Amazon and Simon & Schuster reach a deal on internet book sales

Amazon just found a way to put further pressure on Hachette in its ongoing pricing war: strike a deal with another publisher. The online retailer has forged a new agreement with Simon & Schuster that will keep the book giant's digital and physical titles on Amazon for multiple years. The full terms of the deal aren't available, but the Wall Street Journal claims that it reaches a middle ground; Simon & Schuster will normally set prices, while Amazon will have the right to discount books in some situations. However it works, both sides are claiming it as a victory. Amazon argues that it gives the publisher a "financial incentive" to drop prices, while a letter from Simon & Schuster describes the pact as "economically advantageous" for both itself and authors.

While this is good news if you're shopping for the latest Colm Toibin novel, the deal comes across as an iron fist in a velvet glove -- it's a reminder for Hachette about the consequences of refusing to fall in line. Simon & Schuster is keen to tout "continuous availability" of books as a perk of the deal, and the WSJ adds that Amazon will make sure those titles are "well promoted." If Hachette doesn't compromise, it won't have either the reliable inventory levels or product positioning needed to thrive this holiday shopping season. Hachette hasn't commented on the Simon & Schuster contract, but the odds are that it isn't happy about being backed into a corner.