Brief Summary: Macmillan wanted to raise the price of their ebooks on Amazon to $15 dollars. The impetus for this appears to be the release of the iPad and Apple’s decision to allow more publisher control over pricing than Amazon allows. Amazon de-listed all of Macmillan’s books.
I’m not at all uniquely positioned to comment on this kerfluffle. I’m someone who aspires to writing success (three rejections so far this year!), and someone who reads a lot of books and short stories. I also read a lot of those books in ebook format, and that’s the one category where I’m probably an oddity compared to the rest of the population.
I agree that Amazon should let Macmillan charge whatever they want. I know that Amazon wants to continue to succeed in the ebook industry and that it’s afraid the iPad is going to put a serious dent in their business if cheap books aren’t a selling point anymore.
What Amazon did is very very bad business. Amazon is the biggest, yeah, but that doesn’t mean they can afford to start spitting in the face of publishers.
Now, that’s really all I have to say on Amazon’s actions.
The rest of what I have to say is for the publishers.
You are out of your ever flippin’ minds if you think I’m going to pay more for an ebook than for a paperback. Even if the DRM you love so much was gone from the picture, I wouldn’t pay paperback prices for something that has no paper and has a marginal cost-to-produce of zero. If marginal cost confuses you and you are a publisher or other content producer, plunk down some change and read Chris Anderson’s Free: The Future of a Radical Price. It’s literally the most important book published last year for people trying to make money in the era of the digital economy.
I saw a 1.5K word literature essay for sale recently that cost 52.95 USD to buy. Can you imagine paying that much? It doesn’t matter how much you charge if the price is so high no one is buying. Macmillan and other publishers have a duty to their authors and artists to price their offerings in such a way that people will actually purchase them.
Update: Matt Wallace has some really good points. As usual with Matt, there is a LOT of swearing involved. If you're opposed to swearing, you'll want to skip. But please don't skip if you are a writer who aspires in any serious way to be published.
Update 2: Charles Stross has weighed in on the subject with a lot of new info. Charles is an excellent SF writer, but also a phenomenal thinker and you should be reading his blog already.