By Joseph Galante and Greg Bensinger
April 1 (Bloomberg) -- Amazon.com Inc. and Barnes & Noble Inc., aiming to head off competition from Apple Inc., will give publishers control over pricing for electronic versions of books, according to three publishing executives.
Amazon.com will let publishers set prices, abandoning its practice of charging $9.99 for many new releases and best sellers, said the executives, who asked not to be identified because negotiations aren’t public. Barnes & Noble’s policy change will take effect by April 3, when Apple starts shipping its iPad tablet-style computer, two of the executives said.
Sony Corp., the maker of three digital book readers, said yesterday that several major publishers will set the price of most e-books at $12.99 to $14.99, a shift from retailers deciding the pricing. All three booksellers, which together dominate the electronic-book market, are changing tack to keep from losing customers to the iPad, which lets users read books, browse the Web and view videos.
“It’s not at all a coincidence this is the same weekend the iPad becomes available,” said James McQuivey, an analyst at Forrester Research Inc. in Cambridge, Massachusetts. “It was really the iPad that served as the catalyst”.
Publishers have chafed at Amazon’s policy of offering best- selling e-books at a low fixed price to lure buyers of its Kindle digital book reader. Apple will let publishers set the price of titles and give them 70 percent of the revenue, people familiar with the situation said in February.
Pearson Negotiations
E-books released today by Pearson Plc’s Penguin publishing unit aren’t available on Amazon.com while the companies negotiate a new pricing structure, according to a letter to agents from David Shanks, chief executive officer of the publisher’s U.S. unit.
Drew Herdener, a spokesman for Seattle-based Amazon.com, declined to comment. Mary Ellen Keating, a Barnes & Noble spokeswoman, said in an e-mail the retailer is in discussions with publishers regarding e-book pricing. She declined to provide details.
Tokyo-based Sony said Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH, CBS Corp.’s Simon & Schuster, Lagardere SCA’s Hachette, Penguin and News Corp.’s HarperCollins would decide the price of digital books starting today.
Amazon Market Share
Amazon.com has 90 percent of the U.S. digital-book market, according to Credit Suisse Group AG. Apple and other rivals will cut that market share to about 35 percent by 2015, according to Spencer Wang, a New York-based analyst with Credit Suisse.
HarperCollins spokeswoman Laura Miller said the publisher has reached an agreement with Amazon.com on the pricing. Hachette has reached accords with Amazon.com and Barnes & Noble, said Maja Thomas, senior vice president of digital media for the publisher.
The Wall Street Journal reported yesterday that Amazon.com would let some publishers set their own prices.
--With assistance from Matthew Townsend in New York. Editors: Tom Giles, Jerry Byrd.
Business Week
