Publishers Win a Bout in E-Book Price Fight

from The New York Times

Could book publishers suddenly be in the position of telling Google what to do?

With the impending arrival of digital books on the Apple iPad and feverish negotiations with Amazon.com over e-book prices, publishers have managed to take some control — at least temporarily — of how much consumers pay for their content.

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How e-books are sold — and for how much — has been a crucial topic of debate among publishers and retailers for the last two years, as digital books have taken off. Led by Amazon.com’s Kindle electronic reading device, the e-book market is growing at a fast clip, fueled partly by cheap digital editions. Amazon and several other retailers now offer new releases and best sellers for $9.99, far less than the typical $26 cover price on hardcovers.

Publishers have been fretting that such pricing has devalued books in the minds of consumers and have been looking for ways to regain control of what readers pay. When Apple unveiled its iPad, it said it had agreements with five of the country’s six largest publishers. Under those agreements, publishers would set e-book prices — within limits — so that new releases of most general fiction and nonfiction would sell for $12.99 to $14.99. Apple will act as an agent of the publishers — a set-up known in the publishing world as the agency model — and take a 30 percent cut of each sale, leaving the rest for publishers to split with authors.

In early negotiations, the 63 percent Google had been offering publishers was based on a wholesale model, but executives briefed on the discussions said that Google was now open to talking about an agency model and was also prepared to discuss paying publishers 70 percent of each sale.

Even Amazon has been forced to back off its $9.99 pricing in an agreement with Macmillan, one of the country’s six largest publishers. In a recent dust-up after Macmillan told Amazon it was moving to the 30 percent agency model with higher consumer pricing, Amazon removed direct access to Macmillan’s physical and electronic books from its site for a week. Amazon later surrendered to the publisher’s terms.