Macmillan Reaches Ebook Deal With Amazon

Posted on December 23, 2014

MacMillan Publishing has reached a multiyear deal with Amazon.com for the sale of both its printed and ebooks. MacMillan CEO John Sargeant wrote a letter to MacMillan authors, illustrators and agents explaining the terms of the deal.

Macmillan is now the third major publisher to strike a deal with Amazon. Simon & Schuster and Hachette Book Group previously came to terms with Amazon. In his open letter posted on the Macmillan website, Sargent explained why some of the book pricing going forward might jump around a bit. The deal with Amazon begins on January 5, 2015. But because of the settlement with the Justice Department in the ebooks price fixing case, Macmillan must allow Apple unlimited ebook discounting until October 5, 2017 (Macmillan has appealed the ruling on this.)

Amazon and the other retailers that sell Macmillan books will price books using the agency model, while Apple can discount away as it chooses. Sargent explained, "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." He assures authors that their net percentage of the proceeds will not change under the new deal with Amazon. However, he noted that authors will be affected by the changes in prices of the books.

Sargent says he is unhappy with the fact that Amazon sells 64% of all Macmillan ebooks. He then announces plans to expand the market for authors, including the possibility of a subscription ebook model. Macmillan has long been opposed to subscription ebook deals, but he says this time the numbers make more sense. No details are yet available about how this will work.