Penguin Random House is negotiating its first mega contract with Amazon since the two sides merged in July 2013. Their current contract with Amazon UK expires at the end of the month and the contract in the US is up for renewal towards the end of the year.
When Penguin merged with Random House the publisher now accounts for 1/4 of all new novels in print. With so many books in their repertoire comes tremendous negotiating power. There are not many online digital book sellers that could stay viable if suddenly all of the books published by Penguin Random House were pulled.
It is very unlikely that the two sides won’t sign off on a new contract. Sources within Amazon and the Publisher have stated they are not going to get to the point where suddenly all print and e-books are not available to be purchased. Penguin Random House spokeswoman Claire Von Schillin said “We are in continuous conversation with Amazon with whom we have an ongoing business relationship. We have no intention whatsoever of ceasing to sell our print or digital titles on Amazon. We want our books to be accessible and available everywhere.”
In the last twelve calendar months Amazon has successfully ironed out new contracts with Macmillan, Hachette and S&S. These publishers can set the prices for its electronic books, though Amazon promised “financial incentives for them to deliver lower prices.” This is known in the publishing industry as “agency-lite.”
It will be interesting if Penguin Random House signs off on the same contract that the others did. You would figure with being the biggest publisher in the world, they could get better terms.
Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about audiobooks and e-readers for the past ten years. His articles have been picked up by major and local news sources and websites such as the CNET, Engadget, Huffington Post and Verge.