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Top Author Shifts E-Book Rights to Amazon.com

Ever since electronic books emerged as a major growth market, New York’s largest publishing houses have worried that big-name authors might sign deals directly with e-book retailers or other new ventures, bypassing traditional publishers entirely.

Now, one well-known author is doing just that.

Source: Amazon.com

Stephen R. Covey, one of the most successful business authors of the last two decades, has moved e-book rights to two of his best-selling books from his print publisher, Simon & Schuster, a division of the CBS Corporation, to a digital publisher that will sell the e-books to Amazon.com for one year.

Amazon, maker of the popular Kindle e-reader and one of the biggest book retailers in the country, will have the exclusive rights to sell electronic editions of “The 7 Habits of Highly Effective People,” and a later work, “Principle-Centered Leadership.” Mr. Covey also plans to gradually make other e-books available exclusively to Amazon, which will promote them on its Web site.

The move promises to raise the already high anxiety level among publishers about the economics of digital publishing and could offer authors a way to earn more profits from their works than they do under the traditional system.

Mr. Covey is making his books available to Amazon through RosettaBooks, an electronic book publisher that primarily traffics in the older works of authors like Kurt Vonnegut and Virginia Woolf.

Arthur Klebanoff, chief executive of RosettaBooks, said that Mr. Covey would receive more than half of the net proceeds that RosettaBooks took in from Amazon on these e-book sales. In contrast, the standard digital royalty from mainstream publishers is 25 percent of net proceeds.

“There are superstars, and superstars are entitled to more,” Mr. Klebanoff said.

Sean Covey, a son of Mr. Covey and chief innovation officer for Franklin Covey, a training and consulting firm that also publishes business books, said that the higher royalty rate was “a factor” in the decision to switch to RosettaBooks.

The elder Mr. Covey was also particularly attracted by Amazon’s plans to heavily promote the e-book editions of both “7 Habits” and “Principle-Centered Leadership.”

His move comes as publishers ratchet up their efforts to secure the digital rights to so-called backlist titles — books published many years, if not decades, ago. These books can be vitally important to publishing houses because they are reprinted year after year and provide a stream of guaranteed revenue without much extra marketing effort.

“The 7 Habits of Highly Effective People,” originally published in hardcover in 1989, is a steady seller for Simon & Schuster. This year alone, it has sold 136,000 copies in paperback, according to Nielsen BookScan, which generally tracks about 70 percent of sales.

Many authors and agents say that because the contracts for older books do not explicitly spell out electronic rights, they reside with the author. Big publishing houses argue that clauses like “in book form” or phrases that prohibit “competitive editions” preclude authors from publishing e-books through other parties.

Adam Rothberg, a spokesman for Simon & Schuster, declined to comment directly on Mr. Covey’s moves, but said, “Our position is that electronic editions of our backlist titles belong in the Simon & Schuster catalog, and we intend to protect our interests in those publications.”

Other publishers have moved to stake their claim on e-book rights for older titles. On Friday, Random House sent a letter to dozens of literary agents stating that on all backlist books, it retained “the exclusive right to publish in electronic book publishing formats.”

Sean Covey said the decision to publish the e-book editions of the two older titles through RosettaBooks and Amazon was not a result of dissatisfaction with Simon & Schuster. He noted that both he and his father had continued to publish books through Simon & Schuster and would do so in the future.

But the younger Mr. Covey noted that Franklin Covey was also experimenting with self-publishing new books, another way of cutting out the traditional print publisher. In August, the company published “Predictable Results in Unpredictable Times” by Stephen R. Covey, Bob Whitman and Breck England. It released an e-book edition through RosettaBooks and exclusively for the Kindle.

Sean Covey said that his father was co-author of another book, “Great Work, Great Career” that Franklin Covey was self-publishing. Amazon is taking pre-orders for it. That book will also be released in an exclusive Kindle e-book edition.
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