Amazon Signs Multiyear Book Deal With Simon & Schuster

Updated on Inc. and publisher Simon & Schuster have agreed to a multiyear deal for the sale of print and digital books, the companies said.

While the specifics of the agreement weren’t disclosed in a letter that the publisher sent to authors yesterday, Simon & Schuster Chief Executive Officer Carolyn Reidy said the deal “maintains the author’s share of income generated from e-book sales.” The accord gives Simon & Schuster control of digital-book pricing and also provides “flexibility to deliver great prices for readers.”

Pricing is at the heart of a months-long dispute between Amazon and Hachette Book Group. The world’s largest online retailer blocked pre-orders for some of Hachette’s books earlier this year and pushed for lower prices, while Hachette is seeking to retain more control over pricing. So far, many authors have sided with Hachette, and hundreds of writers signed a letter last month addressed to Amazon’s board, calling for an end to the spat.

Sarah Gelman, a spokeswoman for Seattle-based Amazon, said that the deal “creates a financial incentive for Simon & Schuster to deliver lower prices for readers.”

“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,” Gelman wrote in an e-mailed statement yesterday.

New Deal

“Our new deal assures that your books will be continuously available for sale at this major retailer through this year’s holiday book buying season and well beyond,” Reidy wrote in the letter, obtained by Bloomberg News. “The high level of public speculation over the status of these talks made it important to let you know about this positive development.”

Amazon said in July that sales of titles go up when prices are lower, citing data from its Web store. The company proposed that revenue from an e-book should be split 35 percent to the author, 35 percent to the publisher and 30 percent to Amazon.

Simon & Schuster, a unit of CBS Corp., publishes about 2,000 book titles annually. CBS’s publishing revenue in the quarter ending June 30 was $211 million, up 12 percent from the previous year.

Amazon dominates e-book sales with 60 percent of the market, according to Forrester Research. The company also helped pioneer the e-book market with the introduction of the Kindle device in 2007.