When Amazon and Simon & Schuster confirmed on Tuesday that they had reached new sales terms on the publisher's print and digital titles, scant details about the deal were revealed. Nonetheless, a raft of stories has appeared about the situation, with many in the press speculating on who benefits, and who loses, from the agreement.
The deal, a multi-year one, is something that S&S CEO Carolyn Reidy said gives the publisher a "version" of the agency model. Reidy explained that the deal allows S&S, with exceptions, control over the price of its e-books. Supposedly, according to Reidy, S&S authors will not take a hit because of the agreement, either; Reidy claimed the agreement allows the house's writers to maintain "their share of income generated by e-book sales."
Who is taking a hit because of the agreement--and it's presumed someone is--remains one of the major questions in the industry.
Amazon, which rarely speaks to the press, made an exception here, announcing, in a statement, that the agreement "creates a financial incentive for Simon & Schuster to deliver lower prices for readers.”
Some insiders--all who spoke off the record, and with the caveat that they had no inside knowledge of the specifics--speculated that S&S may have agreed to give Amazon more coop money. (Historically, terms agreements between publishers and powerful retailers have been framed by the retailer's demand for steeper fees on coop, the money paid by publishers to retailers for the prominent display of their titles.)
At the Wall Street Journal, Jeffrey Trachtenberg quoted a person with knowledge of the deal saying that, through it, S&S's titles would get more prominent promotion on Amazon's homepage. This, certainly, speaks to the possibility that S&S offered Amazon higher coop fees.
Other outlets speculated on different aspects of the deal. In the New York Times, David Streitfeld asked what the deal between Amazon and S&S means for the situation between Amazon and Hachette, which have been in a protracted stalemate over terms. He posited: "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."
NPR sought out the take of author Douglas Preston who, in recent months, has become an outspoken critic of Amazon, forming an anti-Amazon group, Authors United. Preston, while acknowledging that he would want Hachette (which publishes his books) to accept similar terms to S&S, if they were offered, claimed he still has issues with Amazon. He said, of the deal, that "it doesn't solve the problem of Amazon. Every time they get into a negotiating problem with a publisher, are they going to target the authors? I mean, it's just unacceptable."
Author Hugh Howey, who is published by S&S and is also a frequent champion of Amazon, said the deal is a clear win for his house. Howey sees the situation this way: "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." This, Howey continued, means "everyone wins. Especially the customer."
One high-placed executive who spoke to PW said it's interesting to note that S&S's deal is a multi-year agreement, since Amazon is notorious for demanding short term deals. This exec felt that, perhaps, S&S was able to take advantage of Hachette's situation, getting Amazon to agree to slightly better terms. Under this theory, Amazon was more eager to strike a deal in order to combat some of the bad press it has received of late, which has called the company at best unreasonable and, at worst, a monopolistic entity which the government needs to address.
Still other insiders questioned whether the deal between Amazon and S&S is even news. Although the inability for Amazon and Hachette to reach terms agreement has become a very public situation--putting a spotlight on Amazon's business practices, among other things--the fact is, terms disagreements between publishers and powerful retailers have been going on since the dawn of the chain bookstore. The two things retailers and publishers have always fought over, one person noted, is discount and coop.
Correction: This article has been edited to clarify PW's interpretation of Reidy's remarks on the agreement's impact on S&S authors.