Date: Thu, 4 Feb 2010 00:33:09 -0500
Subject: [WSFA] Re: [wsfa-forum] Booksellers and Macmillan and amazon
From: "Elspeth Kovar" <ekovar at panix.com>
To: wsfa-forum at yahoogroups.com
Cc: "WSFA members" <wsfalist at keithlynch.net>
Reply-To: WSFA members <WSFAlist at KeithLynch.net>

Next up, front and center on the Tor site and in Publisher's weekly. Cleanly
written, gives the what and why the proposal, and while certainly from the Macmillan
point of view doesn't say anything against Amazon.  John Sargent, head of Macmillan,
put his own name on it and took responsibility for it.

    To: All Macmillan authors/illustrators and the literary agent community
    From: John Sargent
    Re: Missing books on Amazon.com

    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 winnowing of titles. By the
time I arrived back in New York late yesterday [Friday] 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