Amazon wins exclusive deal for Stephen Covey e-books

By Tech IDG.net

Business author Stephen Covey's decision to make Amazon.com the exclusive seller of several of his e-books for at least a year could well be the start of a trend by other popular authors.

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Amazon on Monday announced that Covey's The 7 Habits of Highly Effective People and Principle-Centered Leadership were available exclusively at the Amazon Kindle Store for $7.99 each. A spokeswoman for FranklinCovey Co., representing Covey, today said the exclusive e-book arrangement with Amazon is for one year, but could be extended.

"I'm sure we'll be successful [with Amazon], and could continue" beyond a year, the spokeswoman said. Today, Great Work, Great Career , a book published by FranklinCovey and co-authored by Covey, will also be offered exclusively as an e-book through Amazon, she added, (although the Amazon.com site indicated it was still on pre-order until Thursday.)

It is the first time the "7 Habits" and Principle-centered Leadership titles are available as e-books . Covey has worked with Simon & Schuster as the publisher of the titles in both paperback and hardcover. "7 Habits" first appeared in 1989 and continues to sell steadily, and Simon & Schuster will continue to offer Covey's titles in paper and hardcover.

Analysts have been watching to see whether popular authors would seek out e-book deals, partly because doing so would require an author to forgo the advance payment usually offered in the mainstream publishing world. Authors can be held back from third-party e-book deals due to contractual agreements with traditional publishers.

But Covey will be taking in more than half of the net proceeds on e-book sales through Amazon.com for "7 Habits" as well as "Principle-Centered Leadership" and other books he has written, according to an official at RosettaBooks, the e-book publisher working with Covey on the Amazon deal, who was quoted in the New York Times .

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Getting more than half the proceeds would be a feather in Covey's cap, since royalties ordinarily are 25% of net revenues in mainstream publishing, analysts said.

The financial incentive Covey won with Amazon will certainly attract other well-known authors to consider e-book deals, and probably exclusive e-book deals, said Mike Shatzkin, CEO of Idea Logical Co., a consulting firm on digital publishing for book and journal publishers.

"A lot more authors will do this, yes," Shatzkin said in an interview today. "You can expect Covey's move to be imitated."

Covey's move will tempt other authors, although some who are not as well off will still want a book advance, Shatzkin said. "Stephen Covey is a rich man and probably doesn't need the advance," he added.

While many companies are offering e-readers and e-books in various formats, Amazon is probably garnering 80% of the e-book market so far, Shatzkin estimated. As such, it made sense for Covey to work with the online retailer exclusively. "By going exclusive with Amazon, he's not giving up much with the other 20%."

However, Gartner Inc. analyst Allen Weiner said he was "somewhat puzzled by what looks to be a very bad business move from a business writer." He said Covey must be assuming that it can't hurt to engage Amazon.com in a one-year deal, since it might take some time for other e-readers to catch up with the success of the Kindle.

While traditional publishers have argued that their contracts preclude authors from publishing e-books with third parties, Shatzkin said he doubts Simon & Schuster will actively oppose the Amazon deal with Covey. "Simon & Schuster want to get along, since Covey represents a lot of sales for them," Shatzkin said. "You don't throw the baby out with the bathwater."

Shatzkin said it is probably too early to tell whether exclusive e-book deals by Amazon or others could hurt consumers of e-books. Most of Amazon.com's e-book bestsellers go for $9.99 via the Kindle, so the $7.99 price for Covey's books is a savings. However, Amazon also was selling the paperback version of "7 Habits" online for $9.32 today.

The downside with an exclusive deal is that owners of other e-readers that competer with the Kindle won't have access to the Amazon Kindle Store or or Covey's e-book. Amazon is trying to expand its e-book repository to include access from other devices, such as the Kindle for iPhone and the Kindle for PC.

The exclusive deal with Covey puts Amazon in a stronger position than competitors, although many e-book formats and e-readers will hit the market in 2010 to challenge Amazon's dominance, Shatzkin said. "Amazon's hegemony in the e-book market won't last, but it will be a major player for a while," he said.

"The Kindle certainly is a beatable device, but the device is only one component of success. Amazon is very good at online merchandising and has the most dedicated online readers ... and has the ability to present the content in a way that is easy to navigate and shop for," he added.

Matt Hamblen covers mobile and wireless, smart phones and other handhelds and wireless networking for Computerworld . Follow Matt on Twitter @matthamblen , send e-mail at mhamblen@computerworld.com or subscribe to Matt's RSS feed .

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