- Associated Press - Thursday, July 22, 2010

NEW YORK (AP) - It’s war between Random House Inc. and a top literacy agency.

Random House, the country’s leading trade publisher, announced Thursday that it would conduct no new English-language business with the Wylie Agency, which earlier in the day launched an e-book line that would release works by John Updike, Salman Rushdie and other Random authors through online retailer Amazon.com Inc.

“The Wylie Agency’s decision to sell e-books exclusively to Amazon for titles which are subject to active Random House agreements undermines our longstanding commitments to and investments in our authors, and it establishes this Agency as our direct competitor,” Random House spokesman Stuart Applebaum said in a statement.

“Therefore, regrettably, Random House on a worldwide basis will not be entering into any new English-language business agreements with the Wylie Agency until this situation is resolved.”

An assistant to agency head Andrew Wylie said he was out of the country and had no immediate comment.

The standoff is the most dramatic yet in the dispute over what agents and authors want to receive and what publishers are willing to pay for e-books, an increasingly vital market. Updike’s four “Rabbit” novels and Rushdie’s “Midnight’s Children” are among the 20 famous works coming out for the first time in electronic form, not through a traditional publisher, but through Odyssey Editions, founded by the Wylie agency, where clients include the estates of Updike and Saul Bellow and such living authors as Rushdie and Philip Roth.

The books will be sold exclusively through Amazon.com, the leading e-book seller.

“As the market for e-books grows, it will be important for readers to have access in e-book format to the best contemporary literature the world has to offer,” Wylie said in a statement Thursday. “This publishing program is designed to address that need, and to help e-book readers build a digital library of classic contemporary literature.”

Not all of the Odyssey books are from Random House. Bellow’s “The Adventures of Augie March” and William Burroughs’ “Junky” are Penguin Group (USA) releases. Oliver Sacks’ “The Man Who Mistook His Wife for a Hat” was published by Simon & Schuster. Representatives for Simon & Schuster and Penguin declined comment.

Financial terms were not disclosed, but author royalties surely will be higher than the 25 percent usually offered by publishers for e-books. Agents and authors, citing the low production costs of electronic texts, have been asking for 50 percent. With the Internet enabling virtually anyone with a computer to become a publisher, Wylie had long threatened to break the impasse by releasing the books himself.

“I think he’s a visionary,” said literary agent Ira Silverberg of Sterling Lord Literistic Inc. “Many of us have talked about starting such an endeavor and Andrew, of course, put his incredible business acumen to work far earlier than the rest.”

“As e-book sales continue to grow and platform and distribution options continue to evolve, the role of the agent as a provider of full service to their clients is going to have to evolve with it,” said Steve Ross, a former publisher and now an agent with Abrams Artists Agency.

Odyssey Editions is the latest e-company to attract authors by offering higher royalties. Open Road Integrated Media, co-founded last year by former HarperCollins CEO Jane Friedman, publishes e-books of works by William Styron and Iris Murdoch. RosettaBooks is releasing the e-version of Steven Covey’s best-selling “The 7 Habits of Highly Effective People.”

Wylie’s new enterprise is a daring, risky move for an agent long known for aggressively pursuing big name writers. Even before Random House’s decision, Wylie was challenged by publishers and even some peers about the possible conflicts of interest of an agent both acquiring and publishing a given book. “For agents to switch hats and become buyers is an extremely difficult thing to do,” says literary agent Richard Curtis, who also runs a publishing line. And CEO John Sargent of Macmillan, a leading publisher, said he was “appalled” by Wylie’s decision to sell only through Amazon.

“I understand why Amazon wants an exclusive deal with Andrew,” Sargent wrote Thursday on his blog. “They have asked us too for exclusive product, as has every major retailer we deal with. This is smart retailing, and a great deal for Amazon. But it is an extraordinarily bad deal for writers, illustrators, publishers, other booksellers, and for anyone who believes that books should be as widely available as possible.”

Wylie’s announcement also continues a tense and occasionally litigious territorial dispute between publishers and authors and agents: Control of rights to older books published before the e-book era, especially when contracts don’t refer specifically to electric settings. In a statement earlier Thursday, Applebaum said the publisher sent a letter to Amazon “disputing their rights to legally sell these titles, which are subject to active Random House publishing agreements.”

Other works from Odyssey include Vladimir Nabokov’s “Lolita,” Roth’s “Portnoy’s Complaint” and Martin Amis’ “London Fields.” Odyssey also is publishing an e-edition of John Cheever’s collected stories. Cheever’s daughter, author Susan Cheever, wonders if he would have approved.

“I think he would have been torn,” she says of her late father. “He was a tremendously loyal man who famously stayed at The New Yorker even when they weren’t doing right by him. He had very good feelings about Knopf and Random house, with good reason.

“But in principle, I’m all for writers getting the largest percentage possible for their work.”