Hachette, HarperCollins Publishers, and Simon & Schuster report declining revenues on ebooks after winning the right to set prices in deal with Amazon
E-Book Sales Fall After New Amazon Contracts — E-book revenue is falling, and some people in the publishing industry say it is partly …
Context & Ripple Effects
In April, Amazon and HarperCollins signed a multiyear deal letting the publisher set its own ebook prices — the agency model the big houses had fought for since the last round of Amazon disputes. Five months on, the WSJ reports Hachette, HarperCollins, and Simon & Schuster are all seeing ebook revenue decline under those new contracts.
The timing lines up with a broader pullback: the NYT counts a 10% drop in US ebook sales for early 2015 while print and bookstores hold firm. The pattern suggests publishers used their new pricing power to raise prices, trading unit volume for margin — and so far losing more volume than they gained per copy.
First-order effects
- Hachette, HarperCollins Publishers, and Simon & Schuster take direct revenue hits on their ebook lines immediately after gaining price control, the opposite of what winning agency terms was expected to deliver.
Second-order effects
- Readers priced out of ebooks migrate back to physical formats, reinforcing the print-and-bookstore resilience the NYT documents and softening demand inside Amazon's Kindle storefront.
Third-order effects
- Publishers respond by defending ebook prices across every alternative channel rather than competing on cost — later restricting library lending terms that push per-copy costs toward $40 for libraries, and suing Internet Archive over free scanned-book borrowing.
The trend: Trade publishing is settling into an agency-pricing world where the big five treat ebooks as a premium-margin format and absorb shrinking volumes by protecting price everywhere else.