The Wall Street Journal is reporting how the new Apple tablet is quickly posing a challenge to publishes and Amazon as to how ebooks will be priced and distributed. Instead of lower prices, Apple is asking for two price point, one at $12.99 and $14.99 for hard-cover best sellers and $9.99 for other titles. Apple would get 30%, and publishers would get the remaining 70%. Amazon typically gives 50% back to the publishers.
As reported in the WSJ article:
"The Apple model would bring in less revenue per title for publishers and authors. Since Apple will take a 30% fee on sales, a $14.99 e-book will generate $10.49 for publishers. That publishers and authors stand to make lower revenue per book sold on the Apple model is one reason some are hesitating about signing up with the tablet.
But there is nevertheless a strong draw: In adopting the Apple model, the balance of power would shift at least partly back to publishers, which regain control of pricing. In setting higher prices, they could provide a level playing field for all e-book retailers. The potential for publishers is that the device may generate greater volume for e-book sales. "The reason why publishers will consider this is to bring in Apple as a major distributor of e-books," said the publishing executive. "The gamble is if Apple comes to the table with their sexy device and their millions of customers, will they dramatically increase the e-book business the way that Kindle did?"
The question remains whether the Apple tablet, due in March, will be a new chance for publishers to regain their foothold in the ebook market.
