In its second-largest acquisition, Amazon buys the company for $970 million.
The distributor says Amazon proposed new terms that would have cut publishers’ margins.
Amazon.com Inc. pulled 5,000 Kindle e-book titles from its library this week when the online retailer and the book distributor representing those titles couldn’t come to an agreement on how much money each group would get from the sale of digital books, the distributor says.
The book distributor, Independent Publishers Group, says Amazon proposed new financial terms when the distributor’s contract came up for renewal recently. Mark Suchomel, president of Independent Publishers Group, says the new terms would have changed substantially the revenue the publishers it represents get from the sale of e-books. “It’s obvious that publisher’s can’t continue to agree to terms that increasingly reduce already narrow margins,” Suchomel wrote in an e-mail to IPG clients. “I’m not sure what has changed at Amazon over the last few months that they now find it unacceptable to buy from IPG at terms that are acceptable to our other customers,” he says. He does not say what terms Amazon proposed. Amazon and Apple Inc., which also sells e-books, typically have struck deals with publishers to sell books for a 30% commission.
Amazon, No. 1 in Internet Retailer’s Top 500 Guide, did not respond to inquiries about the dispute.
Print versions of book titles distributed by IPG remain for sale on Amazon.com.