Rupert Murdoch: “Amazon pricing devalues books”

Rupert Murdoch has voiced his displeasure at Amazon’s pricing policy on eBooks, hinting that HarperCollins may follow Macmillan’s lead and demand higher prices.

Rupert Murdoch:

Murdoch claimed that HarperCollins would look to renegotiate its deal with Amazon, and that the retail giant was “ready to sit down with us again” after losing its stand off with MacMillan.

“We don’t like the Amazon model of selling everything at $9.99,” Murdoch said on a conference call with analysts. “They pay us the wholesale price of $14, or whatever we charge. But I think it really devalues books and it hurts all the retailers of the hard cover books.”

Amazon did not immediately respond to request for comment.

Apple does allow for a variety of slightly higher prices

If Murdoch’s HarperCollins manages to work out a new deal, it would deal a major, and perhaps final, blow to Amazon’s current pricing. Just days ago, the world’s largest online retailer bowed to pressure from another major publisher, Macmillan, which insisted on charging $12.99 to $14.99 for its books.

Book pricing has been key to pushing growth of Kindle eReader since its launch in 2007, since cheap eBooks help consumers justify the cost of purchasing the device. It has also put Amazon at odds with publishers, however, who say that the low prices will cannibalise sales of higher-priced hardback copies.

Fresh competition from Apple – which is rolling out the iPad – has only cast more attention on pricing. Publishers are more anxious than ever to protect their profit margins, and now have some leverage in negotiating against Amazon.

Murdoch, while keeping mum on the exact deal with Apple, suggested the terms of are more favorable to HarperCollins than Amazon’s.

“Apple, in its agreement with us, which is not been disclosed in detail, does allow for a variety of slightly higher prices,” he said.

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