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

NEW YORK Wed Feb 3, 2010 4:16pm EST

News Corporation Chairman and CEO Rupert Murdoch listens to morning discussion session during the Wall Street Journal CEO Council on ''Rebuilding Global Prosperity'' in Washington, November 17, 2009. REUTERS/Hyungwon Kang

News Corporation Chairman and CEO Rupert Murdoch listens to morning discussion session during the Wall Street Journal CEO Council on ''Rebuilding Global Prosperity'' in Washington, November 17, 2009.

Credit: Reuters/Hyungwon Kang

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

News Corp 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 Inc 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.

"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.

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 Amazon at odds with publishers, however, who say that the low prices will cannibalize sales of higher-priced hardback copies.

Fresh competition from Apple Inc -- 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)

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Comments (16)
ALEZAK wrote:
I have been a big customer of the internet for many years. Mostly for convenience. But there is no such thing as a free lunch. At some point producers and gatherers of information need to be compensated for their service. Just as am sure, especially in this economy, sales taxes will have to paid for retail purchases. The last several years of free info and taxless purchases have introduced people to the concept. Regarding who sets the prices, the customer will eventually determine a value.

Feb 02, 2010 10:13pm EST  --  Report as abuse
Anthonykovic wrote:
Robert Murdoch is just as pathetic as the music recording industry. For far too long these businesses have been parasites on art and knowledge. They charge outrageous prices for their products while claiming that the system of copyright and distribution was “essential” to promoting artist creativity. They have the audacity to charge $40 for a music CD that costs less than a dollar to make, including the artist’s meager royalty. Now Amazaon is charging $9.99 for an electronic book, essentially a PDF file containing text. The cost of producing a text file (ie writing, literature) is dirt cheap compared to the astronomical prices being charged.

Rupert Murdoch would be a nobody without the artists to sponge off. Even at $9,99 for each “electronic book” most of this money goes anywhere but to the authors.

Feb 02, 2010 11:34pm EST  --  Report as abuse
Sleepless wrote:
Murdoch is fornicating dinosaur.

Feb 03, 2010 12:31am EST  --  Report as abuse
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