Hachette Joins Macmillan in Pricing Battle

Hachette Joins Macmillan in Pricing Battle

NEW YORK, NY/AUTHORLINK NEWS/February 5, 2010--In a letter to literary agents yesterday, David Young, CEO of Hachette Book Group, said the publisher, like Macmillan, will transition to a new "agency pricing model" for their e-books. The announcement added clout for publishers in pricing wars against Amazon.com.

In the letter Young said Hachette has been considering the model for some time and has now decided to implement the strategy, thus becoming the second major publisher to move to the new model. Macmillan's titles were removed from Amazon.com last week as a protest against that publisher's demand for better pricing.

The agency model lets publishers set their own pricing and provides a commission (reportedly about 30%)to the retailer rather than the old wholesale discount model that applies to print titles. Until now, retailers have given publishers little control over pricing, but publishers are now fighting back.

Young noted in his letter: "There are many advantages to the agency model, for our authors, retailers, consumers, and publishers. It allows Hachette to make pricing decisions that are rational and reflect the value of our authors’ works. In the long run this will enable Hachette to continue to invest in and nurture authors’ careers – from major blockbusters to new voices. Without this investment in our authors, the diversity of books available to consumers will contract, as will the diversity of retailers, and our literary culture will suffer."

He added that "the agency relationship will allow us to make more titles available to more consumers on more platforms. This expands the author’s reach and readership, which is at the heart of what we do as a publisher. Ultimately, these new terms open doors to all online e-book service providers and create more avenues for delivering e-books to readers."

Hachette intends to release HBG e-books simultaneously with the hardcover (or first format print edition).

"It’s important to note that we are not looking to the agency model as a way to make more money on e-books. In fact, we make less on each e-book sale under the new model; the author will continue to be fairly compensated and our e-book agents will make money on every digital sale. We’re willing to accept lower return for e-book sales as we control the value of our product – books, and content in general. We’re taking the long view on e-book pricing, and this new model helps protect the long term viability of the book marketplace."

He said this new model is preferable to withholding books, and is in authors’ and HBG’s best interest.

Some PUblishers' Sales Looking Up

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Here's what's going on this week in the publishing world. See our news headlines below. Looks like some major publishers had a good first half of the year, while others sagged. You might be interested in borders new Video book Club. See the news link below. Also check out the new skill-building articles in our August edition, and also be sure to visit the site to see our video interview with bestselling author Christopher Reich, and other great columns. Also, don't forget to check out our FREE online classes, one August 16 with Bonnie Hearn Hill, and the other with New York Editor Stacey Barney, coming in September. See www.authorlink.com/classroom/classroom.php for details.

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August 1, 2008

• Art of Fiction
  Crossing Disciplines
  Lisa Lenard Cook
  

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  Lisa Dale Norton

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  Rochelle Jewel Shapiro

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News Headlines
Thursday July 31, 2008
(updated each Thursday)

• Amazon Sales Soar 41%, Barons Warns of Stock Decline

• Penguin Achieves Strong Sales and Profits in First Half of 2008

• McGraw-Hill Income and Profits Decline in Second Quarter

• Hachette USA Shows Rapid Growth in Second Quarter

• Melton to Depart as Vice President of Baker & Taylor

• Borders Debuts New Video Book Club Episode

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Hi Everyone,
Of particular interest to writers in this week’s top headlines is the Authors’ Guild objection to changes in Simon & Schuster’s publishing contract with respect to digital rights. Writers may be well advised to pay special attention to electronic rights when selling rights for their material.

Updated Every Thursday
Last Update: May 24, 2007

• Bertelsmann Strips Down Bookspan Clubs, Cuts Jobs
• Agents Join Guild In Opposing S&S Digital Rights Terms
• Hachette Renames Business Imprint, Teams With UK Unit
• Small Press Center Changes Name, Broadens Scope
• AAP Reports Sales Of Books Totaled $24.2 Billion In 2006
  
  Check Out Authorlink's New Virtual Classroom For Writers

UK REPORT
in alliance with PUBLISHING NEWS
Updated May 24, 2007

• Exploring Digital Foliage: Latest UK Conference Report on Digital Publishing
• Print Firm's Collapse Forces Bath Press To Shut Down
• S&S to Publish Poisoned Russian Litvinenko's Memoir
• Leading UK Indy Publisher Foyles Records Loss

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News Updated Every Thursday Last Update: February 8, 2007

Update NBN, Perseus Vie for PGW, B&T Eyes AMS
AAP Reports Book Sales Stay Steady for 2006
Hachette Parent Entity Lagardere to Expand Digitally
Simon & Schuster Kaplan Publishing Expand Distribution
Amazon.com Fourth Quarter Sales Up 34%
Stockholders OK Reader's Digest Merger Deal
Update on AMS Bankruptcy Case, Levy Potential Buyer?
Authorlink.com NowEnrolling for The Right Wayto Submit a Novel

In Virtual Classroom Also repeating How to WriteA Killer Thriller

UK REPORTin alliance with Publishing News
Updated February 8, 2007 (Go to www.authorlink.com for these stories)

--Publisher Releases Biggest Harry Potter Book Yet
--Report Reveals Clicks or Bricks Buying Habits
--UK Agents Pleased With Hachette Open Market Strategy
--News Corp Reports Income Decline, HCUK Positive

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