Amazon gives in to Macmillan on e-book pricing

Ultimately ... we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books, Amazon said in a message to customers on its website.

Amazon said Macmillan told them that they want to charge $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases. Amazon currently charges $9.99 for the e-book version of most new releases and bestsellers.

Amazon temporarily removed all titles published by Macmillan from its website, saying the move would express its strong disagreement and the seriousness of (its) disagreement on pricing. Macmillan titles, including Sarah's Key by Tatiana de Rosnay, were only available for purchase on Amazon's website through third parties on Sunday.

Amazon is facing pressure from publishers concerned about dwindling royalties, as well as new, formidable entrants like Apple Inc that could squeeze what e-booksellers make from each title. Apple unveiled its iPad tablet computer on Wednesday.

The company, along with rivals such as Barnes & Noble Inc and Sony, are jockeying to offer as many titles as possible in their e-bookstores to make their devices the most attractive.

But relations between e-reader sellers and publishers are strained, with publishers still smarting from last year's price war involving low-cost books sold online by Amazon, Wal-Mart Stores Inc and Target Corp.

Analysts say publishers are concerned about the devaluation of the printed book -- specifically how lower retail prices for e-books will affect demand for higher priced hardcover books.

Amazon said it did not believe that all of the major publishers will take the same route as Macmillan.

Earlier this month, in advance of Apple's iPad launch, Amazon said it would offer higher royalties on the discount books sold for the Kindle. Under that limited program, Amazon will pay authors and publishers 70 percent of a book's list price, net of delivery costs. The plan is limited to e-books whose list price is between $2.99 and $9.99.

Company officials were not immediately available for a comment.

According to statistics released by the International Digital Publishing Forum, wholesale revenue from e-book sales in the United States almost tripled in the third quarter of 2009 to $46.5 million from $13.9 million in the same period in 2008.

(Reporting by Ritsuko Ando, editing by Maureen Bavdek and Bernard Orr)