Amazon.com and Simon & Schuster have agreed on a multiyear contract for the sale of print and digital books, as the internet retailer continues to battle Hachette.
Amazon, the biggest paper and e-book supplier in the U.S., has been involved in a public dispute with another publisher, Lagardère SCA’s Hachette. The companies disagreed on e-book pricing and marketing payments. The retailer insists nearly all e-books to be set to $9.99 as a reflection of lower production and distribution costs, and has asked publishers to pay out a larger percentage of the cover price to their authors.
The two parties have been on edge since early May, since then Amazon has delayed shipments, cut discounts and forbidden pre-orders of Hachette books. Douglas Preston, an author at Hachette and head of Authors United, has publicly pressured Amazon into signing a deal with the French publisher. Preston has asked Amazon whether it has offered Hachette the same terms as to Simon & Schuster.
Authors United, with more that 1 500 members, said they are working on a letter to the Justice Department asking Amazon to be put under antitrust investigation.
“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.
Meanwhile the situation with Simon & Schuster is completely different, everything has been kept quiet and between the two companies. The publisher, who recently released Walter Isaacson ’s “The Innovators” and Colm Toibin’s “Nora Webster”, will be able to set consumer prices of its digital books and in some situations Amazon will have the right to offer discounts on titles, said a person familiar with the matter.
Amazon shared in a statement: “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.”
The new agreement goes into effect in 2015 and “is economically advantageous for both Simon & Schuster and its authors,” the publishers CEO Carolyn Reidy wrote in a note to Simon & Schuster’s authors and their agents.
Amazon.com Inc climbed 0.85% on Monday to $306.21 on the NASDAQ and traded 0.54% higher at $307.87 at 14:03 GMT on Tuesday, marking a one-year decrease of 5.69%. The company is valued at $141.48 billion. According to the Financial Times, the 36 analysts offering 12-month price targets for Amazon.com Inc have a median target of $392.50, with a high estimate of $460.00 and a low estimate of $330.00. The median estimate represents a 28.18% increase from the previous close of $306.21.
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