Amazon.com's exclusive e-book deal with literary agent riles publishers

As e-books upset the publishing industry’s applecart, an announcement by the Wylie Agency Thursday that it would bypass publishers and sell e-books exclusively to Amazon.com for two years is sure to make people talk.

For Amazon, the deal helps ensure that its Kindle e-reader has a supply of books only available on its device. During his company’s quarterly earnings call Thursday afternoon, Amazon.com CEO Jeff Bezos confidently announced that the company is now selling more Kindle books than hardcover books.  Though Kindle sales are growing substantially, several analysts pegged increased e-reader competition as one of the culprits responsible for an earnings shortfall.

Random House, one of the Wylie Agency’s print publishers, followed the Amazon-Wylie announcement with a statement declaring that it would no longer conduct any new English-language business with the Wylie Agency.

The retaliatory move shows how fraught the business of e-books has become, as authors, agents, publishers, device makers, and retailers maneuver for advantage and try to reshape the division of profits in the publishing industry.

During the past few months, with the launch of the iPad, Kindle sales growth and news that Google will launch an online book business, the traditional publishing industry business model has come under attack.   Authors are demanding a higher percentage of e-book sales while publishers are trying to justify their worth in digital distribution.

While authors usually receive 25 percent of royalties on e-book sales, they reason that, because of lower costs and lower prices on e-books, that number should be closer to 50 percent.

The Wylie Agency has set up a new company called Odyssey Editions to handle e-book distribution. Andrew Wylie, the company’s founder, had declared his upstart’s intention to sign e-book deals directly, without help from publishers, in an interview with Harvard Magazine.