Amazon has yet to settle things with Hachette

Oct 21, 2014 13:00 GMT  ·  By

Amazon has reached a deal with Simon & Schuster, a book publisher giant. The contract will last several years and it covers both print and e-books.

Considering that Amazon has been struggling for months to sign a deal with Hachette, another major publisher, the news about the understanding between the e-commerce giant and Simon & Schuster comes a bit as a surprise. It is believed that when it comes to Hachette, the issue remains that they’re unable to reach a deal over the price of the e-books, which Amazon believes shouldn’t pass a certain level.

“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,” Amazon told Mashable.

While details about the deal are scarce, the publishing house CEO, Carolyn Reidy, told authors that they had managed to convince Amazon to back down from the hardline of selling e-books at $9.99.

“We are very happy with the 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,” Reidy added. She states that it addresses the mutual concerns publishers and authors had about preserving the value of intellectual property in the marketplace.

Simon & Shuster to control pricing

Reidy indicates that with a few limited exceptions, e-book pricing is in the hands of Simon & Schuster. We may see some lower prices from the publisher, however, since it seems like Amazon has provided some flexibility to deliver “great prices” for readers.

Amazon has been arguing with publishers, saying that there’s no reason for e-books to be so expensive because there are very little production costs, which are normally covered in printed books. This, they say, should translate into lower e-book prices. It would also give Amazon more space to offer price cuts on occasion.

Amazon now dominates the publishing industry. About 67 percent of the US e-book market goes to Amazon, which means that the company is extremely powerful.

Nobel-winning economist Paul Krugman was complaining the other day that Amazon is abusing its power and that it should stop doing this. Krugman indicates to a blog from the New York Times that talked about the Amazon was penalizing Hachette books, but that it wasn’t doing so in a level manner. Instead, one book about the Koch brothers was getting delivered in two to three weeks, while one written by Paul Ryan, Mitt Romney’s running mate and chairman of the House Budget Committee was getting delivered in the regular two days.