Amazon.com Inc. and CBS Corp.'s Simon & Schuster publishing
arm have reached a new multiyear print and digital contract, a pact
that comes as the online retailer continues difficult negotiations
with Hachette Book Group.
Simon & Schuster, whose recently published works include
Walter Isaacson's "The Innovators" and Colm Toibin's "Nora
Webster," will set the consumer prices of its digital books, and
Amazon will be able to discount titles in certain situations,
according to one person familiar with the agreement.
Simon & Schuster titles also will be well promoted on
Amazon's website, the person said. The contract that had been in
place previously was set to expire in two months.
Amazon on Monday evening confirmed the deal, adding, "The
agreement specifically creates a financial incentive for Simon
& Schuster to deliver lower prices for readers."
Amazon's dealings with publishers have come under greater
scrutiny lately amid author criticism of its negotiating tactics in
the dispute with Lagardère SCA's Hachette. As a result of that
standoff, which centers on e-books, Amazon no longer allows
consumers to preorder Hachette titles. The retailer has also
reduced the discount it offers on many Hachette books and delayed
shipment of some Hachette titles. The two sides have been at odds
since early May.
Amazon has argued that it is taking a stand to ensure it can
offer consumers the best prices. Though precise terms of the deal
with Simon & Schuster weren't available, the fact that Amazon
reached an amicable arrangement with the publisher could ratchet up
pressure on Hachette. Sales of some Hachette titles have suffered
as a result of the trade dispute with Amazon.
"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," said Richard Pine, a partner in
the New York literary agency InkWell Management LLC.
Mr. Pine, who represents authors published by Simon &
Schuster and Hachette, said that Hachette authors "who are most
dialed into their book sales are the ones who are most frustrated.
There isn't one of them who doesn't want the situation wrapped up
yesterday."
A spokeswoman for Hachette declined to comment.
In a letter to agents and authors, a copy of which was viewed by
the Journal, Carolyn Reidy, chief executive of Simon &
Schuster, wrote that, "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
e-book sales." Ms. Reidy also noted in the letter, which went out
late Monday, that the pact "addresses our mutual concerns about
preserving the value of our intellectual property in the
marketplace."
In addition to ongoing talks with Hachette, Amazon will
eventually negotiate new contracts with Penguin Random House,
Macmillan, and HarperCollins Publishers, a unit of News Corp, which
also owns The Wall Street Journal. Spokespeople for the three
publishers declined to comment.
Douglas Preston, a Hachette author who heads Authors United, a
group of more than 1,500 writers that has publicly pressured Amazon
to reach a deal with Hachette, said he wants to know whether Amazon
has offered Hachette the same terms as Simon & Schuster.
Authors United is working on a letter to the Justice Department
asking the government to launch an antitrust investigation into
Amazon.
"We want them to look into Amazon's market practices and see if
they are engaged in predatory pricing or anticompetitive behavior,"
said Mr. Preston.
A spokeswoman for Amazon declined to comment.
Write to Jeffrey A. Trachtenberg at
jeffrey.trachtenberg@wsj.com
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