Archive for macmillan
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.
There has been an almost conspicuous lack of comments from the parties involved in the DoJ and class action lawsuits still pending against Apple and some of the Big Six publishers. Obviously, the parties involved cannot simply make outlandish statements while the investigations and court proceedings are still pending, leaving many to wonder what actually took place. Now, Penguin and Macmillan, the two remaining publishers who are going to court to defend themselves against anti-trust violation allegations, have spoken out against Amazon and against the Department of Justice investigation.
“In its papers, Penguin accused Amazon of being ‘predatory’ and a ‘monopolist,’ saying the online retailer’s anti-competitive behaviour was poised to damage the bookselling industry. Penguin added the company was ‘concerned that Amazon’s below-cost pricing strategy for certain new release titles would be detrimental to the long term health of the book industry.’”
In essence, Penguin may appear to be agreeing that it worked together with other publishers to change how ebook pricing was taking place, but that it did so to prevent Amazon from growing into a monopoly.
Macmillan also responded officially:
“[In the absence of] any direct evidence of conspiracy, the government’s complaint is necessarily based entirely on the little circumstantial evidence it was able to locate during its extensive investigation, on which it piles innuendo on top of innuendo, stretches facts and implies actions that did not occur and Macmillan denies unequivocally.”
Macmillan isn’t claiming there’s nothing to the investigation, but it appears rather to be saying that the entire investigation has only turned up a small amount of evidence that has been grown into something more.
Oddly enough, the group who could be speaking out is Random House. It is the sole Big Six publisher that never involved itself in the attacks on Amazon’s pricing, although it has lately been disparaged for its outrageous price increase on ebooks for public libraries. Some articles have even claimed that Random House was mildly harassed for not joining the agency model with Apple and the five other publishers. There could be some valuable insight from this group as to what they were offered or asked.
What began life as a class action lawsuit filed by Seattle-based law firm Hagen Bermans on behalf of consumers quickly became a Department of Justice investigation against Apple and five of the Big Six publishers. The investigation was to determine whether or not those involved had acted illegally when they instituted an “agency pricing” model for ebook sales to retailers. Abroad, several other international entities also began their own investigations into claims that Apple and the publishers made an illegal closed-door agreement to arrange the pricing on ebooks specifically in order to edge out Amazon.
Now, thanks to that investigation, the original class action suit which sought to return some of the $250 million that some estimates claim consumers overpaid may fall by the wayside as three of the publishers involved are working to reach a settlement with all fifty individual state governments. If a settlement is reached with the state governments that would trump the class action suit, by order of the judge on the federal court case, Justice Deborah Cote.
Hagen Bermans is planning to continue the suit against two of the publishers, Macmillan and Penguin Group, as those two are holding out in the case and refusing to settle, as is Apple. It is still estimated that even in the settlements the publishers will pay compensation amounting in the millions, but it would mean that there would be no jury trial which could result in a larger payout.
The American Library Association held its Midwinter conference this week, but the real news to come from that gathering is that the ALA’s key leadership has asked for and gotten a meeting with several major publishers to figure out where eBook lending is going from here. ALA will meet face-to-face with CEOs and executives from Simon&Schuster, Macmillan, and Penguin Group, three publishers who are currently preventing their titles from being part of eBook lending catalogs, although in Penguin’s case the ban applies only to new releases published after November 2011.
Currently, a large number of publishers have prevented or pulled their titles from eBook lending catalogs, the platforms that enable public library patrons to borrow digital editions of books on their own reading-enabled devices. The popularity of eBook borrowing has grown to the point that 3M Library System has even developed its own dedicated e-reader that libraries can purchase in bulk then loan to their patrons who may not have their own devices.
The meeting, slated for January 30th through February 1st, is hopefully going to be a chance for both sides in the issue to fully understand the motivations and the concerns of the other party.
“I don’t think the [library] field understands publishers. You have to realize you are dealing with a low margin industry and these people are terrified, they don’t know what to do. Articulating policies are great but I think we have to also understand where publishers are coming from and develop some models — not just policy, not just message — because just saying you’re bad guys is not going to do it,” said Pat Schuman, a past ALA president and a co-founder of Neal-Schuman Publishers, in an article in Library Journal by Michael Kelley.
There were even concerns that the ALA Midwinter conference might see some organized and heated protests by members in the exhibit hall where these publishers have set up booths, but several spoke about the futility of letting feelings over eBook lending become hostile. However, the ALA conferences are largely supported financially by the presence of publishers, and therefore a negative response to their presence could hurt future conferences.
Regardless of the sentiments behind the approach, conference attendees seemed optimistic about the upcoming talks although still wary of the issue and the outlook for a quick resolution to what many see as simply an unintentional effort to hurt libraries and readers.
The Diesel eBook store has been around since 2004 selling ebooks directly to the public. This was way before eBooks have became very trendy and before they had the great system to process orders they have today. In the past Diesel mainly just sold books through 3rd party type of system, no more. Today Diesel and Macmillan publishing signed a deal so Macmillan books will be directly for sale on the website now.
The Diesel website and Macmillan have been talking about this deal for awhile now and it was only with the advent of Adobe Content Server 4 to handle encryption and orders. Diesel also has developed a new proprietary interface for Macmillan called PubDesk. This is a GUI that Macmillan will access to access its inventory, modify metadata and track analytics on downloads, purchases and views.
Diesels ebook store recently went under a tremendous face-lift in 2010 that introduced social elements, a better search engine and the ever popular ‘Deal of the Day.’ With the addition of video integration and new partnerships with Google and Smashwords, solidified the deal with Macmillan.
Diesel commented on the new deal earlier on today – “We are so thrilled to be working with the prestigious publisher Macmillan directly since they represent many top-notch authors that our customers love to read – authors such as Lora Leigh, Sherrilyn Kenyon, Lisa Kleypas, Robert Jordan, Orson Scott Card, Robert A. Heinlein and Jonathan Franzen, just to name a few.”