The Amazon-Macmillan book saga heralds publishing's progress

[Commentary] With a higher price for both the tablet and the books, you wouldn't expect Apple's new model to pose much of a challenge to Amazon's dominance in digital books. But then over the weekend, Macmillan told Amazon that if it didn't agree to the same terms it had hammered out with Apple, Amazon would no longer have access to new books from the publishing house until several months after they were released through bookstores and Apple.

Amazon will go along with the new arrangement. Other publishers are now expected to follow Macmillan's lead. The new arrangement will actually increase the amount of money that Amazon earns on each book, while publishers are likely to earn less.

The higher retail prices will not only slow the transition from hard copy to digital but also open the digital market to more robust competition -- from Apple, and also from Google. Although Amazon is not pleased by the developments, they were hardly surprised. Amazon had already anticipated Apple's entry into the market by inviting software companies to begin developing applications for the Kindle that would allow it to compete directly with the more multifunctional iPad, particularly in the area of video games. And Amazon fired its own shot across the bow of the book publishers last month when it announced that it would make it easier and more lucrative for authors to use Amazon's digital bookstore to sell their work directly to consumers, bypassing the publishers entirely.

Reports of the death of book publishing, like those of music publishing and newspaper publishing, are greatly exaggerated. Business models will change, companies will come and go, and people will lose their jobs. But at the end of the process, there will be fewer people who will be paid higher incomes to produce a wider array of products at lower prices. There's a word for that -- progress -- and it's exciting to see it unfold right in front of us.