Many in publishing were surprised Monday night when news broke that Amazon had signed a new contract with Simon & Schuster. What few details are publicly available for the deal suggest that it is a modified version of agency, which surprised pundits just as much as the fact that the deal was signed two months before the old contract expired.
The S&S-Amazon deal has led some to look at the ongoing dispute between Amazon and Hachette in a new light, raising the question as to why exactly that fight has continued so long.
Some, including Doug Preston and David Streitfeld, sounded like broken records when they discussed the deal. NPR sought out Preston when they covered the deal, and he said:
If Simon and Schuster is happy with this agreement, and if Hachette's being offered the same terms, I would, you know, be wanting Hachette to strive to solve this problem as soon as possible. But it doesn't solve the problem of Amazon. Every time they get into a negotiating problem with a publisher, are they going to target the authors? I mean, it's just unacceptable.
I do agree that it was terrible how Amazon targeted S&S authors ... No, wait, I'm thinking of B&N and their 8 month long negotiation with S&S in 2013. Amazon hasn't been accused of taking any steps to curtail S&S sales. My mistake, sorry.
Elsewhere, the commentary is far less friendly to Hachette. Passive Guy weighed in the story yesterday, writing:
The deal between Amazon and Simon & Schuster has put Hachette in a box.
The Amazon/Hachette agreement was critical to Big Publishing because Hachette’s was the first of the court-ordered Price-Fix Six contracts to expire. The new Hachette deal would set the pattern for the other miscreants when their Amazon contracts expired.
By making a deal with S&S two months before the S&S contract expired, the Amazon/S&S contract is the pattern contract for the other publishers. One does not assume that S&S has harmed its authors or itself with its Amazon contract.
Amazon has performed a switcheroo. Now the onus is on Hachette. What’s wrong with Hachette that it can’t get the same contract that S&S has?
David Gaughran concurs, noting that the sky hasn't fallen as a result of deal between Amazon and S&S:
It also begs a question: what exactly is Hachette holding out for? As everyone knows at this point, Hachette’s contract with Amazon expired in March and the two parties have been unable to agree a deal since.
The narrative being pushed by the media was that Amazon’s desired terms would harm Hachette and its authors, yet Simon & Schuster was able to agree a contract very quickly which CEO Carolyn Reidy called a “positive development.” She characterized the deal as “economically advantageous for both Simon & Schuster and its authors and maintains the author’s share of income generated from e-book sales.”
Gaughran also brings up the same point I did about Bonnier and its new deal with Amazon in Germany, and if you haven't yet read the second half of his post, you should.
He explores the history of one of the previous times Amazon was accused of bullying (the Macmillan buy buttons removal in 2010) and notes how the details revealed later in court documents cast a different light on the behind the scenes events than what the media reported at the time.
It's worth noting, though, that not all of the commentary is as critical of Hachette. Hugh Howey, in particular, is far more magnanimous than I would have been. He offers a nuanced dissection of the deal and the affect it will have on Amazon's upcoming contract negotiations.
Starting with the point that the KDP TOS is what Amazon would see as an ideal contract, Howey notes that the S&S deal is probably structured along the same lines:
There isn’t a sliver of a leak about this deal that doesn’t fit the model of Incentivized Agency. S&S sets prices; Amazon can discount; there are “financial incentives to drop prices.”
My guess is that Streitfeld learned the split is dependent on price, but he doesn't want to be the one to break that news. Eventually, it’ll be public knowledge that Amazon pays a higher rate when wholesalers provide ebooks at a sane price. And people will be shocked. Except for self-published authors, who have been pressured by Amazon to keep ebook prices in a reasonable middle range for years.
The one statement we have from Amazon about this deal claims: “Importantly, the agreement specifically creates a financial incentive for Simon & Schuster to deliver lower prices for readers.”
If Howey's expansion on the limited public statements is right, then Amazon has managed to avert what I and many others feared most: that the publishers would push for a return to straight agency.
It's a shame we don't know more, because I for one would really like to know if Amazon actually got a major publisher to agree to a KDP-style contract. That would represent a major shift in the landscape of the publishing industry.
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