Amazon pens deal with HarperCollins

Amazon (NASDAQ:AMZN) has signed a deal with HarperCollins as part of a multi-year publishing contract for print and digital titles. Under the agreement, HarperCollins will set the retail prices of its digital books sold on Amazon's e-commerce site.

According to a person familiar with the situation, HarperCollins will be given incentives from Amazon to provide lower prices to shoppers, reported Dow Jones Business News.

Though specifics on the deal are still unknown, the agreement becomes effective this week.

The move is expected to benefit HarperCollins' authors because, despite cheaper selling prices, Amazon will give their work more exposure. Amazon currently dominates physical and e-book sales online.

Last year HarperCollins relaunched its site to sell books, e-books and audiobooks directly to shoppers in retaliation to the pricing wars between Amazon and publishers.

Amazon expects a good profit on HarperCollins' digital titles. Amazon's pricing model usually allows publishers to keep about 70 percent of the revenue from a sale, while Amazon receives about 30 percent.

Amazon has similar deals with other publishing companies including Simon & Schuster, Hachette Book Group and Macmillan.

The agreement with HarperCollings is intended to prevent any poential disruptions in Amazon's sales, which is what happened last year when Amazon and Hachette could not agree to terms and Amazon stopped taking preorders on upcoming Hachette titles.

For more:
-See this Dow Jones Business News article

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