In response to this battle Amazon announced recently that they would change the publisher/retailer split on eBooks from 50/50 to 70/30 in favor of the publisher. This was widely seen as a move brought on by the imminent announcement of the iPad and speculation surrounding eBooks on iTunes (which turned out to be iBook). But it’s more complex than that. With the large number of eReaders coming on the market, along with the iPad and other tablets, plus the growing number of places to easily buy eBooks that aren’t locked in to one device, Amazon’s challengers are numerous. The main weapon they’ve got is price.
The new revenue split is aimed at bringing down Kindle book prices and will “drag everyone else’s rates down” according to Lassen. “[This] will allow publishers to have lower prices across the board, while still being able to cover their investment and overhead.” However, it seems that Macmillan’s plans aren’t for downward prices. The letter in Publisher’s Lunch states that “At first release, concurrent with a hardcover, most [eBook] titles will be priced between $14.99 and $12.99.” Sargent did say that the overall range would be $14.99 to $5.99 and that “Pricing will be dynamic over time.”