Macmillan need not feel quite so alone in its quarrel with Amazon. A day or two ago Rupert Murdoch cast HarperCollins’s lot with Apple’s “agency” e-book retail model (see Apple Promoting a New (and Radical) Business Model for Selling E-Books?), a structure that threatens Amazon’s hegemony in the e-reader space. Now Hachette has joined the bloc, meaning that half of the so-called Big Six want to recapture control over the timing and pricing of their e-books. Precincts yet to be heard from are Simon & Schuster, Random House and Penguin, but even without them, the forces arrayed under the agency model flag should signal the imminent capitulation of Amazon.

Wait a minute. Amazon did capitulate. They did it so long ago we forgot. (See If This Is Capitulation, What Does Triumph Look Like?)

In any event here is the statement issued to the literary agent community by David Young, Hachette Book Group’s Chairman and CEO.

RC
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Dear Agent -

At Hachette Book Group, we have been considering a new pricing model for some time, and have decided to transition to selling our e-books through an agency model.

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.

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.

Another great benefit to our consumers is that we intend 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.

We believe that this new model is preferable to withholding books, and is in our authors’ and HBG’s best interest. I’m happy to answer individual questions about the agency model, so please don’t hesitate to contact me.

Best,

David Young
Chairman and Chief Executive Officer | Hachette Book Group