After seeing “breathtaking amount” that the major publisher would have to pay in the worst case courtroom scenario, they decided to settle without admitting any wrongdoing. Here is an excerpt:

I had an old fashioned belief that you should not settle if you have done no wrong. As it turns out, that is indeed old fashioned. Our company is not large enough to risk a worst case judgment. In this action the government accused five publishers and Apple of conspiring to raise prices. As each publisher settled, the remaining defendants became responsible not only for their own treble damages, but also possibly for the treble damages of the settling publishers (minus what they settled for). A few weeks ago I got an estimate of the maximum possible damage figure. I cannot share the breathtaking amount with you, but it was much more than the entire equity of our company. I like to believe that we would win at trial. But outcomes are hard to predict with certainty, particularly in a civil case with a low burden of proof. And so we agreed to settle with no admission of guilt. As with the other settling publishers, retailers will now be able to discount Macmillan e-books for a limited time. This change will take effect quickly.

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He also noted that the company has no plans to merge like Penguin and Random House. Read his complete letter at Tor Books.

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In court documents, DOJ attorneys alleged that Apple and five major publishers engaged in a “substantial” conspiracy as they set up the agency model for eBook pricing–including deleting emails “to avoid leaving a paper trail.”

Macmillan CEO John Sargent has decided to fight the suit. Read his letter here: “Other publishers have chosen to settle. That is their decision to make. We have decided to fight this in court.”

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Check it out: “I am Macmillan’s CEO and I made the decision to move Macmillan to the agency model. After days of thought and worry, I made the decision on January 22nd, 2010 a little after 4:00 AM, on an exercise bike in my basement. It remains the loneliest decision I have ever made, and I see no reason to go back on it now. Other publishers have chosen to settle. That is their decision to make. We have decided to fight this in court.”

The moment will play a crucial role in court soon as the Department of Justice has sued Apple and publishers, alleging that they colluded together to set eBook prices. Sargent disputed these claims in his long letter. We’ve reprinted the entire letter below…

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Fox has released the official trailer for the film adaptation of Mr. Popper’s Penguins. Above, we’ve embedded the full-length trailer.

What do you think? As we previously noted, the film stars Jim Carrey and is directed by Mark Waters. It will hit theaters on June 17th.

Some parts of the film were shot inside New York City’s historic Flatiron Building, home to several Macmillan offices.  (via Shelf Awareness)

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Authors Guild president Scott Turow said that they still hoped to reach an agreement, adding had this statement: “Regardless of the outcome of our discussions with publishers and Google, opening up far greater access to out-of-print books through new technologies that create new markets is an idea whose time has come … Readers want access to these unavailable works, and authors need every market they can get. There has to be a way to make this happen. It’s a top priority for the Authors Guild.”

Google managing counsel Hilary Ware had this statement: “This is clearly disappointing, but we’ll review the Court’s decision and consider our options. Like many others, we believe this agreement has the potential to open-up access to millions of books that are currently hard to find in the US today. Regardless of the outcome, we’ll continue to work to make more of the world’s books discoverable online through Google Books and Google eBooks.”

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Random House spokesperson Stuart Applebaum spoke out this morning: “We are disappointed by Mr. Wylie’s actions, which we dispute. Last night, we sent a letter to Amazon disputing their rights to legally sell these titles, which are subject to active Random House publishing agreements. Upon assessing our business options, we will be taking appropriate action.”

Macmillan CEO John Sargent spoke out this afternoon: “I am appalled, however, that Andrew has chosen to give his list exclusively to a single retailer. A basic tenet of publishing is that our function is to reach as many readers as we can. We disseminate our books and the ideas within them as broadly as possible.”

Other publications also analyzed the news:
New York Times
Publishers Weekly
Teleread
Future Book
A Reading Odyssey

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When Dear Author editor Jane Litte asked about eBook pricing, the CEO wrote back personally: “Hi Jane. The high mass market pricing is a legacy of the old model. Under the agency model trade paperbacks will be $9.99 and lower. Mass markets will probably be at the price of the physical book or lower. We may do some experimenting on price here since digtal will be paperback format agnostic. Some books exsist in both formats…”

Nevertheless, it soon appeared that answering comments could become a full-time job for the CEO. As the responses to his posts climbed past fifty, Sargent typed: “Thanks for the comments. I’ll get back to you as time allows. I’ll also try to gather groups of questions that indicate I have not been clear enough and answer them in my next post.”

What do you think? Read more responses to the post after the jump.

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Here’s an excerpt: “In the ink-on-paper world we publish new books in different formats (hardcover, trade paperback, and mass market paperback) at prices that generally range from $35.00 to $5.99. In the digital world we will price each book individually as we do today. Generally e-book editions of hardcover new releases will be priced between $14.99 and $12.99; a few books will be priced higher and lower. This is a tremendous discount from the price of the printed hardcover books, which generally range from $28.00 to $24.00. E-book editions of New York Times hardcover bestsellers will be priced at $12.99 or lower while they are on the printed list. E-book editions of paperback new releases will be generally priced between $9.99 and $6.99.”

In February, Macmillan engaged in a week-long standoff with Amazon (AMZN) over the future of eBook pricing. The online bookseller temporarily removed buy direct buttons from Macmillan titles. (Via Pablo Defendini)

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The advertisement for Atul Gawande‘s new book, “The Checklist Manifesto: How to Get Things Right,” has a bold phrase at the bottom: “Available at booksellers everywhere except Amazon.” Published by Metropolitan Books, a publisher under the Macmillan umbrella, the book is currently not available for direct sale on Amazon (as of this 1:03 p.m. writing, follow this link to check over the course of the day).

This is the second time Macmillan has used ads in the battle. In a paid advertisement in Publishers Marketplace, Macmillan CEO John Sargent confirmed that Amazon (AMZN) had stopped directly selling books by the publisher. “It is impossible to reach you all in the very limited timeframe we are working under, so I have sent this message in unorthodox form,” he wrote in that advertisement addressed to “Macmillan authors/illustrators and the literary agent community.”

What do you think? Will these advertisements help in the price fight? You can see a larger copy of the ad after the jump. Follow this link for more coverage of the Macmillan and Amazon standoff.

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Earlier today, the Authors Guild defended Macmillan and criticized Amazon’s “bullying tactics” in an email alert to members entitled “The Right Battle at the Right Time.” Meanwhile, some Amazon customers continue to boycott Kindle books priced higher than $9.99. As of this writing, 1,435 different comments have been posted in response to Amazon’s note to customers about the price war.

UPDATE 4:30 p.m. EST: The NY Times reports: “some Macmillan books were creeping back” this afternoon. Yesterday we interviewed O’Reilly’s Andrew Savikas about the price fight, and he shared some of his own experience: “when we raised the price of an iPhone app from $5 to $10, sales fell by 75 percent overnight. That’s a pretty loud and clear signal from the market.”

Finally, Macmillan author John Scalzi rejected calls for a boycott today, instead urging readers to buy books by Macmillan writers–helping the people most directly hurt by the stand off. After the jump, GalleyCat readers shared indie bookstores around the country where you can find Macmillan titles.

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Macmillan CEO John Sargent spoke out in a statement: “Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99. At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99. E books will almost always appear day on date with the physical edition. Pricing will be dynamic over time.”

What do you think? Meanwhile, some Amazon customers continue to boycott Kindle books priced higher than $9.99. GalleyCat looked at the Amazon Kindle forums, trying to gauge what Amazon customers thought. We’ve collected a range of opinions below.

Pamela wrote: “I am not in the habit of supporting bullies and will forever refrain from purchasing any book published by Macmillan [heretofore know as 'the bully'] or any of its divisions. I vote with my money and they just lost my vote.”

ScottBooks argued the opposite: “I believe $14.99 is reasonable. It’s a heckuva lot less than what I paid for new hardcovers. (And I get to read them on Kindle!) People who waited for paperbacks can wait for the cheaper eBook edition. You offer them for sale and we’ll decide whether or not to buy them.”

Mabalacat added this point: “If they want higher prices then it is time for them to provide quality formatting. Not just quickly scanned with no effort to fix the OCR errors. The frequent formatting errors would no longer be acceptable.”

K. Landow disagreed: “You should be more concerned about Amazon’s tactics. Why shouldn’t a publisher–who has made the financial commitment and cultivated a project–be able to set their own prices? If you made dog food, widgets, or moon pies do you want your biggest customer telling you what YOUR terms of business should be? No, I didn’t think so.”

It is important to note that Macmillan books are still not available directly from Amazon, as you can see by following links to John Scalzi‘s Old Man’s War or William Poundstone‘s Priceless: The Myth of Fair Value.

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The story broke on Friday evening, as Amazon and Macmillan had a dispute over raising the standard eBook price from $9.99 to around $15. After negotiations ended in “impasse,” the online bookseller stopped directly selling Macmillan titles, only offering Macmillan books through outside vendors. The $9.99 price point has been a touchy subject all year. As we reported yesterday, a vocal contingent of Amazon customers are still encouraging others to boycott Kindle books that cost more than $9.99.

Here’s an excerpt from the Publishers Lunch ad: “Under the agency model, we will sell the digital editions of our books to consumers through our retailers. Our retailers will act as our agents and will take a 30% commission (the standard split today for many digital media businesses). The price will be set the price for each book individually. Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99. At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99. E books will almost always appear day on date with the physical edition. Pricing will be dynamic over time.”

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The current Henry Holt president Dan Farley will turn his attention towards managing the Macmillan Children’s Publishing Group. In September, Rubin resigned as executive VP and publisher-at-large for Random House, a position he assumed in February following massive restructuring at the conglomerate. Before that, he had served as Doubleday Broadway Group’s former publisher.

Here’s Rubin’s statement, from the subscription-only article: “Throughout my career, I have always strived to publish those exceptional books that bridge the gap between commerce and literature. I believe that Holt is the perfect place to do this, given that its sister companies are the distinguished Farrar Straus and the powerhouse St. Martin’s Press, I can’t wait to work more directly with books and authors in developing a tight, powerful, focused list.”

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Her husband kept pace, urging the CEOs to “sue the hell” out of Google over the search engine’s controversial book-scanning initiative. Perseus Books CEO David Steinberger plugged his initiative to crash-publish “Book: The Sequel” in 48-hours during BEA. “This is the way you have to behave in the future,” he declared. Simon & Schuster CEO Carolyn Reidy disagreed with this timetable for print books. “But you have to convince retailers to buy the [print] book–that takes six months.”

Macmillan CEO John Sargent worried about new media campaigns: “The majority of viral marketing doesn’t sell a ton of books,” he complained, referencing a hit viral video his company produced that only resulted in, by his estimate, sales of 210 books. He still thought the best bookselling strategy was a combination of word-of-mouth and front of store placement at bookstores around the country.

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