Amazon, HarperCollins Reach Multiyear Publishing Deal

Amazon and HarperCollins Publishers have reached agreement on a new multiyear publishing pact that covers both print and digital titles. Apparently, the agreement calls for HarperCollins to set the retail prices of its digital books, with incentives for HarperCollins to provide lower prices to consumers.

The move benefits HarperCollins and its authors, because it means their titles will continue to be promoted and sold without interruption by Amazon, which dominates the sale of physical books online as well as e-book sales. The deal also benefits Amazon because it assures the retailer of a profit on HarperCollins digital titles. Under the so-called agency pricing model, publishers keep roughly 70% of the revenue from each individual sale, with retailers receiving an estimated 30% as their fee. Discounting is done only with approval of the publisher.