What does Simon and Schuster’s deal with Amazon mean for the e-tailer’s dispute over ebook pricing with Hachette?
The New York Times says: “Amazon told Hachette it wanted e-books to be cheaper while also reportedly seeking a greater share of the revenue from each sale. The negotiations were widely viewed by traditional publishers as an attempt to establish a new benchmark that would increasingly diminish their roles.
Perhaps Hachette’s refusal to commit helped inspire Amazon to make an agreement with Simon & Schuster. If so, a deal might inspire a settlement with Hachette. A Hachette spokeswoman declined to comment.”
Hugh Howey asserts: “There’s another advantage to this deal for Simon & Schuster. Pressure for higher ebook prices comes from print retailers, who don’t want to be undercut. Publishers aren’t stupid; they know they can sell more ebooks at a lower price and make money doing so, but they worry about harming existing partnerships. S&S can now price some ebooks high, knowing that Amazon has room to discount, and they can go to the buyers at their major accounts with the digital list price to show their support. That is, the blame for the eventual lower sale price will fall on Amazon, which brick and mortar outlets already loathe, and S&S gets to look like a champion. Meanwhile, they are giving up a percentage of margin to help Amazon discount. Everyone wins. Especially the customer.”
The Wall Street Journal reports: “Douglas Preston, a Hachette author who heads Authors United, a group of more than 1,500 writers that has publicly pressured Amazon to reach a deal with Hachette, said he wants to know whether Amazon has offered Hachette the same terms as Simon & Schuster.”
CNN.com probes: “Could both sides have really come away feeling good about the result? Maybe so — it could be a compromise in the best sense of the word. But it won’t quiet the complaints about Amazon’s behavior, most recently from The New York Times columnist Paul Krugman in a Monday op-ed.
‘By putting the squeeze on publishers, Amazon is ultimately hurting authors and readers,’ Krugman wrote. He concluded that ‘what matters is whether it has too much power, and is abusing that power. Well, it does, and it is.'”