Amazon, HarperCollins Reach Multiyear Publishing Deal -- Update

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 [e-mail]

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