john-sargent.jpgJohn Sargent is CEO of Macmillan, itself one of the Big Five publishers, although perhaps lower key and less controversial than the other four. And he penned an end-of-year message to the company’s “Authors, Illustrators, and Agents” which has appeared in full on the blog of Macmillan imprint Tor. It makes for some interesting reading.

Sargent’s choice of date is significant. “Today a portion of our agreement with the Department of Justice (called a consent decree) expires, and we will no longer be required to allow retailers to discount e-books.” In principle, at least. Although, as Sargent explains, the verdict in the Apple ebook price-fixing case gave Apple the right to continue discounting, with various terms allotted to the various publishers in the case, Macmillan’s beig the longest. “This will ensure a muddled and inefficient market until October 5, 2017 when Macmillan’s term (the last publisher) expires,” says Sargent, unless the courts grant an appeal.

Sargent adds that Macmillan now has an agency-model deal on ebooks, “leaving Apple as the only retailer who is allowed unlimited discounting. Irony prospers in the digital age. This odd aberration in the market will cause us to occasionally change the digital list price of your books in what may seem to be random fashion. I ask for your forbearance. We will be attempting to create even pricing as best we can.” Sargent also admits that, “in reaching agreement with Amazon, we have not addressed 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.”

The model Sargent instances is subscription, which he says Macmillan will be testing in the near future. Other publishers have obviously tried different approaches, with HarperCollins’s Narnia portals and Penguin’s Readmill project being but two. Whether any of these, or anything short of a full-on anti-trust investigation, has any chance of breaking Amazon’s armlock on ebook publishing remains to be seen. But what is not in doubt is who set up Amazon in its present position of dominance: The publishers. Macmillan and its peers gave Amazon control of ebook distribution through their own tardy, reluctant moves into the digital space. Irony does indeed prosper in the digital age – where Sargent chooses to acknowledge it, and in many other places as well.


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