If you're looking for an old favorite or a lost “gem,” many long out-of-print titles by popular authors are finally available again. Every week, we feature a handful of titles from the hundreds on our site. Be sure to check out the latest featured titles!
John Sargent, admiral of the Macmillan fleet, has charted the course of his company to meet the challenges of modern publishing, traditional and digital. In a memo to Macmillan authors, their agents, and readers, Sargent spelled out a host of initiatives and policies. "It has become clear to me," he says, "that there is far too little accurate information available in this time of unprecedented change. The issues we all face together are complex, and no news story or 140-character snippet can adequately address them."
Some of the content of his message had been explicitly announced in the last turbulent months, other policies are fully articulated for the first time. You may read the announcement in its entirety here, but in essence:
Starting at the end of March, we will move from the “retail model” of selling e-books (publishers sell to retailers, who then sell to readers at a price that the retailer determines) to the “agency model” (publishers set the price, and retailers take a commission on the sale to readers). We will make this change with all our e-book retailers simultaneously.
All the new adult trade books for which we have the rights to publish in e-book format will be available at the first release of the printed book. We will no longer delay the publication of e-books (read: no windowing).
We will price our e-books at a wide variety of prices. In the ink-on-paper world we publish new books in different formats (hardcover, trade paperback, and mass market paperback) at prices that generally range from $35.00 to $5.99. In the digital world we will price each book individually as we do today. Generally e-book editions of hardcover new releases will be priced between $14.99 and $12.99; a few books will be priced higher and lower. This is a tremendous discount from the price of the printed hardcover books, which generally range from $28.00 to $24.00. E-book editions of New York Times hardcover bestsellers will be priced at $12.99 or lower while they are on the printed list. E-book editions of paperback new releases will be generally priced between $9.99 and $6.99.
For physical books, the majority of new release hardcovers are published in cheaper paperback versions over time. We will mirror this price reduction in the digital world.
There has been a lot of concern from e-book readers that $9.99 books will no longer be available. Most Macmillan e-books will still be priced below ten dollars.
Sargent says he has not addressed illustrated books or books for young children, nor the long-term or author royalty consequences of the change. He will save those and other topics for future posts. But he does state categorically that "these changes will apply to every e-book retailer with whom we do business."
TrueSlant.com blogger Roger Theriault has picked up a story from the MobileRead forums that Random House will go against the recent rush by its Big Six buddies to the "agency" e-book retail model recently introduced by Apple.
Apple's approach is for publishers to retain control over the list price, rather than allowing the list price to be pegged by the e-tailer, as is currently employed by Amazon. It also allows publishers flexibility in timing release of e-books - delaying them rather than releasing them simultaneously with publication of hardcover editions.
Random's decision is based on two approaches to e-book publishing that are at odds with the philosophy of at least three of its fellow publishers. A RH spokesperson voiced the opinion that publishers “have no real experience at setting retail prices.” That explains why Random held back from embracing Apple's iPad tablet. The other reason is timing of e-book releases. “Our current policy is we release e-books at the same time as physical books,” she said. "I haven’t been convinced that it’s good for the author or consumer to delay the release."
You Wanna Turn Us Off Too? Murdoch Voices Harper Opposition to Amazon's $9.99 Cap
Business World reports that HarperCollins owner Rupert Murdoch took a swipe at Amazon's $9.99 e-book price, boosting Macmillan's lonely public stand against the retailer's rigid pricing tactics. "We don't like the Amazon model of selling everything at USD 9.99," he said, calling for a renegotiation of Harper's deal with Amazon, and Amazon said it's ready to hear what he has to say.
Murdoch acknowledged that he stands to lose money by opposing $9.99. "They pay us the wholesale price of USD 14 or whatever we charge," he said, referring to the wholesale price that Amazon might pay to Harper for a $28.00 e-book. "But I think it really devalues books and it hurts all the retailers of the hard cover books." Amazon takes a loss on such transactions but has used the loss-leader strategy to gain a dominant position for its Kindle e-book reader. It's worked so far but publishers have worried that a day of reckoning will come in the form of a demand by Amazon that publishers lower their wholesale prices to accommodate that $9.99 retail price.
Though he didn't refer to Macmillan, Murdoch's position mirrors Macmillan's and clearly indicates that the new e-book retail model introduced by Apple as part of its iPad tablet rollout has united the publishing community. "Apple, in its agreement with us, which has not been disclosed in detail, does allow for a variety of slightly higher prices," Murdoch coyly said.
Publishing's Weekend War: 48 Hours That Changed an Industry
The facedown lasted from Friday evening to Sunday afternoon but when it was over the landscape of the book business was permanently altered. On Friday, in reaction to Macmillan's refusal to play the Kindle pricing game by Amazon's rules, the retailer punished Macmillan by extinguishing the publisher's Buy buttons on the Amazon website.
Obviously, Amazon hoped this tactic would bring Macmillan to its knees. Instead it triggered another wave of customer outrage as Kindle owners reacted just as they had in 2009 when Amazon reached into their Kindles and recaptured files without notice or explanation. Though the response of the author community was mixed, many authors were angered at becoming victims of a war they scarcely understood but they too blamed Amazon.
Amazon also underestimated the possibility that other major publishers might support Macmillan. This turned out to be a well founded concern. In the past few weeks all of the big houses except Random House conducted discussions, and in all likelihood negotiations, with Apple to forge a new retailing model that would return control of e-book pricing to the publishers, who had become alarmed that Amazon's insistence on a $9.99 price cap would force them to accept lower wholesale terms. Conditions were ripe for mutiny, and on Friday the test of wills began. By Sunday, as Amazon realized that this was a fight it could not win, it capitulated.
I stated that this might well be a turning point for the book industry - both e-book and print - and I stand by that statement.
I also made a prediction that publishers will no longer be able to hold the line on the current 20-25% royalty rate offered to authors. In fact I guaranteed that they won't be able to, and I stand by that guarantee as well. Authors, and more importantly their powerful literary agents, have viewed the new landscape and found it rich with the potential for profit. They perceive the current royalty level as arbitrary and without basis in the economies of e-book production and distribution. The current rates cannot and will not hold. Just as Amazon blinked in its stare-down with Macmillan, Macmillan and its Big Six companions will also blink in the inevitable confrontation with authors.
Guaranteed: E-book Royalties Will Rise When Publishers' Hands Untied
I don't know if people still make pinkie bets, but when I was a kid that's what we called friendly wagers with no money at stake - just the satisfaction of being right. And I'm making a pinkie bet right now: If publishers can untangle themselves from the current e-book pricing model that ties their hands with a $9.99 ceiling, author royalties will rise. Any takers? Warning - before you extend your pinkie, you must know that I never bet on anything I'm not absolutely certain about.
Currently the e-book royalty offered to authors by five of the Big Six is 25% of the publisher's net receipts, and Macmillan's is even lower. Indeed, it's the lowest in Big Publishing: 20%. And because it is, Macmillan has attracted less support from the author community for its facedown of Amazon than it would otherwise receive. Here for instance is a line from a Silicon Valley blogger that called Macmillan "evil": "they're trying to force all ebook vendors to adopt the new contract, while forcing authors to accept a below industry average (20% vs. 25%) on ebook royalties."
If, as a result of negative publicity, Amazon relents on its rigid pricing formula, e-book revenues will increase and it will be so much harder - indeed, it will be intensely embarrassing - for publishers to continue parceling out the mingy royalty they now proffer. How much higher will the royalty go? Publishers will kick and scream over every point they have to give up, but in time someone will blink and go to 50%, and the rest of the industry will follow.
You can bet the house on that, but I'll accept a friendly pinkie.
Richard Curtis (who is happy to disclose that E-Reads pays 50% royalty to its authors, and has paid it from Day One, 2000).
Macmillan Issues New Contract Boilerplate for All Divisions, E-Royalty Lower than RH, S&S, Other Majors
Agents are poring over a new contract boilerplate issued by Macmillan, parent company of St. Martin's, Farrar Straus and Giroux, Henry Holt, Picador, and Tor among others. The contract files were emailed to agents on Monday (October 26th) with a covering note from Macmillan CEO John Sargent (link at bottom of this post).
Sargent highlights key elements in the homogenization of the contract forms, namely: 1) a new across-the-board (all Macmillan divisions) e-book royalty; 2) a new across-the-board direct-to-consumer royalty; and 3) enhanced promotional and Internet marketing initiatives.
The e-book royalty will come as the biggest surprise to e-book royalty watchers, as it goes contrary to the trend (which some think is a polite word for something darker) among major publishers to pay 25% of net e-book receipts to authors. Unfortunately, Macmillan offers even less than that - 20%.
It will be interesting to see if Macmillan will hold the line at an e-book royalty below that of its playmates such as Random House and Simon & Schuster, who in the last year have reduced their e-book royalties to 25% of net receipts. It will be even more interesting to see if the agents fall into the trap of accepting 25% as the "standard" e-book royalty. Who says that's all it should be? (Full disclosure, E-Reads pays 50% of net receipts to its authors, and always has.)
As for direct-to-consumer sales, the new royalty is 10% of net receipts on the first 10,000 copies and 15% thereafter. The standard for as long as anyone can remember has been 5%. That low number was created in an era of mail order of hard copies, a cost-intensive process that was often generated by full color magazine ads, coupons, and other expensive forms of solicitation. This process will now yield to cheaper Web solicitations and streamlined delivery systems.
Buried deep in this change of royalty is the intriguing prospect that Macmillan might be moving toward a more aggressive approach to selling its books direct to consumers, a strategy from which many publishers have shrunk out of fear of upsetting Barnes & Noble and Amazon by competing with them. There is good reason to shrink, as Penguin discovered in April 2008 when Amazon threw an elbow at them over this very issue.
Nevertheless, if Macmillan is any bellwether, publishers may be gearing up for a push on direct-to-consumer sales. The prize? Nothing short of survival. See Direct Sales: Publishing's Last Stand.
John Sargent, admiral of the Macmillan fleet, has charted the course of his company to meet the challenges of modern publishing, traditional and digital. In a memo to Macmillan authors, their agents, and readers, Sargent spelled out a host of initiatives and policies. "It has become clear to me," he says, "that there is far too little accurate information available in this time of unprecedented change. The issues we all face together are complex, and no news story or 140-character snippet can adequately address them."
