By Jeffrey A. Trachtenberg
Amazon.com Inc. and HarperCollins Publishers have reached
agreement on a new multiyear publishing pact that covers both print
and digital titles, HarperCollins said.
The agreement calls for HarperCollins to set the retail prices
of its digital books, with incentives for HarperCollins to provide
lower prices to consumers, according to a person familiar with the
situation.
The deal's specific financial terms weren't available. The new
agreement is expected to go into effect this week.
"HarperCollins has reached an agreement with Amazon. Our books
will continue to be available on the Amazon print and digital
platforms," a HarperCollins spokeswoman said in a statement.
A spokeswoman for Amazon declined to comment.
The move benefits HarperCollins and its authors, because it
means their titles will continue to be promoted and sold without
interruption by Amazon, which dominates the sale of physical books
online as well as e-book sales.
The agreement comes as HarperCollins is readying its marketing
plans for Harper Lee's new novel "Go Set a Watchman." The book,
which publishes July 14, is expected to be HarperCollins's biggest
selling title of the year.
The deal also benefits Amazon because it assures the retailer of
a good profit on HarperCollins digital titles. Under the so-called
agency pricing model, publishers keep roughly 70% of the revenue
from each individual sale, with retailers receiving an estimated
30% as their fee. Discounting is done only with approval of the
publisher.
The pact with HarperCollins, which like The Wall Street Journal
and Dow Jones Newswires is owned by News Corp, appears to be
similar in scope to those struck with three other major publishers
in 2014. Last October, Amazon reached agreement with CBS Corp.'s
Simon & Schuster publishing arm covering digital and physical
books. Then it came to terms with Lagardere SCA's Hachette Book
Group, followed by Macmillan, a unit of Germany's Verlagsgruppe
Georg von Holtzbrinck GmbH, in December.
The new agreement puts an end to speculation that Amazon and
HarperCollins were nearing a showdown that would disrupt the sale
of HarperCollins titles. When Hachette and Amazon couldn't agree on
terms last year, Amazon stopped taking preorders on coming Hachette
titles, reduced the discount it offered on many Hachette titles,
and was sometimes out of stock on new Hachette books.
Write to Jeffrey A. Trachtenberg at
jeffrey.trachtenberg@wsj.com
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