Update | 7:01 p.m. Amazon relents and is selling Macmillan books again.
Update | 2:39 p.m. Adding reporting from Motoko Rich, the Times reporter covering the publishing industry, on Macmillan’s side of the dispute.
As Venture Beat and other blogs have noticed Friday evening, books from Macmillan, one of the largest publishers in the United States, have vanished from Amazon.com.
The question is why.
I’ve talked to a person in the industry with knowledge of the dispute who says the disappearance is the result of a disagreement between Amazon.com and book publishers that has been brewing for the last year. Macmillan, like other publishers, has asked Amazon to raise the price of electronic books from $9.99 to around $15. Amazon is expressing its strong disagreement by temporarily removing Macmillan books, said this person, who did not want to be quoted by name because of the sensitivity of the matter.
Macmillan is one of the publishers signed on to offer books to Apple, as part of its new iBooks store. Its imprints include Farrar, Straus & Giroux, St. Martins Press and Henry Holt. The publisher’s books can still be bought from third parties on the Amazon site.
Apple, as we’ve reported before, will allow publishers more leeway to set their own prices for e-books. It’s not clear yet if publishers can withhold books from Amazon while giving them to other parties like Apple. I’ve spoken to two antitrust lawyers who say it could raise legal issues.
Motoko Rich, my colleague, spoke with a person who had a direct conversation with a person at Macmillan familiar with the conversations with Amazon. Macmillan offered Amazon the opportunity to buy Kindle editions on the same “agency” model as it will sell e-books to Apple for the iPad. Under this model, the publisher sets the consumer book price and takes 70 percent of each sale, leaving 30 percent to the retailer. Macmillan said Amazon could continue to buy e-books under its current wholesale model, paying the publisher 50 percent of the hardcover list price while pricing the e-book at any level Amazon chooses, but that Macmillan would delay those e-book editions by seven months after hardcover release. Amazon’s removal of Macmillan titles on Friday appears to be a direct reaction to that.
Macmillan has not yet returned a request for comment. Amazon refused to comment.