Conflict Widens In E-Books Publishing

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DON GONYEA, host:

There's drama unfolding in the world of book publishing. A top literary firm representing authors like Salman Rushdie and Martin Amis has announced it will produce e-books of some of its authors' older titles itself, bypassing traditional publishers. The Wylie Agency has made a deal for electronic versions of books, like "Midnight's Children" and "Lolita," to be sold exclusively by Amazon for its Kindle device and applications. That has publishers like Random House on the defensive. Lynn Neary follows the publishing industry for NPR. Good morning, Lynn.

LYNN NEARY: Good morning.

GONYEA: So, let's start with some more specifics. What is the Wylie Agency doing here?

NEARY: OK, the Wylie Agency - which is a major literary agency, very well-known - it is setting up its own publishing arm, called Odyssey Editions. And it's going to be publishing what's known as the backlist, backlist titles, titles like "The Invisible Man," "Fear and Loathing in Las Vegas," books published before digital books existed. They're very, very important to any publishing company's bottom line, because these are best-sellers.

GONYEA: What about the publishers? How are they reacting?

NEARY: Well, the publishers are not happy, but the publishing house that has reacted most strongly is Random House, one of the biggest publishing companies in the world. Well, the first thing Random House did was say, you don't have the right to do this. They issued a statement immediately.

And then later on in the day - this was last week - they said, not only are we saying you can't do this, but we are no longer going to enter into any agreements with Wylie for English-language books. So that means that they have cut out a whole lot of authors from having - being published by Random House.

The McMillan Publishing Company's CEO responded right away to this also, and he picked up on the fact that Wylie had signed an exclusive deal with Amazon. In other words, the only place you're going to be able to buy these books is on Amazon, which is just driving everybody in the publishing industry crazy that Amazon is taking such a huge chunk of the market now.

GONYEA: Clearly, this has a lot to do with royalties, fewer people getting a piece of the pie, right?

NEARY: Absolutely. That, in addition to the rights, that's the next really big question that this whole move that Wylie is making has raised. And that is the question of royalties because the publishers not only are saying well, we have the right to the book; they're also saying, we have the right to say how much royalty we will give an author. And the number that you usually hear is that the big publishing houses are offering about 25 percent royalties for e-books. Well, authors and agents think it should be more like 50 percent. So, obviously, that's one of the issues that this move by Wylie is raising.

GONYEA: So why is Wylie Agency making this move now? Is it no more complicated than the fact that e-books are catching on and selling like crazy?

NEARY: Yeah. And I think that there have been a number of really significant markers, the most recent being that Amazon just announced last week that it had sold more electronic books than hard covers in the last three months. That was seen as a pretty big milestone. Also, the American Publishing Association has announced that the sales of e-books have increased from 3 percent of the market a year ago, to 8 and a half percent. So that's 5 and a half percent increase of sales of e-books in one year.

GONYEA: So what are the larger implications for the publishing industry?

NEARY: There's huge implications here for the publishing industry because, basically, what Wiley has said is - to the big publishing houses - we do not need you to publish e-books. They're talking now about the backlist, but that could apply to new books as well, couldn't it?

As somebody said to me as I was reporting on this: What you need the publishing houses for is to put books on shelves. If you don't need books on shelves, you don't need the publishing houses. So everybody's trying to figure out, how many books do we need on the shelves? How many are going to be e-books? And if it's going to be mostly e-books at some point in the future, what's the future of the publishing companies?

GONYEA: NPR's Lynn Neary. Lynn, thanks much.

NEARY: Good to be here.

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