HarperCollins, Amazon Ink Distribution Deal
The months-long contract negotiation between HarperCollins and its biggest customer came to an abrupt end today with the news that the two parties had signed a multi-year contract.
Few details are available at this time, but we do know that a HarperCollins spokesperson said in a statement that "HarperCollins has reached an agreement with Amazon. Our books will continue to be available on the Amazon print and digital platforms".
The WSJ is speculating that this means that the contract calls for HarperCollins to set the retail prices of its ebooks, with incentives for HarperCollins to provide lower prices to consumers. That’s more or less what was whispered about the contracts Amazon signed with Hachette, Macmillan, and Simon & Schuster last year, so it is probably true.
Last October, Amazon reached an agreement with Simon & Schuster which covered both ebooks and paper books. A few weeks later Amazon came to terms with Hachette Book Group, followed in December by a contract with Macmillan.
And now Amazon has a deal with HarperCollins, putting an end to the speculation that the two were approaching a showdown.
While we don’t have specifics on any of the contracts, we do know that the earlier contracts were referred to as agency lite. But I’m not so sure that term is accurate.
Given the price tags the 3 publishers were hanging on their ebooks when I checked in late March, I don’t think we should use the term "lite" as an adjective. I think they should simply be called agency contracts, because as far as a consumer is concerned there is nothing "lite" about them.
They are straight up agency contracts, and that means that there are now 4 publishers whose ebooks I will not be buying. It’s not just that I have a philosophical objection to agency pricing, but also that the prices are higher than I am willing to pay.
image by Philip Taylor PT
Felipe Adan Lerma April 14, 2015 um 6:43 am
Higher than I’m willing to pay either. Plenty of good and great books available at more reasonable prices. Plus there’s places like Half Price Books where I can get paper and hardbacks if needed or preferred. And of course there’s libraries.
Nate Hoffelder April 14, 2015 um 7:29 am
Or we can even buy the same title as a used book at Amazon.
Felipe Adan Lerma April 14, 2015 um 7:44 am
True, I do that too. Bought The Big Sleep (paper) that way, 3rd party vendor listed on Amazon.
fjtorres April 14, 2015 um 8:06 am
What makes "agency lite", lite, is a limited ability to discount. And that it is a *negotiated* contract, not imposed via conspiracy.
The key negotiation points in any full agency deal are going to be price-matching provisions (since agency + mfn has been ruled out by the feds) and margin escalation terms. The latter have been reported to be in place but the former have been neither confirmed nor denied. Should be interesting to see what happens if/when Apple discounts a BPH title…
Nate Hoffelder April 14, 2015 um 8:52 am
Yes, but do you know how much Amazon is allowed to discount and how often?
Until we have the specifics on that, we don’t know how this "lite" version of agency differs from the regular kind. And looking at it from the outside, I’m not sure the difference is all that big.
Nate Hoffelder April 14, 2015 um 9:51 am
Also, the prices were too high on the ebooks I checked, and Amazon can’t discount them. That makes it agency in my book, so it doesn’t matter what label is attached.
fjtorres April 14, 2015 um 10:32 am
I didn’t say that the current contracts are actually agency lite.
Just pointing out what the DOJ proposal entailed.
Besides, just because a retailer *can* discount doesn’t mean they will. Look at iBooks. Apple can discount everything and anything. They don’t, do they?
That is why I think price matching is where it gets interesting.
Anyway, Amazon could, theoretically, be giving the BPHs the higher prices they wang to boost sales of Indie and smaller tradpubs at their expense. As in, "Be careful what you ask for…"
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