New Amazon contracts see drop in e-book sales

New Amazon contracts see drop in e-book sales

E-book sales at three publishers who signed new contracts with Amazon have fallen, it has been reported.

Simon & Schuster was the first of the big publishers to sign a new deal with Amazon in October 2014. The deal was described as a “version of agency”, largely giving control of e-book prices to the publisher “with some limited exceptions”.

Hachette Book Group (HBG) in the US reached a new multi-year agreement with Amazon in November 2014 after months of negotiations.

HarperCollins reached an agreement with Amazon in April 2015, with reports that the publisher would set the retail prices of its digital books, with incentives to provide lower prices for consumers.

The agreement gave HBG responsibility for setting consumer prices of its e-books, with the publisher benefitting “from better terms when it delivers lower prices for readers”.

The Wall Street Journal has reported that all three publishers have reported a decline in e-book revenue in their latest financial statements after striking the deals.

One publishing executive, who was not named, told the newspaper: “The new business model for e-books is having a significant impact on what [the big] publishers report.

“There’s no question that publishers’ net receipts have gone down.”

Mike Shatzkin, c.e.o. of publishing consulting firm Idea Logical Co, said that “it may be that consumers aren’t happy with the higher prices”.

But another executive said: “This is a title-driven business. If you have a good book, price isn’t an issue.”

Industry researcher Codex Group LLC found that titles in the Kindle bookstore from the five biggest publishers cost, on average, $10.81, while all other 2015 e-books on the site had an average price of $4.95.

The company’s c.e.o. Peter Hildick-Smith told the Wall Street Journal: “Since book buyers expect the price of a Kindle e-book to be well under $9, once you get to over $10 consumers start to say, ‘Let me think about that’.”

Amazon declined to comment to the Wall Street Journal.