In the tug-of-war that is content vs. distribution ahead of the launch of Apple's iPad it appears that book publishers may not have the leverage they expected.
The New York Times, citing anonymous sources, is reporting that Apple is reserving the right to discount e-books to $9.99. Turns out the $12.99 to $14.99 guideline for best sellers is a ceiling target.
The Times reports:
According to at least three people with knowledge of the discussions, who spoke anonymously because of the confidentiality of the talks, Apple inserted provisions requiring publishers to discount e-book prices on best sellers — so that $12.99-to-$14.99 range was merely a ceiling; prices for some titles could be lower, even as low as Amazon’s $9.99. Essentially, Apple wants the flexibility to offer lower prices for the hottest books...
If true, there are a few takeaways:
- Apple doesn't want to be hamstrung in e-book pricing. It will because no customer is going to pay $14.99 for an e-book he can buy on Amazon for $9.99.
- Publishers, which have been talking a good amount of smack and playing hardball with Amazon, may not have the leverage they thought they had.
- Content, which has been alleged to be king for years now, is trumped again by distribution.
Also: Amazon losing the e-book pricing battle: Will content trump distribution?
Apple was seen as a savior to book publishers in pushing a "rational" e-book pricing model compared to what Amazon has implemented, but the reality might be quite different.