Simon & Schuster (s CBS)has entered new ebook contracts with retailers over the weekend, as a result of its settlement with the Department of Justice. The other two settling publishers, Hachette and HarperCollins (s NWS), had already signed new contracts — Hachette last week, and HarperCollins in September.
“We have entered new agreements with our ebook agents that are in compliance with the DOJ settlement,” S&S SVP of corporate communications Adam Rothberg said in a statement, “and we look forward to working with our retailers to expand the readership for our authors and grow the ebook marketplace.”
All three settling publishers are still using a modified agency pricing model: They set an ebook’s list price and pay the retailer a commission. Under the new contracts, the difference is that retailers can discount the ebooks as much as they want (and can take a loss on the sales of those books).
There are a few exceptions: The settlement allows publishers the option to negotiate retailer contracts that include “a commitment from an e-book retailer that a retailer’s aggregate expenditure on discounts and promotions of the Settling Defendant’s ebooks will not exceed the retailer’s aggregate commission” — though that doesn’t prevent deep discounts on specific titles. The settling publishers can also negotiate one-year contracts that “prevent e-book retailers from cumulatively selling that Settling Defendant’s e-books at a loss over the period of the contract.” More on the settlement and ebook prices here.
Apple, Macmillan and Penguin did not settle with the DOJ, and are set to go to trial in June 2013.
Photo courtesy of Shutterstock / Borys Shevchuk