Amazon reports: "Macmillan, one of the 'big six' publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.
"We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, 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 customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book. We don't believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative.
"Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!"
The major publishers have set $14.99 as their e-book selling price due in large part... no in ALL part to Apple's iPad. In their current model, Amazon keeps 65% of the profits from each e-book sold. This battle is about profits, power and positioning. The pawns and casualties in the e-book wars remain the authors.
I heard from an author last week regarding a title released by a publishing house. The house had promised a massive marketing campaign for his book but 3 weeks into the campaign they pulled the funding. Now the book sits on book seller tables with no ad buy money and no TV or radio publicity other than what the author generates.
His response: "Thank God I kept the e-book rights. Otherwise I'd never make money off this title." He's sold around 16,000 ebooks from his site.
Moral of the story? Regardless of what the publishing houses, Amazon, Apple, Borders and B&N do, the author needs to retain control of their digital rights. They need to pursue their own iPad and iPhone apps for each book and work with Amazon to cut a better deal for their e-book pricing and share of the profits.