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HarperCollins reaches deal with Amazon, staves off “doomsday scenario”

amazon_logoAmazon, the world’s largest online book retailer, and HarperCollins, the second-largest of the so-called “big five” publishers in the U.S., have entered into a multiyear contract, avoiding a protracted battle over discounts and pricing. Bloomberg Business quotes Erin Crum, a spokesperson for HarperCollins, as saying, “HarperCollins has reached an agreement with Amazon and our books will continue to be available on the Amazon print and digital platforms.”

According to Engadget, the deal with HarperCollins is similar to deals struck last year with Simon & Schuster, Macmillan, and Hachette, in that it allows HarperCollins to set prices on ebooks – long rumoured to be a point of contention with Amazon, which likes to keep prices artificially low. This is ironic, since it basically represents a capitulation to the agency pricing model that the retailer rejected several years ago, leading to a publisher revolt and accusations of collusion from the U.S. Department of Justice.

Earlier this year, Business Insider indicated that Amazon had reached an impasse in contract negotiations with HarperCollins, potentially paving the way for a protracted battle resembling the one the retailer engaged in with Hachette last year. That contretemps saw Amazon delay shipments of Hachette titles and remove buy buttons from the publisher’s books (something Amazon had previously done to Macmillan). The battle turned exceedingly ugly, with more than 900 authors eventually signing an open letter criticizing Amazon for its bullying tactics.

Following the Business Insider piece, a post on the Melville House website asked whether Amazon might be preparing to engage in a “doomsday scenario” with HarperCollins, something the blog post suggested would be tantamount to an “apocalyptic development.”

HarperCollins_logoOverheated rhetoric aside, this never seemed like a very plausible scenario. HarperCollins is not Hachette: it has much more leverage over Amazon when negotiating terms. Its stable of authors – including Neil Gaiman, Dennis Lehane, and J.R.R. Tolkien – features big names that Amazon would not want to risk losing access to. Among the big names in HarperCollins’s stable, one looms larger than all the others this season. Harper Lee’s much ballyhooed second novel, Go Set a Watchman, is being published on July 14; there is no way Amazon would risk being the only online retailer in the U.S. not to feature that title.

But more that that, HarperCollins has been aggressively pursuing alternate avenues for distributing its wares online. It signed with the subscription services Oyster and Scribd, and last year revamped its website to include the ability to sell direct to consumers.

When Macmillan signed its contract with Amazon last year, CEO John Sargent stated that the retailer accounts for as much as 64 per cent of the publisher’s revenue from ebooks. HarperCollins has obviously taken measures to mitigate this market dominance, and – combined with its size and market clout – these seem to be working. Though with agreements already in place with three other big five publishers (Penguin Random House is now the lone holdout), Amazon had no real incentive not to agree to similar terms with HarperCollins.

Which in a way is disappointing. It would probably have been ugly, but a knock-down, drag-out, no-holds-barred battle between Jeff Bezos and Rupert Murdoch would surely have been entertaining.

This post originally appeared on That Shakespearean Rag


April 15th, 2015

2:00 pm

Category: Bookselling

Tagged with: Amazon, HarperCollins