s to do with the precise level of pricing and who takes what share of the cash. Presumably Penguin is holding out for higher prices or higher percentages than Amazon is comfortable with.
Who loses out? Die-hard Amazon shoppers, in the main, since Penguin’s e-titles are available through both Apple’s iBooks store for the iPad, and for Barnes and Noble’s Nook. And all this tiff really serves to illustrate is that the publishing world is in turmoil, thanks to the arrival of e-books. And if consumers buy into an e-reader platform that only supports one digital bookstore, then they might find themselves in tricky positions until the various business shenanigans have wound down to a conclusion.