Archive for macmillan
Macmillan has announced that they intend on entering the e-Book subscription model business, in an attempt to broaden its distribution channels. CEO John Sargent mentioned that the primary reason they are engaging in the whole Netflix for eBooks concept is because Amazon accounts for 64% of all Macmillan digital sales, and this must change.
Sargent outlined Macmillan’s plans for the future to his stable of authors, illustrators, and Agents “In our search for new routes to market, we have been considering alternative business models including the subscription model. Many of you know that we have long been opposed to subscription. We have always worried that it will erode the perceived value of your books. Though this significant long-term risk remains, we have decided to test subscription in the coming weeks. Several companies offer “pay per read” plans that offer favorable economic terms. We plan to try subscription with backlist books, and mostly with titles that are not well represented at bricks and mortar retail stores. Our job has always been to provide you with the broadest possible distribution, and given the current financial and strategic incentives being offered, we believe the time is right to try this test.”
It is very likely in the next few weeks we will hear about Macmillan signing an e-Book distribution deal with Oyster and Scribd. These are two companies not affiliated with Amazon and engage in the pay per read model, which is what Macmillan is looking for.
Macmillan started a limited US eBook pilot program for libraries at the beginning of 2013. The company only contributed titles at first from their Minotaur imprint to gauge market acceptance to their terms and conditions. The publisher is very satisfied with the amount of capital they are gleaning their established relationships with 3M, Baker & Taylor and Overdrive. This has prompted Macmillan to open up their entire catalog of 15,000 eBooks, including ones that just came out.
Macmillan is one of the those publishers that took ponderous steps to fully accept contributing their eBooks to libraries. They originally started with around 1,000 titles from Minotaur Press and then in October 2013 contributed their vast backlist catalog. This week the company has announced that they will also start selling their frontlist, which is a fancy way of saying any new book that comes out, even bestsellers.
All of the frontlist titles will be available for libraries in the United States to start purchasing in early August. It is important to note that each title is going to cost $60 each, which is well beyond the $9.99 cover price found on Amazon. Once the digital title is bought, it is only good for 52 loans or two years of library ownership.
Alison Lazarus, President, of Macmillan Sales comments: “Librarians have been asking for our frontlist titles for their collections. With more than a year of our current pilot behind us and a better sense of the market, we feel comfortable expanding our offering to our full catalog.”
Libraries are clamoring for the oportonity to offer best sellers for all of their patrons, but the terms and conditions of publishers leave something to be desired. Simon and Schuster mandates that in order for libraries to buy their eBooks, they have to offer a BUY IT NOW button on their website. Macmillan is forcing libraries to pay almost $50 more than the cover price found on Amazon, B&N or Kobo.
When the dust finally settled from the Department of Justice lawsuit against Apple and five of the then-Big Six publishers for illegally colluding to inflate the price of ebooks, essentially bilking consumers out of hundreds of millions of dollars in an effort to grab some more market share away from Amazon, the terms of the judge’s ruling included a caveat. That statement was that Apple could not engage in book discounting under the agency model for at least two years, and then it could only negotiate terms of the so-called “agency model” (in which the publishers set the prices of their books, not the retailer) with one publisher at a time spread out over a period of six months each.
Guess who the first publisher in line is? Hachette.
Yes, Hachette, the company who is in heated, contentious dispute with Amazon, currently isn’t allowed to sell titles through Apple without giving Apple the right to discount as the court ruling from Judge Denise Cote states that Apple cannot engage in agency pricing for a predetermined period of time.
Hachette wants Amazon to have to submit to the no-discount policy of agency model pricing, knowing full well that Apple is legally bound to not enter into that agreement and can therefore discount ebooks all it wants to. Amazon will be held to whatever price Hachette decides to charge, while Apple can set its own prices, including selling titles at a loss.
I’m sorry, I’m confused…who’s the bad guy again?
Interestingly, two other publishers have jumped into the debate. Macmillan and Simon&Schuster have filed court documents contending that the entire situation will work to harm their businesses. Since Apple is filing appeals and has therefore not resolved the issue on when agency model can be reinstated, and since Macmillan and S&S are presumably now at the back of the line of publishers, they cannot institute agency pricing with Apple (and therefore, by common sense, any other retailers) until sometime in late 2017.
Is it any coincidence that Hachette attempted to return to agency pricing with Amazon (and not Apple) at nearly the same time that Apple’s new iOS 8 update will make the iBookstore easier to access from its mobile devices?
While the open letter writing, name calling, and petition signing in the Amazon-Hachette battle continues to rage on, it’s important to remember that the end result of Hachette getting its way will be that Amazon will not be allowed to discount ebooks, and by law Apple will. I seem to recall there was a massive lawsuit because one retailer had too much of an advantage…
From the very beginning of digital lending through libraries and personal consumer shares, publishers have been wary of the implications of ebook lending. Once libraries became convinced to at least experiment in the library realm with their digital titles, artificial barriers were often put in place, such as limits on numbers of checkouts and 300% increases in price over an identical title in print. Libraries have suffered under the weight of trying to offer digital lending to their patrons while still ensuring that bestselling and front list titles make it to their virtual shelves.
Digital content provider OverDrive made a monumental announcement today in saying that Macmillan has made its entire ebook catalog available for the first time for lending through OverDrive’s school library partners. From the initial six hundred-plus titles that the publisher originally offered, Macmillan has now made more than 12,000 ebooks available to school libraries for student lending.
“Macmillan offers a wide collection of children’s and young-adult eBooks perfect for the K-12 audience,” said Karen Estrovich, Director of Collection Development at OverDrive. “We are thrilled that our U.S. and Canadian school partners will now have access to these titles, which are highly popular and often requested.”
Unlike some of the restrictions put on ebook lending, Macmillan has made all of its ebooks available without circulation limits, but still under a very standard one-book-one-user model, meaning schools who wish to stock more than one copy–just as they must do with print editions–must purchase additional licenses. The books are, however, only licensed for a 12-month period.
OverDrive has made major strides in the lending sector by helping publishers not only see the security behind opening up their catalogs to lending, but also to see the actual benefits in terms of consumer engagement and increased sales revenue once a book has been borrowed.
Macmillan and Overdrive reached an agreement earlier in the year to experiment with eBooks into the library system. The deal was select titles from their Minotaur imprint and it looks like all sides were happy with the deal. This has prompted Macmillan to contribute close to 9,000 digital titles for entry into the Overdrive system.
Most of the eBooks available are considered backlist titles, which means they are older and have been around awhile. Still, library patrons will still be able to read stuff by Emily Giffin, Robert Jordan and Janet Evanovich.
These new additions will carry the same terms as current Macmillan titles: 52 checkouts or two years, whichever comes first. Libraries that want to purchase these titles can now do so via the Overdrive Marketplace.
Macmillan warmed up to the idea about having their digital books available for loan in public libraries back in March. They currently have over 1200 books up for grabs via their Minotaur imprint. The publishing company is obviously pleased with the pilot project and has just committed hundreds of new titles from another one of their imprints, Entangled Publishing.
Overdrive, Axis 360 and 3M all do business with Macmillan and will be offering a number of great titles very soon. You will be able to get access to a number of New York Times bestselling novels, including – Wrong Bed, Right Guy by Katee Robert, Seducing Cinderella by Gina L. Maxwell, and The Marriage Bargain by Jennifer Probst, as well all backlist titles since the publisher’s inception in July of 2011.
“Entangled has always been a huge supporter of libraries, and we are excited to be bringing our titles to this important community resource through Macmillan,” says Entangled publisher, Liz Pelletier. “This new program will allow our books to get into hands of millions through the venerable library system and that’s what every publisher and author wants–to have their books discovered and loved by readers.”
After countless hours of legal battle, Macmillan has finally agreed upon a settlement that appeased Judge Denise Cote and the plaintiffs in the lawsuit that alleged five of the Big Six publishers conspired with Apple to fix the prices on ebooks sold through online retailers. While the other defendants have settled as well, Macmillan’s originally proposed settlement is actually now about $6million higher.
Some of the additional costs to the publisher will include legal fees for the plaintiffs in the amount of over $2million, investigation fees of over $3million, and more. A large portion of the settlement will go to refund the consumers for artificially over-inflated ebook costs, payouts which should begin some time this summer.
Macmillan still denies any wrongdoing in the case, which has left critics speculating as to why a company of that size would be willing to settle for this sum. The settlement will also finalize any penalty to the company, and could be a far better deal than what the penalty could cost if the publisher opted to continue the investigation and court proceedings.
Throughout this lengthy process, individuals have weighed in on what this will mean for publishing as a whole. Many have proposed that the settlements the publishers in the case have had to pay out–much of which will again be in the form of compensation to the actual ebook buyers–will be so detrimental that the publishers will have to reduce their operations and not take risks on debut authors until their losses are recovered. On the other hand, others have taken the view that this will finally be the push that brings smaller publishing houses and independent publishers into the forefront; as authors are turned away by some of the Big Six publishers, they may see other publishing opportunities as their keys to book success.
Some of the issues that plague both the publishers and the libraries when it comes to ebook lending are slowly beginning to resolve themselves. As publishers become accustomed to the process and build confidence in the protection of their authors’ works, librarians are excited about the opportunity to offer a growing number of digital titles to their patrons.
3M Library System announced today that it has added 1200 titles from Macmillan’s Minotaur Books imprint to its Cloud Library eBook Lending Service. This is part of Macmillan’s pilot program to allow libraries to access its titles.
“Macmillan’s Minotaur Books imprint has a rich backlist built on best-selling mystery and crime series by the likes of M.C. Beaton, Nevada Barr, and Laurie King,” said Heather McCormack, collection development manager, in a press release. “The pilot offers access to these brand names and more, with the benefit of insight on what has performed best in the consumer market and what will generate the most circulation for Cloud libraries… Macmillan can benefit from our community of engaged collection development librarians who talk up great books – old and new – across social networks.”
While different publishers have had to create their own terms for lending their digital titles, Macmillan’s pilot program allows libraries to purchase the title for 52 checkouts or two years, whichever comes first. All of the titles that they have listed in this program will sell to libraries for $25 each.
Macmillan Publishers announced in September of last year that they were developing the infrastructure to start their library eBook initiative. Libraries all over the USA will be able to borrow Macmillan titles starting this March.
ALA President Maureen Sullivan said in a statement “I am so pleased Macmillan Publishers is beginning to sell e-books to America’s libraries so that we may connect their authors and our readers in the digital age. This is a welcome acknowledgment of our advocacy and the importance of the library market. We have always known that library lending encourages patrons to experiment by sampling new authors, topics and genres. This experimentation stimulates the market for books, with the library serving as a critical de facto discovery, promotion and awareness service for authors and publishers.
She went on to say that “Almost exactly one year ago, the ALA began this conversation with Macmillan CEO John Sargent and his leadership team, and regular communications have continued as the company stated it would launch its pilot last September. While today’s announcement is only a first step, we look forward to the release of more details about the pilot and continuing work together to bring even more Macmillan e-titles to libraries in the future.
Macmillan and Penguin both are now running eBook pilot programs. Many of their front-list titles are not available as both publishers gather data on trends and statistics. Almost all of the eBooks issued by both companies will have mainly backlist titles and seldom have anything new or on any bestseller list.
Update: Macmillan Released a statement just now. The pilot program is set to launch before the end of first quarter in 2013. Under the agency model, and working with multiple distributors, Macmillan will offer over 1,200 backlist eBooks from its Minotaur Books mystery and crime fiction imprint, a part of the St. Martins Publishing Group. The titles cover all sub-categories of crime fiction from thrillers to cozies, hard-boiled crime to psychological suspense and include many award winners. Once purchased by a library, the titles will be available to them to lend for 2 years or 52 lends, whichever comes first. All of the books in the program will have the same digital list price.
The titles will be available through a number of distributors, and at the launch through Baker & Taylor’s Axis 360 Digital Media Library, OverDrive and the 3M Cloud Library.
So says Macmillan Chief Executive John Sargent in an open letter posted on his company’s website. Sargent said that new retailer ebook contracts will allow retailers to discount certain titles priced at $13.99 and above by 10%. As Global Finance points out, those retailers who have settled their antitrust case will allow discounting on all their titles.
Sargent says that Macmillan will continue to fight the Justice Department because, as he says in a post on the Tor website:
There are two reasons we decided not to settle. First, it is hard to settle when you have done nothing wrong. Much as the lawyers explain to me that settling is completely standard business procedure, it still seems fundamentally flawed to me somehow. Call me old-fashioned. The second reason is the more important one. Since the very beginning, the government’s demands have never wavered in all our discussions. They still insist on the two year discounting regime that forms the heart of the agreement signed by the three settling publishers. It was our belief that Amazon would use that entire discount for the two years. That would mean that retailers who felt they needed to match prices with Amazon would have no revenue from e-books from five of the big publishers (and possibly the sixth) for two years. Not no profit, no revenue. For two years. We felt that few retailers could survive this or would choose to survive this. Simultaneous discounting across the major publishers (you could think of it as government-mandated collusive pricing) would lead to an unhealthy marketplace. As we heard of each successive publisher settling, the need to support retailers, both digital and bricks and mortar, became more important.
Of course, part of this makes no sense at all. Sargent conveniently omits mention of the fact that before Agency Pricing was put into effect, Amazon was free to discount as much, or as little, as it liked. This did not result in the death of ebook retailers. It’s brick and mortar retailers who are in trouble and discounting isn’t the thing that is causing this. Sargent, and most of the industry, doesn’t understand that the overwhelming convenience factor of online ebook purchasing is what is causing the problem for booksellers. Why go to the store to buy a book when you can get it from your couch? The difference in price of a dollar or two is not going to make much difference when this convenience factor is so strong.
When the ebook agency pricing model came under fire by the US Justice Department and the European Union, companies began to settle out of court. This allowed new agreements to be struck, where online resellers such as Amazon, Barnes and Noble, and Kobo could once again have massive flexibility in determining the price of a book, rather than the publisher. Macmillan is still fighting it out in court on both sides of the pond, alongside Penguin and Apple. It seems as though Macmillan is warming up to the idea with pricing flexibility and may reach a new agreement with major resellers.
Macmillan is discounting ebooks up to 10% of the list price for selected titles. This is allowing Amazon to sell Victory at Yorktown by Newt Gingrich for $13.49 rather than the list price of $14.99. Many other bestselling and new titles are eligible for the discount, so you will have to hunt around to find bargains.
Ever since the recent popularity of digital reading and e-reader devices took hold of the tech-minded consumers, critics and alarmists have been keeping a watchful eye on the industry. After the initial furor died down and the various factions settled into a comfortable working relationship with digital, insightful companies began to emerge who showed a clear ability to evolve in order to secure a future that adapts to both print and digital.
According to Erin Griffith of PandoDaily, Macmillan is one of those publishers who is bridging its own digital divide, but the publisher is going about it in an interesting way. Rather than try to change its decades-old business model, it has opted to purchase and even fund start-up companies under the Macmillan umbrella that it can lean on, specifically in the realm of digital textbooks.
“Macmillan Publishing has taken an entirely different route altogether. It’s one that, until now, has remained relatively under the radar. The company hired Troy Williams, former CEO of early e-book company Questia Media, which sold to Cengage. Macmillan gave him a chunk of money and incredibly unusual mandate: Build a business that will undermine our own.”
Williams’ job will be to buy up smaller digital media and ebook publishers to help Macmillan in preparation for a paperless academic future. So far, Williams has already negotiated the purchase of Prep-U, iClicker, and EBI. While those three companies did not produce straightforward digital textbooks, they were mainstays in classroom technology, specifically related to evaluation and data collection.
“At the highest levels, everybody thinks it’s where we need to go. But they think it’s 15 to 20 years off,” Williams told PandoDaily. “I think it’s seven to ten. The people at the very top plan to be retired in 20 years so they think they have enough runway.”
One obstacle that smaller companies have faced is being a no-name company in competition with the major academic publishers. By allowing themselves to be brought in under Macmillan’s name, the publishing giant gains leverage in the digital industry and the smaller company can take advantage of Macmillan’s reputation, sales force, and investment dollars.
While this may sound somewhat shark-like in its predatory search for small companies to absorb, Macmillan is proving itself to have avoided the pitfall that many larger publishers are still falling into: the inability to see the future and prepare.