Macmillan Sets Its Course into the Digital Future

John Sargent, admiral of the Macmillan fleet, has charted the course of his company to meet the challenges of modern publishing, traditional and digital. In a memo to Macmillan authors, their agents, and readers, Sargent spelled out a host of initiatives and policies. "It has become clear to me," he says, "that there is far too little accurate information available in this time of unprecedented change. The issues we all face together are complex, and no news story or 140-character snippet can adequately address them."

Some of the content of his message had been explicitly announced in the last turbulent months, other policies are fully articulated for the first time. You may read the announcement in its entirety here, but in essence:

• Starting at the end of March, we will move from the “retail model” of selling e-books (publishers sell to retailers, who then sell to readers at a price that the retailer determines) to the “agency model” (publishers set the price, and retailers take a commission on the sale to readers). We will make this change with all our e-book retailers simultaneously.
• All the new adult trade books for which we have the rights to publish in e-book format will be available at the first release of the printed book. We will no longer delay the publication of e-books (read: no windowing).
• We will price our e-books at a wide variety of prices. In the ink-on-paper world we publish new books in different formats (hardcover, trade paperback, and mass market paperback) at prices that generally range from $35.00 to $5.99. In the digital world we will price each book individually as we do today. Generally e-book editions of hardcover new releases will be priced between $14.99 and $12.99; a few books will be priced higher and lower. This is a tremendous discount from the price of the printed hardcover books, which generally range from $28.00 to $24.00. E-book editions of New York Times hardcover bestsellers will be priced at $12.99 or lower while they are on the printed list. E-book editions of paperback new releases will be generally priced between $9.99 and $6.99.
• For physical books, the majority of new release hardcovers are published in cheaper paperback versions over time. We will mirror this price reduction in the digital world.
• There has been a lot of concern from e-book readers that $9.99 books will no longer be available. Most Macmillan e-books will still be priced below ten dollars.
  

Sargent says he has not addressed illustrated books or books for young children, nor the long-term or author royalty consequences of the change. He will save those and other topics for future posts. But he does state categorically that "these changes will apply to every e-book retailer with whom we do business."

RC