Amazon Strong-arms Macmillan

Posted on Feb 1, 2010 in Books | 4 Comments
I am always shocked and sometimes appalled at how much power booksellers have over the industry. Between Amazon and their refusal to sell a publisher’s book based on price points and Barnes and Noble’s power to reject a book based on it’s cover design, it makes me wonder if booksellers, specifically giant commercial entities like B&N and Amazon have too much power in shaping the industry.
Let this be a reminder to go out into the world and buy books at independent bookstores and directly from publishers. Amazon’s decision to boycott Macmillan titles is taking away from the artists who make books, the employees who run the companies under Macmillan, and the consumer. Here are all of the imprints under Macmillan:
Here’s the original letter from John Sargent, CEO of Macmillan:
January 31, 2010

A Message from Macmillan CEO John Sargent

To: All Macmillan authors/illustrators and the literary agent community
From: John Sargent
Re: Missing books on Amazon.com

This past Thursday I met with Amazon in Seattle. I gave them our proposal for new terms of sale for e books under the agency model which will become effective in early March. In addition, I told them they could stay with their old terms of sale, but that this would involve extensive and deep windowing of titles. By the time I arrived back in New York late yesterday afternoon they informed me that they were taking all our books off the Kindle site, and off Amazon. The books will continue to be available on Amazon.com through third parties.

I regret that we have reached this impasse. Amazon has been a valuable customer for a long time, and it is my great hope that they will continue to be in the very near future. They have been a great innovator in our industry, and I suspect they will continue to be for decades to come.

It is those decades that concern me now, as I am sure they concern you. In the ink-on-paper world we sell books to retailers far and wide on a business model that provides a level playing field, and allows all retailers the possibility of selling books profitably. Looking to the future and to a growing digital business, we need to establish the same sort of business model, one that encourages new devices and new stores. One that encourages healthy competition. One that is stable and rational. It also needs to insure that intellectual property can be widely available digitally at a price that is both fair to the consumer and allows those who create it and publish it to be fairly compensated.

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 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 will almost always appear day on date with the physical edition. Pricing will be dynamic over time.

The agency model would allow Amazon to make more money selling our books, not less. We would make less money in our dealings with Amazon under the new model. Our disagreement is not about short term profitability but rather about the long-term viability and stability of the digital book market.

Amazon and Macmillan both want a healthy and vibrant future for books. We clearly do not agree on how to get there. Meanwhile, the action they chose to take last night clearly defines the importance they attribute to their view. We hold our view equally strongly. I hope you agree with us.

You are a vast and wonderful crew. It is impossible to reach you all in the very limited timeframe we are working under, so I have sent this message in unorthodox form. I hope it reaches you all, and quickly. Monday morning I will fully brief all of our editors, and they will be able to answer your questions. I hope to speak to many of you over the coming days.

Thanks for all the support you have shown in the last few hours; it is much appreciated.

All best, John

Support your independent booksellers.

*****************A friend sent me a link to this article stating that Amazon has removed the freeze from Macmillan books:

In reading the CS article I started to think about e-books and their pricing. Call me old fashioned, but I do not own a Kindle, nor do I plan on buying on anytime soon. But thinking about the costs of production, it does make sense that e-books be priced lower than their paper counterpart. Is this fight then about money, control, technology, or all of the above?

Either way, I’m glad that the freeze has ended.

Back to work.~

4 Comments

  1. Zetta Elliott
    February 1, 2010

    Again, I don’t support bullying but corporate publishers have certainly NOT stood up for many authors of color over the years–and less so as they’ve devoured more and more small presses and imprints. If this deal means authors will get more of the money due to them, I’m thrilled, but I don’t see corporate publishers looking out for my particular interests or the readers in my community. Of course, I should add that my YA novel is coming out on AmazonEncore in a couple of weeks…I think a lot of publishers realize–too late–just how much power Amazon has and how slow they themselves have been to engage in the transformation of the industry.

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  2. Shadra
    February 1, 2010

    I don’t know if I agree that publishers are “just” realizing how much power large corporate booksellers have, but I think that this incident speaks largely to the fact that publishers still want to retain some power and are saying that they won’t be bullied or go down without a fight (if that is indeed the future). Do you think Amazon will be any better if they take over the market? Do you think that all of the issues of race will be solved miraculously because publishing houses have less control or cease to exist? Isn’t Amazon a large corporation too? Is the playing field level there in terms of the people who are working behind the scenes in regards to race and gender?

    Isn’t Amazon just as guilty for devouring small booksellers? And outside of their self publishing system do they really support small presses and imprints?

    The market is changing, no doubt, but there will be a lot of new issues that come with the change and I doubt that issues of race will dissolve. At the end of the day, it is about sales. As for publishers looking out for the community’s interest, I think that will remain left up to the artists themselves. It always has.

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  3. Zetta Elliott
    February 1, 2010

    Well, I think the future’s going to be about *alliances*–and that means individual consumers will have to decide where they’re going to put their money, and artists will have to decide which press has values that most closely match their own–AND they have to be willing to walk when things take a turn for the worse. I don’t think independent booksellers will disappear IF book lovers continue to support them…we have to be careful about making this a cut and dry/black and white situation b/c it’s got a LOT of shades of grey. I can say that AmazonEncore currently has ten new authors and 3 are people of color. Compare that (30%) to the less than 3% of the children’s lit market that goes to black authors under the current corporate publishing system…AmazonEncore books are available online, in stores (small and large), and as e-books, so the consumer has options there. That doesn’t make Encore “the solution,” but it *does* give marginalized authors another option…and there’s still self-publishing and small presses, both of which I’ve tried. I don’t think any one entity will “take over” the publishing industry (and we should work to stop that from happening), but folks will *definitely* be fighting for the biggest share they can get…this is a moment of intense transformation, I think we should call out bad business practices when we see them, and if a boycott seems consistent with your politics, go for it. I’d like to see authors taking more risks, and speaking out about what’s really going on in the industry right now. If we let the big players set the terms, we won’t have much power over how our work lives in the world…

    Back to your question about costs of production–am I wrong in assuming that e-books cost next to nothing for publishers to produce?

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  4. Shadra
    February 1, 2010

    Isn’t that how things operate now?

    I don’t think independent booksellers will disappear in the same way I don’t feel small presses will disappear, and I agree nothing is ever black and white.

    I’m not sure what the cost is to produce an e-book. The man hours are still needed to edit, proof, and design the book. The only thing eliminated is cost of printing, which, yes, is a huge part of the equation. I think most people’s fear is that e-books will phase out hard copy and cut out profits for the houses.

    Since I’m not in the meetings as these things are discussed, I can’t say for sure. I’m curious to see how everything settles.

    Reply

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