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Simon & Schuster inks contract deal with Amazon Print Email
Written by Christine D. Johnson   
Tuesday, 04 November 2014 04:42 PM America/New_York

Online retailer moves forward with one Big Five publisher but continues e-books battle with Hachette

Simon & Schuster and Amazon have reached a multi-year agreement for the sale in the U.S. of print and digital books. The deal, which goes into effect Jan. 1, reportedly came after a months-long process.

“We are very happy with this agreement, as it allows us to grow our business with Simon & Schuster and help their authors reach an ever-wider audience,” the Amazon books team posted online Oct. 20. “Importantly, the agreement specifically creates a financial incentive for Simon & Schuster to deliver lower prices for readers.”

AmazonLargeIn an unusual move, Simon & Schuster President and CEO Carolyn Reidy announced the deal in an Oct. 20 letter to authors and agents: “It is not our usual practice to announce such agreements, but our publishers and I feel that the high level of public speculation over the status of these talks made it important to let you know about this positive development.

“We are very happy with this agreement as it is economically advantageous for both Simon & Schuster and its authors and maintains the author’s share of income generated from eBook sales. It addresses our mutual concerns about preserving the value of our intellectual property in the marketplace, as it is a return to a version of agency pricing that, with some limited exceptions, gives control of eBook pricing to Simon & Schuster, while providing us the flexibility to deliver great prices for readers.”

Reidy told authors that the deal assures that Simon & Schuster books will be “continuously available for sale” through Amazon this holiday season and beyond.

Amazon’s contract dispute continues with another of the “Big Five” book publishers, however. Nine-hundred authors—including household names Stephen King, J.K. Rowling, John Grisham and Malcolm Gladwell—signed a letter protesting Amazon’s tactics in the Hachette Book Group fray, but the online giant defended itself, working for e-book pricing that is not “unjustifiably high.”

“I think it will serve to make Hachette more frustrated with their inability to make a deal knowing that one of their competitors has reached a deal,” Richard Pine, a partner in the New York literary agency InkWell Management, told the Wall Street Journal.

The dispute with Hachette may be coming home to roost. For the July-September period, Amazon announced its worst quarterly loss since 2003: $437 million. Some observers believe publicity surrounding the battle with Hachette may have contributed to Amazon’s downturn.

TIME magazine pointed out Amazon’s image problem and concluded: “If book lovers ultimately decide that Amazon is bad for authors, Amazon could lose its hold on the very business that nurtured its growth.”

Amazon also was due to negotiate new contracts with Penguin Random House, Macmillan and HarperCollins Publishers at press time. —Johnson