Amazon inks controversial deal for exclusive e-book titles

Amazon hasn’t had the best relationship with publishers when it comes to e-books. Their insistence on discounting titles and pushing the Kindle have resulted in public spats that included Amazon banning all Macmillan titles from their site earlier this year. It’s no wonder that their new deal with literary super agent Andrew Wylie cuts out publishing houses in favor of a direct relationship with clients that include Salman Rushdie.

Andrew Wylie earned the nickname “the Jackal” for a reason; he doesn’t mess around when it comes to his clients. Wylie had threatened before to remove publishers from the e-book game due to their unfair pricing structure. He was looking to increase the profit margin for his clients from 25% to 50% for each e-book sold because of the lower delivery and publishing costs.

Wylie’s clients include over 700 authors and estates which hold rights to classic books like Lolita and John Updike’s “Rabbit” series. Under their two year deal, titles will be available in Amazon’s Kindle store under the “Odyssey Edition” imprint for $9.99.

Many of the “Odyssey Edition” e-books are classified as backlist titles or old titles that are still in print. New titles from from Dan Brown or Patricia Cornwell do big numbers upon release, but old titles like Hunter S. Thompson’s Fear and Loathing in Las Vegas are always popular. One expert estimated that 30% to 40% of a publishing house’s
yearly profits come from backlist titles. Wylie’s deal with Amazon also creates a legal problem for publishers since many of their contracts were signed before the introduction of the e-book format.

While Wylie finds the loophole an advantage to his clients, companies like Random House aren’t happy with the situation. They still hold the rights to publish physical editions of the backlist books and are making moves to enact a literary embargo on Wylie’s firm. A Random House spokesperson issued the following statement:

“The Wylie Agency's decision to sell e-books exclusively to Amazon for titles which are subject to active Random House agreements undermines our longstanding commitments to and investments in our authors, and it establishes this Agency as our direct competitor. Therefore, regrettably, Random House on a worldwide basis will not be entering into any new English-language business agreements with the Wylie Agency until this situation is resolved."

While many gadget geeks are looking forward to the next iPad or Nook upgrade, content may be the king of the e-reader world. The instant gratification of browsing a web site then enjoying a classic book within minutes is a lot like the experience of on demand cable. Wanting an item “right now” is bound to create more price fights in the future.