Amazon and Simon & Schuster reportedly come to terms over e-books

Amazon and Simon & Schuster have come to terms in negotiations over book sales going forward, according to a report at Publishers Weekly. This arrangement is similar to the negotiations that publisher Hachette and Amazon have been battling over since May.

Although the exact details of the agreement between Simon & Schuster and Amazon have not been revealed, it is thought that the publisher and bookseller will move to an agency model for e-books beginning Jan 1.

Traditionally, publishers sold e-books to Amazon differently, using a wholesale model. The publisher would set the wholesale price and then the bookseller would set the retail price. When this was the only model, Amazon often set its retail e-book prices at below wholesale, $9.99.

Publishers and retailers moved to an agency model when Apple launched the iPad and iBookstore. The agency model, based on Apple’s retail model in iTunes, allows publishers to set the end price for ebooks, from which retailers took a fixed percentage.

Agreeing to the agency model prompted the Department of Justice to sue Apple and the five major publishers that were on board, saying that they had illegally cooperated to set prices. The publishers settled before trial; Apple went to court and lost (the company is appealing).

After the suit, Amazon had publishers return to a wholesale model.

For Simon & Schuster and Amazon to agree to new agency-style terms is, for industry-watchers, quite interesting.

Hachette’s dispute with Amazon over e-book pricing is ongoing.

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