BIG NEWS! BIG NEWS!
When the history of e-books is eventually written, Stephen R. Covey may get an entire chapter. That's because the author of The 7 Habits of Highly Effective People and Principle-Centered Leadership has moved his e-book rights to those titles from Simon & Schuster to an exclusive arrangement with Amazon.com for its Kindle e-reader.
The move, announced Tuesday by Amazon, is being watched carefully by traditional publishers. They are concerned that more popular authors could make a greater share of profits by licensing their e-book rights directly to e-publishers, rather than by going through print publishers.
50 Versus 25 Percent
According to news reports, Covey will release other titles exclusively as e-books through Amazon. The deal was made with Amazon on Covey's behalf through RosettaBooks, which has said the author will receive half of the net proceeds. Traditional publishers generally offer 25 percent of net from digital publications.
In addition to the higher royalty, Amazon's plans to heavily promote the titles were also reportedly a factor in the author's decision.
One cause for traditional publishers' alarm -- and potentially a big reason why the move could warrant its own chapter in the history books -- is because digital rights are not specifically spelled out in older publishing contracts. Covey's The 7 Habits was first published in 1989 and is a steady seller.
Authors are beginning to contend that any rights not explicitly defined in a contract belong to them, while publishers are maintaining that e-rights are covered. In fact, The New York Times reported Monday that Random House sent a letter this past week to major literary agents, emphasizing that it retains the exclusive right to electronic book publishing.
Although still small by most standards, the e-book market is rapidly heating up. In addition to Amazon's industry-leading Kindle, Barnes & Noble recently released its nook e-reader. While the nook has received less-than-stellar reviews for its technical performance, it does offer some new features, such as e-book lending.
Book Industry 'Fighting Electronic Forms'
Sony has also released several e-book readers, and e-book software is becoming available on smartphones -- including a recently released Kindle app for the iPhone. And Apple's long-rumored tablet computer could have a major impact on e-publishing, if and when it emerges next year.
Brad Shimmin, an analyst with industry research firm Current Analysis, said traditional book publishers are resisting the impact of the new technologies on their content, as did the music industry at first. Starting years ago, he said, the publishing industry "has been fighting electronic forms" of books.
Shimmin noted that the movie and TV industry has learned lessons from the false starts by the music industry, but the book industry has not. Additionally, he pointed out, the book industry "doesn't have the leverage" of the movie and TV companies, who often control the distribution of their products as well as the creation.
Michael Gartenberg, a vice president at Interpret, added that Apple was able to get exclusivity for digital music rights of many songs, which gave it a big leg up as the space developed. He said similar moves by Amazon, if replicated across many titles, could do the same in the new e-publishing industry.
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