If you’ve been scoping out books at Amazon over the last couple of days, you may have noticed that a lot of books have suddenly had their “buy now” buttons disappear. That’s because there’s a big fight going on between Amazon and the publishing house of Macmillan, both giants in their respective fields of retail and publishing.

The cause of the tiff? Macmillan wants Amazon to set higher prices – $12.99 to $14.99 – for ebooks versions of bestsellers and hardcover releases in the Amazon Kindle store. Amazon, to their credit, said not only no, but hell no, and pulled the “buy now” buttons for all of its Macmillan titles in protest. That’s got to be putting a huge squeeze on Macmillan and, unfortunately, its authors.

Amazon noted that, unfortunately, in the end they’ll have to capitulate and accept Macmillan’s terms (which, as of today, they have), because they want to continue to offer their titles, and it will be up to consumers to decide if they want to pay these higher prices (from the Amazon Kindle Team announcement). But I still have to hand it to them for at least popping Macmillan in the nose.

There’s a lot that’s going on behind the scenes on this, and the best summary of the shenanigans – and a lot of other great insights for both readers and authors – I’ve seen thus far is on author J.A. Konrath’s blog. But to me this is really the first clear and unequivocal signal that the times, they are a-changing, even if the big publishers like Macmillan want to remain rooted in the past. Why? Because the changes on the horizon, which I think are inevitable in this age of technology, threaten to completely destroy the business model that’s been sustaining them for – literally – centuries.

As a friend of mine once told me, “In dysfunction, there is opportunity,” and the exposure of the dysfunctional business models of traditional publishers offer some great potential opportunities for readers and authors alike, especially when readers are confronted with higher prices and authors with cuts in their royalties.

For readers, you’re going to see a lot more in the way of choices of what to read. The publishing houses are already starting to lose their power to dictate what is published, which in turn dictates what you have available to read. There’s a growing number of independent and small press publishers out there with great stories to tell, and the vast majority of them offer their work at “value” prices. Why? Because the price doesn’t have to support the huge infrastructure of a major publishing house that specializes in printing and distributing paper. On top of that, even when selling at a much lower price, many of these authors make more on each book sold than they would on sales of books through a publisher. Cheap eBooks can be good for both the reader and the author.

For authors, technology like Amazon’s Digital Text Platform and Smashwords allow you to get your work out to the world for free. You’re still responsible for making sure it’s professional grade (proofing, editing, cover art, etc.), but the profit margins are better and you’re in control. Amazon’s royalties are currently 35% of the price you set (although they can set whatever retail price they want), and at Smashwords it’s a whopping 85%, although that venue isn’t nearly as popular (yet). And Amazon is also introducing in June a 70% royalty for authors whose books meet certain criteria, namely prices in the $2.99 to $9.99 range. To me, the jury’s still out on other distribution channels like the Nook by Barnes & Noble and the recently introduced Apple iPad (and Apple is peripherally involved in the brouhaha between Amazon and Macmillan, as Steve Jobs is apparently content with letting the publishers dictate the prices for iBooks), but they’re still part of the wave of technology that is looming on the horizon.

So, keep an eye on the prices in the eBook stores and exercise your power as a consumer: if something costs more than you think it should, don’t buy it. There are lots of other alternatives waiting for you out there.

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