Book Wars: Random House Severs Ties With Wylie Agency After Amazon Deal

Amazon shot off an innocuous news release last night announcing that several heavyweights of literature would soon be joining its Kindle Store roster, including Salman Rushdie, Vladimir Nabokov, and Philip Roth. These big gains for Amazon's e-book store come from a deal with the Wylie Agency that's bringing 20 of the most important titles in fiction to the Kindle. But the new deal isn't just digitally launching great works such as Portnoy's Complaint—it's also causing huge complaints from the authors' publisher, Random House.

Following Amazon's announcement, Random House, the leading trade publisher in the U.S., announced it would no longer conduct "new English-language business" with the Wylie Agency. "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," said Stuart Applebaum, a Random House spokesman in a statement Thursday. "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."

With production costs of e-books declining thanks to the ease of Internet distribution, the need for publishers is diminishing. And Wylie, according to the Associated Press, has for some time considered breaking with traditional publishers by releasing books themselves. Agency founder Andrew Wylie, whose clients include Roth and Rushdie among others, finally decided to release a line of e-books through Odyssey Editions, an e-publishing firm Wylie launched last year that has been attracting authors with offers of higher royalties. Traditional publishers typically offer 25% of royalties for e-books—agents and authors are now looking for 50%.

While the financial terms of the deal were not disclosed, Amazon must've offered the Wylie Agency enough to lure it away from its global business with Random House. Either way, Wylie's jump into e-publishing sparks a whole new war between agencies and traditional publishing houses, which will likely now look for new ways to stymie such deals.

Ultimately, the big winner today is Amazon. Without damaging its relationship with Random House, it gained twenty new titles for its e-book store including Midnight's Children and Lolita—neither of which will be available through Apple's iBook store. Perhaps it's aggressive deals like this that helped Amazon's digital store grow more than 200% since January, and its e-book sales overtake hardcovers for the first time.

Correction: An earlier version of this article misattributed Jane Friedman as a co-founder of Odyssey Editions. Friedman, the former CEO of HarperCollins, is actually the co-founder of Open Road Integrated Media, a content marketing firm that focuses on e-books.

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