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Macmillan, too, returns to agency pricing with Amazon


Laura Hazard Owen's avatarGigaom

Book publisher Macmillan, like Simon & Schuster and Hachette before it, has signed a new contract with Amazon and will return to agency pricing on its ebooks starting in 2015. In a public letter to authors and agents, Macmillan CEO John Sargent also said Amazon’s dominance in the ebook marketplace is a problem and that the publisher will experiment with ebook subscription models as a way to diversify its revenue streams.

Macmillan’s settlement with the Department of Justice in the [company]Apple[/company] ebook pricing case required it (and the four other settling publishers) to allow retailers to offer unlimited discounts on its ebooks for two years. Now the two years are up and publishers are returning to agency pricing agreements with Amazon. Under agency pricing, the publisher sets an ebook’s price and the retailer takes a commission. The negotiations between Amazon and publisher Hachette were highly fraught and public, but Macmillan’s…

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In Amazon/Hachette deal, ebook agency pricing is a winner


Laura Hazard Owen's avatarGigaom

In the deal that Amazon and Hachette Book Group finally reached Thursday after months of bitter negotiations, we don’t really know which side “won,” if one side did. But one survivor — perhaps surprisingly — was agency pricing for ebooks, the practice through which the publisher sets an ebook’s price and the retailer takes a commission.

Hachette said in a letter to authors and agents Thursday:

The new agreement delivers considerable benefits. It gives us full responsibility for the consumer prices of our ebooks. This approach, known as the Agency model, protects the value of our authors’ content, while allowing the publisher to change ebook prices dynamically to maximize sales.

That wasn’t a foregone conclusion. In 2010, [company]Amazon[/company] was vehemently opposed to agency pricing, though it ultimately capitulated. Agency pricing was at the heart of the of the Department of Justice’s lawsuit against Apple and book publishers in 2012, in which…

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