E-Book Price War: Apple vs. Amazon

Apple didn’t want to play the price game with Amazon when it entered into the e-book business two-and-a-half years ago. Now that both companies have the power to discount HarperCollins e-books, Apple is more than willing to play the game, according to PaidContent.

For instance, Judgement Call by J.A. Jance has a list price of $14.99 and Apple is now discounting it to $9.99. It isn’t the only book Apple discounted.

Two can play at that game. Until mid-afternoon yesterday, Amazon had discounted the book to $10.94. Several hours after Apple made the price change, Amazon moved to match and now the book is selling at both retailers for $9.99. Touché.

Essential reading on the new HarperCollins pricing from Publishers Lunch. Exclusive on Digital Book World: Barnes & Noble has started discounting HarperCollins e-books despite having no new contract in place.

 

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Related: Learn About the Future of E-Book Marketing

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Revolutionary E-Book (L.A. Times)
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One thought on “E-Book Price War: Apple vs. Amazon

  1. Al Norman

    Jeremy,

    We aren’t seeing a true discount war. In reality, all that is happening is Apple’s current contract is still in force, and it allows Apple to discount at no risk of loss–since it takes a 30% cut no matter the price.

    Apple can discount to price match because of the most-favored nation clause. What made Laura, the author of the PC article, think that Apple is now discounting unilaterally is based on the book Amazon priced at 10.94, then Apple dropped to 9.99.

    However, this is easy to explain. Apple has a business model of everything ending in .99. It does not deviate from this model, and it surely contracted that all price matches, whereby the competitor price did not end in .99, would allow Apple to drop to the next .99 price, else the MFN clause was useless (Apple would be at a higher price if it took the 10.94 book to 10.99, so it was able to drop to 9.99 under its contract).

    There is no real price war–yet. And since the seven day period has yet to pass–before Apple must tear up its old contract–I find it hard to believe they’d do such a thing when their current contract allows them to them take no risk of losses. This truly is a situation where “nothing to see here” is correct.

    If Apple doesn’t file for an emergency stay, or the Kohn request for injunction is denied, this topic should be reexamined next week.

    Reply

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