On Wednesday, a settlement was reached between retailer Amazon.com and book publisher Penguin regarding electronic book prices. Under the agreement, Penguin will again make its books available through Amazon in the e-book format. Penguin CEO David Shanks affirmed that, "Our differences have been resolved, and a full selection of Penguin books will be available on the Kindle.”
Penguin stopped selling new e-books in April, a move which affected about 150 titles. At the time, Amazon responded by pricing various Penguin hardcover books at a low $9.99. Publishers complained about the effect of the low price on the mindset of book consumers. Companies were concerned that they would be forced to lower their wholesale prices as a result. In January, Amazon removed Macmillan books from its website after the latter attempted to set higher prices for the e-books than the $9.99 price set by Amazon.
A new model for e-book pricing was introduced with the launch of the iPad in April. Under the “agency model,” the e-book seller receives 30 percent of the digital price and the publisher receives 70 percent. The model allowed e-books to be sold through Apple’s iBookstore at prices such as $12.99 and $14.99. Penguin is owned by the London-based company, Pearson. Following the announcement on Wednesday, shares of Pearson rose 6 cents to $13.51, while shares of Amazon dropped 77 cents to $124.09.
This news is from Technology Digital
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