Although nothing official has been announced and Macmillan’s titles are still not directly available for sale from Amazon, the dispute over new e-book terms that exploded Friday night appears headed towards resolution in favor of the publisher. Macmillan CEO John Sargent said the two company’s remain in discussions about ending the impasse; no new announcements have come from Amazon, which first signaled a resolution was near with a post Sunday evening from the Kindle team that said ultimately Amazon would capitulate to Macmillan since the company could not afford to not carry Macmillan’s titles, explaining that “Macmillan has a monopoly on its own titles.”
Amazon pulled the titles Friday in protest of the decision by Macmillan to change the terms under which it sells e-books from the traditional wholesale model to the agency model in which retailers receive a commission. Sargent presented the terms to Amazon Thursday, which will raise the price of e-books to between $12.99 and $14.99 for new releases. Macmillan said Amazon could keep the same terms, but releases would be delayed.
While Macmillan is the first publisher to move to an agency model, other large publishers are certain to fall suit. Macmillan, along with Hachette, Simon & Schuster, Penguin and HarperCollins have signed agency deals with Apple to sell e-books through the iPad. Sources at several of those houses said they are moving to an agency model for all of their e-book partners. "It is the only way to go that makes sense to me," said the head of one house.
There was plenty of reaction to the dispute in the blogosphere (and Twitterverse) over the weekend from both industry members and customers. Most agents and authors commended Macmillan for its stance, and some independent booksellers also rallied in support of Macmillan. Authors Tobias Buckell, Charles Stross and others used their blogs to offer detailed analyses of the dispute (including breakdowns of costs and definitions of the supply chain issues) that were generally critical of Amazon for penalizing Macmiilan authors by arbitrarily shutting off sales of their titles. And Fresh off of the finish of the Digital Book World conference, digital publishing consultant Mike Shatzkin weighed in with his own response to the conflict. Consumer reaction on the Amazon forums was much more mixed, with some customers criticizing Macmillan for raising book prices (some even attempting to organze a boycott of titles over $9.99), while other said they would be willing to pay more than $9.99 as long as the e-book was available at the same time as the hardcover.
Amazon's apparent decision to accept Macmillan's terms is a rare victory for publishers in issues dealing with their major accounts. Ever since Amazon joined Barnes & Noble and Borders in comprising the majority of sales for most big houses, the retailers have operated from a position of relative strength, with Amazon in paricular using its position in the e-book market to dictate pricing.
