You Wanna Turn Us Off Too? Murdoch Voices Harper Opposition to Amazon's $9.99 Cap

Business World reports that HarperCollins owner Rupert Murdoch took a swipe at Amazon's $9.99 e-book price, boosting Macmillan's lonely public stand against the retailer's rigid pricing tactics. "We don't like the Amazon model of selling everything at USD 9.99," he said, calling for a renegotiation of Harper's deal with Amazon, and Amazon said it's ready to hear what he has to say.

Murdoch acknowledged that he stands to lose money by opposing $9.99. "They pay us the wholesale price of USD 14 or whatever we charge," he said, referring to the wholesale price that Amazon might pay to Harper for a $28.00 e-book. "But I think it really devalues books and it hurts all the retailers of the hard cover books." Amazon takes a loss on such transactions but has used the loss-leader strategy to gain a dominant position for its Kindle e-book reader. It's worked so far but publishers have worried that a day of reckoning will come in the form of a demand by Amazon that publishers lower their wholesale prices to accommodate that $9.99 retail price.

Though he didn't refer to Macmillan, Murdoch's position mirrors Macmillan's and clearly indicates that the new e-book retail model introduced by Apple as part of its iPad tablet rollout has united the publishing community. "Apple, in its agreement with us, which has not been disclosed in detail, does allow for a variety of slightly higher prices," Murdoch coyly said.

For background, read Publishing's Weekend War: 48 Hours that Changed an Industry.

Richard Curtis

(c) Reuters