An ongoing, sometimes vituperative, debate in book publishing and book selling of late has been the pricing and availability of ebooks versus print books. We haven’t been covering the debate on SFScope because it’s too wide-ranging, not specific to the sf/f/h fields, and still a topic of debate with nothing decided any which way. However, the latest skirmish does affect our field, and (to a very minor degree) SFScope directly.
Amazon.com has been quite emphatic about its opinions of ebook pricing, specifically limiting ebook prices to no more than $9.99. In part, their theories are reflective of their vocal customers, and in part, they’re looking to the future, to securing their ever-increasing market share. But publishers, too, are recognizing that ebooks will be a significant part of their business revenue stream in the coming years, and are starting to stand up to Amazon, specifically thinking that the $9.99 ceiling on ebook pricing will undervalues the products and will cannibalize print books sales. In response to Amazon’s pricing demands, several publishers have announced delayed release dates for ebooks (as paperbacks are released after their hardcovers).
On Thursday, Macmillan CEO John Sargent had a meeting with Amazon to discuss the publisher’s planned “agency model” of ebook pricing. Under that model, Macmillan will sell their ebooks to consumers through retailers, who will be acting as Macmillan’s agents, and will take 30% commissions on the sales. Amazon disagrees, expecting to price ebooks as they do print books: at whatever price they want, regardless of profit or loss, and regardless of the publisher’s expectation.
Following that meeting, Amazon removed the “buy button” for all Macmillan books, making them available only through third-party resellers. Amazon also removed all Macmillan books from their Kindle offerings, and from Amazon customers’ wish lists.
Publishers Lunch notes that several Macmillan bestsellers maintain high (though falling) sales rankings on Amazon, while at the same time, they’ve seen those rankings rise on BarnesandNoble.com.
PL then quotes agent Robert Gottlieb (Trident Media Group): “The agents I know feel the $9.99 price for new releases is not good for the business. They want the publishers to work with all the retailers in a peaceful manner. I don’t think it is in any book retailer’s interest both short and long term not to do business with companies like Macmillan and at the same time Macmillan needs Amazon. What will Amazon do if S&S moves in this direction or Hachette? If consumers can’t get the books they want from Amazon they will move to other retail sites for what they want.”
While Amazon was unwilling to comment on the situation, Sargent issued a letter detailing the publisher’s point of view. We’re reprinting the letter below.
Macmillan’s imprints include mega-sf publisher Tor/Forge. SFScope is currently an Amazon Associate.

To: All Macmillan authors/illustrators and the literary agent community
From: John Sargent
This past Thursday I met with Amazon in Seattle. I gave them our proposal for new terms of sale for e books under the agency model which will become effective in early March. In addition, I told them they could stay with their old terms of sale, but that this would involve extensive and deep windowing of titles. By the time I arrived back in New York late yesterday afternoon they informed me that they were taking all our books off the Kindle site, and off Amazon. The books will continue to be available on Amazon.com through third parties.
I regret that we have reached this impasse. Amazon has been a valuable customer for a long time, and it is my great hope that they will continue to be in the very near future. They have been a great innovator in our industry, and I suspect they will continue to be for decades to come.
It is those decades that concern me now, as I am sure they concern you. In the ink-on-paper world we sell books to retailers far and wide on a business model that provides a level playing field, and allows all retailers the possibility of selling books profitably. Looking to the future and to a growing digital business, we need to establish the same sort of business model, one that encourages new devices and new stores. One that encourages healthy competition. One that is stable and rational. It also needs to insure that intellectual property can be widely available digitally at a price that is both fair to the consumer and allows those who create it and publish it to be fairly compensated.
Under the agency model, we will sell the digital editions of our books to consumers through our retailers. Our retailers will act as our agents and will take a 30% commission (the standard split today for many digital media businesses). The price will be set for each book individually. Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99. At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99. E books will almost always appear day on date with the physical edition. Pricing will be dynamic over time.
The agency model would allow Amazon to make more money selling our books, not less. We would make less money in our dealings with Amazon under the new model. Our disagreement is not about short-term profitability but rather about the long-term viability and stability of the digital book market.
Amazon and Macmillan both want a healthy and vibrant future for books. We clearly do not agree on how to get there. Meanwhile, the action they chose to take last night clearly defines the importance they attribute to their view. We hold our view equally strongly. I hope you agree with us.
You are a vast and wonderful crew. It is impossible to reach you all in the very limited timeframe we are working under, so I have sent this message in unorthodox form. I hope it reaches you all, and quickly. Monday morning I will fully brief all of our editors, and they will be able to answer your questions. I hope to speak to many of you over the coming days.
Thanks for all the support you have shown in the last few hours; it is much appreciated.
All best,
John