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No Authors Held Hostage as HarperCollins and Amazon Come to Terms

HarperCollins authors can breathe a sigh of relief this week, as the publisher and Amazon have come to terms on a new multi-year distribution deal. The agreement lets the parties avoid the sort of showdown that left authors in the crossfire when Amazon slowed sales of Hachette authors’ books while those two corporations negotiated a contract last year.

For HarperCollins authors, the immediate upshot is that Amazon will continue to feature and sell their books. Earlier this month, the online retailer threatened to make them unavailable if a deal wasn’t struck.

The terms of Harper’s new contract with Amazon, which covers both print and digital books, appear to resemble those arrived at by Simon & Schuster, Hachette, and Macmillan last year. It’s a return to “agency” pricing, where the publisher keeps around 70% from any given sale, and Amazon takes the remaining 30%. The hallmark of the agency model is that the publisher sets the price of the book. Theoretically, this prevents the sort of deep discounting of frontlist e-books that gnaws into hardcover sales, which are much more profitable for authors. In this new round of agreements, however, Amazon will provide financial incentives to the publishers to keep prices down.

Will those incentives work? Publishers Lunch reports that Harper is setting the e-book price of most new releases at $14.99, considerably higher than the $9.99 favored by Amazon, and also higher than the prices set by most other publishers. It remains to be seen how the new agency pricing will affect the price of e-books across the board, but for now we’re pleased to watch a distribution deal take effect without any collateral damage to authors.