iPad continues to irk Amazon, Hachette asks for price change

Last week’s scuffle between Amazon and Macmillan over e-book pricing has other publishers looking for a fight. Hachette, publisher of the wildly popular Twilight books, is the latest to ask Amazon to adopt a price model like that of Apple’s iBookstore.

Major e-book titles from Hachette are sold at a loss for Amazon under their current agreement. Many are priced at $9.99 but Amazon pays Hachette back around $15.00.

Hachette Book Group USA CEO David Young called for a new “agency model” in an email Thursday evening. Pricing details weren’t mentioned but are expected to be similar to that of their deal with Apple’s iBookstore.

Last week Macmillan approached Amazon asking for the same terms that they agreed to with Apple. Each new e-book title would be priced between $12.99 and $14.99 with a 30% cut going to the seller. Amazon was so unhappy with Macmillan’s Apple influenced idea that they removed all print and e-book versions of their titles from the site.

The agency model may look like a stupid move by publishers in raising prices and angering e-reader owners. However, there’s a logic behind their madness and its name is the iPad. Cheap e-books and Amazon’s relentless push for the Kindle helped them capture a major part of the e-reader market and build customer loyalty. Apple’s iPad launch made publishers aware that the Kindle finally had a worthy challenger. Similar e-book price models ensure that titles will be sold at the same price to both Kindle and iPad owners.

David Young hinted at the idea in his email to sellers when he wrote, “The agency relationship will allow us to make more titles available to more consumers on more platforms. This expands the author's reach and readership, which is at the heart of what we do as a publisher.”

Walt Mossberg interviewed Steve Jobs on the day of the iPad launch about Apple’s price structure. He wondered why someone would buy buy a more expensive iBookstore version than Amazon’s $9.99 price for an e-book. Jobs said, “That won’t be the case... uh... the prices will be the same.” With news that Macmillan titles will return to Amazon, would Mr. Jobs like to share some lotto numbers?