Macmillan and Amazon Make a Deal

Shelf Awareness

Following recent Hachette and Simon & Schuster deals, Macmillan has concluded a multiyear sales agreement, effective January 5, with Amazon that will use the agency model for e-books. As with the other publishers, Macmillan will control pricing but will receive "a financial incentive" when it offers lower prices, Amazon told the Wall Street Journal.

In an open letter to "authors, illustrators and agents," Macmillan CEO John Sargent said that the company will use the agency plan for e-books for all accounts except Apple. (The Justice Department is requiring publishers to allow Apple to discount titles--in Macmillan's case, until October 5, 2017. Macmillan and Simon & Schuster are appealing this requirement.) In a reference to Apple's role five years ago in wanting publishers to use the agency model--which led to the Justice Department action--he said, "Irony prospers in the digital age."

Sargent emphasized that, as he put it, the agreement doesn't address "one of the big problems in the digital marketplace. Through great innovation and prodigious amounts of risk and hard work, Amazon holds a 64% market share of Macmillan's e-book business. As publishers, authors, illustrators, and agents, we need broader channels to reach our readers."

As a result, Sargent said the company is reconsidering its longtime opposition to the subscription model, which Macmillan has worried "will erode the perceived value of your books." Beginning in the next few weeks, Macmillan is testing subscription sales through several companies that offer "pay per read" plans using backlist titles, "mostly with titles that are not well represented at bricks and mortar retail stores."