Ars technica

On Thursday, Macmillan CEO John Sargent met with Amazon representatives to discuss the pricing of the publisher’s titles on the Kindle e-book reader. Negotiations didn’t go so well, with Sargent wanting to exercise absolute control over the prices of e-books sold through Amazon. According to the New York Times’ sources, Macmillan wanted Amazon to raise prices from $9.99 to $15.

Since launching the Kindle, Amazon has kept the price of best-sellers steady at $9.99, reportedly taking a loss on each title in order to make content for its e-book reader more attractive and drive hardware sales. That hasn’t gone over too well with some publishers, but the dispute with Macmillan is the first one to carry over from the boardroom into public.

In an advertisement (via Silicon Alley Insider) that ran Saturday in Publishers Lunch, Sargent gave his company’s side of the story. He says that Macmillan would make less money under a new distribution model that it will be using with other retailers (including Apple) beginning in March. Called the agency model, it has Amazon and other retailers taking a 30 percent commission on all sales, but with the publisher setting the price on each title. New releases would retail for between $12.99 and $14.99, while older titles would be as cheap as $5.99. Amazon would prefer to go with a one-price-fits-all model.