Amazon has an axe to grind with Hachette Book Group over e-book prices
Amazon’s battle with Hachette Book Group intensified yesterday after the online retailer called for e-book prices to be lowered well below that of hardback copies to increase sales revenue and consumer uptake.
The Amazon Kindle is the leading ebook reading device
The online retail giant said it would accept a drop to 30 per cent of e-book revenue if publisher Hachette dropped prices on its more expensive titles to a maximum of $9.99 - except in special cases.
Amazon claimed that if e-book prices were decreased by as much as a third, it would see an increase in book revenue as high as 16 per cent, presenting a win-win situation for consumer and distributer.
Hachette is yet to respond to the post news, which coincided with Amazon's announcement about plans to launch a mobile credit card reader.
An Amazon statement said: “With an e-book, there's no printing, no over-printing, no need to forecast, no returns, no lost sales due to out-of-stock, no warehousing costs, no transportation costs, and there is no secondary market and [they] cannot be resold as used books. Ebooks can be and should be less expensive.
“Keep in mind that books compete against mobile games, television, movies, Facebook, blogs, free news sites and more. If we want a healthy reading culture, we have to work hard to be sure books actually are competitive against these other media types, and a big part of that is working hard to make books less expensive.”
The retailer then spoke of further benefits for cheaper titles, based upon its own research: “For every copy an ebook would sell at $14.99, it would sell 1.74 copies if priced at $9.99. If customers would buy 100,000 copies of a particular ebook at $14.99, then customers would buy 174,000 copies of that same ebook at $9.99.
It added that revenue for $14.99 would be $1.5m whereas at $9.99 sales would reach $1.73. To sweeten the deal, Amazon said authors should see 35 per cent of book revenue - as should the publisher.
Amazon and Hachette have been clashing over with their e-book contract ever since Amazon removed a pre-order button from the website in May.
The Authors Guild however said that a large void between ebook and hardback prices would likely reduce overall sales.
This comes after competitor Apple settled with the US government for £400m after being hit with allegations of ebook price fixing, earlier this month.