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Macmillan Ends Agency Pricing on eBooks

Macmillan, a company that insisted in December 2012 that even they did nothing wrong but were still "complying" with the DOJ settlement, ended Agency pricing today.

Publisher’s Lunch reported this morning that some ebooks published by Macmillan were now showing up in the major ebookstores at a discount:

Agency Lite has formally come to Macmillan titles now, after a longer-than-expected delay. Discounts on ebooks beyond what was previously allowed by the publisher can be seen on some of the company’s bestselling titles, such as Silver Linings Playbook (agency price, $9.99; discounted price $7.99); the Shred diet (agency price, $11.99; discounted price $9.99); and Killing Kennedy (agency price, $12.99; selling price $9.99).

The ebooks are still being listed as being sold by Macmillan, though they no longer indicate that the price was set by the publisher. This change in the pricing comes about 2 months after John Sargent, the CEO of Macmillan, announced that the publisher would settle with the DOJ.

Macmillan was the last holdout of the 5 publishers that conspired with Apple to control ebook prices. All 5 publishers have agreed to the settlement, with 3 (S&S, Hachette, and HarperCollins) settling as soon as they could and Penguin following suit 8 months later in December 2012.

There are still two major publishers that are still using the agency pricing model (Random House and Penguin). The latter has settled with the DOJ but has not yet released their price controls. The former will be giving up agency pricing as the Random Penguin Solutions merger moves forward.

In addition to Random Penguin Solutions, the indie ebook distributor Smashwords also controls ebook prices. I expect they will probably manage to make sure their authors keep control of ebook prices indefinitely. Smashwords is a separate case from the major publishers due to the fact that Smashwords doesn’t actually control the prices of the ebooks they distribute; their authors do. That results in a dispersal much smaller concentration of power which is more responsive to market pressure.



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Jack Heath April 4, 2013 um 6:55 pm

If the goal is "a much smaller concentration of power", then isn’t this bad news? Macmillan’s capitulation has basically handed the market to, which is much, much more powerful. This is bad news for authors, publishers, booksellers, readers and taxpayers.

Full disclosure: Several of my books were published by Pan Macmillan Australia.

Nate Hoffelder April 4, 2013 um 7:03 pm

Maybe you should have finished the sentence:

"more responsive to market pressure"

Amazon is the market pressure. also, I never said the goal was a much smaller concentration of power; I was noting that as one important difference between Smashwords and the major publishers.

fjtorres April 4, 2013 um 7:21 pm

Individual authors controlling the prices of their books is dispersal of market power, not concentration. But since individual authors, unlike the BPHs don’t control vast swaths of content their power will have no illegal impact on the market. Instead, authors using their control of prices to keep them high will find their audience reduced compared to authors that appreciate price elasticity principles.

As for MacMillan, ever since the conspiracy kicked in and I decided to boycott all the price fixers, I discovered I can easily live without them and their books. And every time Sargent and his apologists make annother pronouncement I find that decision easier to live with.

Plenty of other fish in the ocean and at least some of those "fish" offer a modicum of respect for readers instead of trying to squeeze every last drop of blood from each reader.

Nate Hoffelder April 4, 2013 um 7:25 pm

I think I’m going to use your word (dispersal). It’s less confusing, and what I was intending to mean.

fjtorres April 4, 2013 um 8:53 pm

The conspiracy was an attempt to concentrate the publishers' market power to make their price hike stick. That is the reason the DOJ settlement insists the new contracts have staggered expiration dates.

Jonesey April 4, 2013 um 7:48 pm

"5 publishers that conspired with Apple to control ebook prices". Was this ever proven? I don’t think the case was heard yet.

Nate Hoffelder April 4, 2013 um 7:56 pm

They settled. That is an admission of guilt in my book.

Also, can you recall any editorials that argued that they didn’t coordinate their actions with Apple? Never mind the justifications; I’m asking if anyone in publishing wrote a denial.

No one wrote any, and I believe that is because everyone in publishing assumes that the conspiracy happened.

fjtorres April 4, 2013 um 8:58 pm

The publishers' defense was justification and obfuscation, not denial of the facts.
The DOJ charges can be taken as validated by that lack of denial.

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