(The story so far: Amazon unilaterally withdrew Macmillan’s catalog from its database over the weekend — about 1/6th of all books currently available, print and digital — because Big Mac wanted to increase prices on Kindle eBook sales.)

Stross posted a good economic analysis of the almost-invisible price war that Amazon and publishing giant Macmillan engaged in over the weekend.

It strikes me from reading this that Amazon and Macmillan both might be vulnerable to market innovation. Anyway, this situation is important to me because every business plan I’ve developed in the last few years relies heavily on Internet content pricing models.

Scalzi talks about the PR aspects of the battle. All of these comments are via BB, or rabbit-hole click-trancing, but in any case through too many links for me to bother listing.

John Sargent, CEO of Macmillan, dropped some gems about Big Mac’s strategy for eBook pricing:

Under the agency model, we will sell the digital editions of our books to consumers through our retailers. Our retailers will act as our agents and will take a 30% commission (the standard split today for many digital media businesses). The price will be set the price [sic] for each book individually. Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99. At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99. E books [sic] will almost always appear day on date [sic] with the physical edition. Pricing will be dynamic over time.

“E book” is bad neospelling and the release model he’s talking about is called “day-and-date”. Stross’ article makes the point that this will allow Big Mac to get a hammer-lock on the price elasticity of demand for their products in a way that has previously been intractable.

In the parlance of my favorite rhetorical analysis newsletter (sample), Macmillan has clearly scored a touchdown off Amazon’s fumble.