Amazon.com, Inc. (NASDAQ:AMZN) entered a multiyear agreement with Simon & Schuster, a publishing company for both print and electronic books, according to Business Insider based on information familiar with the matter.
Simon & Schuster is one of the five major publishing companies that have been negotiating with Amazon.com, Inc. (NASDAQ:AMZN) regarding e-book pricing.
Amazon.com confirms the agreement
A spokesperson for the e-commerce giant confirmed the multiyear agreement in the United States for both print and e-books with Simon & Schuster.
“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. Importantly, the agreement specifically creates a financial incentive for Simon & Schuster to deliver lower prices for readers,” according to the spokesperson of Amazon.com, Inc. (NASDAQ:AMZN).
On the other hand, Carolyn Reidy, the chief executive officer of Simon & Schuster emphasized that the agreement with Amazon.com, Inc. (NASDAQ:AMZ) “is economically advantageous” for the publisher and its authors. According to her, the deal “maintains the author’s share of income generated from e-book sales.
In addition Reidy informed the authors and their agents that the agreement with Amazon.com, Inc. (NASDAQ”AMZN) gives control of e-book pricing to Simon & Schuster with some limited exceptions. She described the deal as a “version of agency pricing.”
“Our new deal assures that your books will be continuously available for sale at this major retailer through this year’s holiday book buying season and well beyond,” said Reidy in her letter to the authors and their agents.
Amazon.com, Inc. (NASDAQ:AMZN) started its negotiations with Simon & Schuster last summer.
Negotiation with Hachette
The e-commerce giant is still negotiating with other publishers including Hachette. Pricing and profit margins are the two major issues between the dispute of the e-commerce giant and Hachette.
Amazon.com, Inc. (NASDAQ:AMZN) was demanding a cheaper price for e-books while seeking a bigger share from sales in a new contract with Hachette. The e-commerce giant and the publisher failed to resolve their differences. As a result, Amazon.com decided to delay the release of books published by Hachette, and refused to keep them in stock. The e-commerce giant also offered 100% of e-book revenue to Hachette authors.
Last month, Hachette authors appealed to the board of directors of Amazon.com, Inc. (NASDAQ:AMZN) to end its sanctions while continuing to negotiate with the publisher. They also emphasized that the e-commerce giant was responsible for the decline of sales for some authors. The authors also said that the e-commerce giant’s actions undermined their ability to support their families, pay mortgages and provide for their kid’s college education.