Next threat to Amazon's $9.99 books? Rupert Murdoch

Related Topics

Tue Feb 2, 2010 7:15pm EST

* Murdoch says Amazon pricing devalues books

* Amazon now appears ready to talk pricing - Murdoch

* Says Apple deals allow for some higher e-book pricing

By Paul Thomasch

NEW YORK, Feb 2 (Reuters) - Enjoy $9.99 electronic books while you can -- for they soon may be a thing of the past.

News Corp (NWSA.O) Chief Rupert Murdoch, who oversees a media empire than includes HarperCollins books, home to authors like Michael Crichton and Janet Evanovich, made clear on Tuesday his displeasure with the low price Amazon.com Inc (AMZN.O) has set for electronic books.

In order to raise prices, Murdoch wants to renegotiate the current deal with Amazon, and said the world's largest retailer appears "ready to sit down with us again" to talk about new terms.

"We don't like the Amazon model of selling everything at $9.99," Murdoch said when asked about electronic books during a conference call with analysts on Tuesday [ID:nN01228027].

"They pay us the wholesale price of $14 or whatever we charge," he said. "But I think it really devalues books and it hurts all the retailers of the hard cover books."

Amazon did not immediately respond to request for comment.

If Murdoch's HarperCollins manages to work out a new deal, it would deal a major, and perhaps final, blow to Amazon's current pricing. Just days ago, the world's largest online retailer bowed to pressure from another major publisher, Macmillan, which insisted on charging $12.99 to $14.99 for its books [ID:nN31156514].

Book pricing has been key to pushing growth of Kindle e-reader since its launch in 2007, since cheap e-books help consumers justify the cost of purchasing the device. It has also put put Amazon at odds with publishers, however, who say that the low prices will cannibalize sales of higher-priced hardback copies. [ID:nN01112127] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a graphic on Apple and Amazon going head-to-head in the e-reader market, click on link.reuters.com/vat37h ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Fresh competition from Apple Inc (AAPL.O) -- which is rolling out the iPad -- has only cast more attention on pricing. Publishers are more anxious than ever to protect their profit margins, and now have some leverage in negotiating against Amazon.

Murdoch, while keeping mum on the exact deal with Apple, suggested the terms of are more favorable to HarperCollins than Amazon's.

"Apple, in its agreement with us, which is not been disclosed in detail, does allow for a variety of slightly higher prices," he said. (Reporting by Paul Thomasch, editing by Leslie Gevirtz)

Related Quotes and News

Company
Price
Related News
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (2)
TMoore1042 wrote:
I don’t think Mr. Murdoch or any of the other publishers in question understand the difference between a printed book and an ebook. The two are vastly different between formats, delivery and other considerations. Since most readers have already been conditioned by Amazon’s pricing model to expect ebooks to be priced lower than printed books, the notion that they must pay the same price as a print book is already anathema. Most of us minor publishers charge half to one third the price of the printed books for our ebooks because that is what the customers expect to pay. The major publishers will lose in the long run because I have already read comments from readers that they will not buy the print books if the ebooks are offered for the same price. It’s apples and oranges to them, and I wish the majors luck in their effort to win over already dissatisfied customers with this pricing scheme. The genie is already out of the bottle.

Feb 03, 2010 11:43am EST  --  Report as abuse
besmedina wrote:
Amazing that publishers know so little about readers. People that buy digital books, especially Kindle owners are not going to buy hardcovers at any price. Digital editions should be considered an additional distribution channel with negligible overhead. Publishing’s old business model is no longer valid. You are only going to alienate your readership. Even delaying digital distribution has resulted in angry consumers flooding book reviews with bad reviews for books they haven’t read in protest of the publisher. Hopefully it will lead to authors bypassing publishers entirely.

Feb 03, 2010 1:39pm EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.