Amazon Strikes Deals with Publishers, Making for Creative Competition
Amazon has had an interesting stance as far as its products and services go, given the past few weeks’ incessant news regarding the coming launch of the Apple iPad. As a competitor and a means of reaching consumers, the race between Amazon and Apple is a unique one. The latest move by Amazon has been regarding the pricing wars it’s been battling with publishers, with Amazon signing a new deal in order to offer at least as many titles as consumers will soon be able to access from their iPads.
Reaching new deals with CBS Corp.’s Simon & Schuster and News Corp.’s HarperCollins Publishers, Amazon has agreed on a new pricing structure for the publishers’ content. Instead of offering best sellers for $9.99, Amazon has conceded to sell titles for $12.99 and $14.99. This should make the publishers happy, as it stands to give them more return on their titles sold through Amazon’s eBook channels.
The pricing also matches that offered by Apple, meaning Amazon can no longer use price as a primary differentiating factor between its eBook store and that offered through iTunes. Dually beneficial for the publishers, as the deals between them and Apple and Amazon are nearly equal. But what about Amazon and Apple themselves?
As the iPad looks to be even more focused on media consumption than many of Apple’s other mobile devices, the makers of other media distribution devices will have to modify their own products in order to compete with the changing face of consumer electronics. For Amazon, its pricing wars and negotiations with content providers has been a major point of distinction as it goes up against Apple for music, movie and book sales.
As Amazon has also been the company primarily able to compete with Apple’s iTunes Store prices, the fact that Amazon has had to step back from its previous pricing structures says a lot about the expectations around the iPad itself. Even as Amazon has its own Kindle device for electronic book purchase, download and reading, the company has also made its store available through Apple products as a mobile application.
Amazon’s iPad app itself has been a matter of discussion, as previews still don’t answer many of the questions that have arisen in terms of its access to Amazon or Apple stores to complete purchases and downloads. For branding, it appears rather important for most products to be all-inclusive. But those days are long gone.
We won’t know for sure how the battle will play out until after the iPad has been released, and Amazon’s been given some time to roll out its iPad app and adjust to the new pricing deals struck with major publishers. But these concessions have highlighted the fact that many companies are being forced to leverage each other as part of their competitive practices. With more function and account overlap, playing to consumer needs has created a new form of business strategy. From marketing to revenue, companies like Amazon and Apple are getting increasingly creative.
