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In recent days a head-on collision between Amazon.com and Macmillan has mesmerized the publishing world and sent storms of e-mails and tweets flying. Those in the biz are aware of the matter, but not everyone in our audience may be. We mentioned Amazon The Giant two days ago and e-books yesterday—just as the conflict was nearing resolution. We wish at least to note the event here—to weave it into our own modest fabric. Here the essence:

Macmillan  Publishing worked out an agreement with Apple, evidently in the period leading up to the introduction of the iPad, under which Macmillan would raise its price for e-books from the Amazon-established $9.99 to $15.00 a book. The New York Times reported Macmillan’s rash break-out from the reservation three days ago. Amazon responded by suspending sales of Macmillan publications, electronic and other. Today’s NYT brings news that the uproar is over—but that feelings are still smarting. Amazon has accepted Macmillan’s decision. Macmillan is a large enough factor in publishing so that it could get its way. Some e-books, therefore will now cost more.

Where this whole business is ultimately headed is difficult to say. At present, it seems, the logic favors low pricing if you happen to be the leading seller of the e-book reader, which is where Amazon is at. But we suspect that in the future the razor/razor-blade logic may  prevail.  If so, in the foreseeable future e-readers will be virtually given away but the price of the content will begin to rise above the current bargain-basement level—and the more popular the product, the higher the price.

Other models are also possible. Apple has certainly made hay issuing the same functionality over and over again, to the same customers, with slight improvements, at high prices, ever since it went into business. The reader may follow the same pattern. In that case, a downward pressure on the price of content may be anticipated. Small publishers, we suspect, will favor the razor/razor-blade outcome.


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