Macmillan CEO: No, we won’t settle with the DOJ in the ebooks case
Macmillan CEO John Sargent sent a letter to authors and agents on Wednesday afternoon, saying that the publisher does not plan to follow Penguin’s lead and settle with the Department of Justice in the ebooks lawsuit. But, Sargent said, Macmillan voluntarily entered new retailer contracts that conform with many of the requirements in the DOJ’s settlement.
Nevertheless, Macmillan has entered new contracts with most ebook retailers “except one whose term was not up yet” (he does not specify which one). Sargent explains the new terms: “All the new contracts are compliant with the government’s requests in their complaint. They contain no most-favored nations clauses and no price limits. They also allow 10 percent discounting on individual books priced at $13.99 and above.” (This was partially reported by Publishers Weekly on Monday.) (Macmillan settled in the European Union “because of many differences in their system and because the discounting change will not materially affect the market there for us.”)
Excerpt of his letter:
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 ebooks 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.
So his beef is that he want B&N, Google, Kobo and Apple to make a profit on selling ebook. Because he feel that if they compete with Amazon in the open market, they won't win because Amazon "would use that entire discount for the two years."
Without the profits from selling ebook, the like of B&N, Google, Kobo and Apple couldn't survive or choose to survive.