ANDREW WYLIE is a famously shrewd literary agent, having acquired his nickname, “The Jackal”, as a result of his ability to negotiate unusually large advances from publishers for the authors he represents. Not surprisingly, this has helped him build up a roster of clients that includes many leading writers (he represents, among others, Salman Rushdie, Philip Roth, the estate of John Updike and several Economist writers, including the editor). So Mr Wylie's announcement last week of a deal with Amazon to publish electronic versions of books by several of his authors has understandably been viewed by the traditional publishers that he will bypass as a declaration of war.

Mr Wylie is starting by publishing electronic versions of some classics, such as Mr Roth's “Portnoy's Complaint” and Updike's “Rabbit” novels. Some publishers argue that they own the electronic rights to such classics, under contracts signed before anyone thought there would be electronic books—an ownership claim that authors and their agents vigorously dispute. Random House, one of the giants of book publishing, reacted to Mr Wylie's move by announcing that it now regards the Wylie Agency as a competitor, and that “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.” Random House's move was backed by HarperCollins UK, a book-publishing division of News Corp.

Not surprisingly, authors are rallying behind Mr Wylie. On July 26th the Authors Guild issued a statement arguing that “to a large extent, publishers have brought this on themselves.” In particular, in contracts for works produced since agents started discussing royalties for electronic books, publishers have at most been willing to offer authors 25% of net revenues on e-books, compared with the typical 50% split for printed books.

The Authors Guild predicts that low e-book royalties will not last, and publishers are simply playing for time, taking their extra margin while they can. But with Amazon revealing last week that it sold more e-books than hardbacks in its latest quarter, authors will care increasingly about their cut from e-books than from print—and their market power will surely prevail. Marjorie Scardino, the boss of Pearson, a firm which owns several book publishers, including Penguin (and is also part-owner of The Economist), said on July 26th that eventually “we will see a rise in royalty rates.”

Still, Mr Wylie's move may also give authors some grounds for disquiet, as an agent publishing works by those authors he represents gives rise to obvious potential conflicts of interest. As the Authors Guild points out, “a major agency starting a publishing company is weird, no matter how you look at it. This sort of weirdness will only multiply, however, as long as authors don't share fairly in the rewards of electronic publishing. Publishers seeking to manage this transition well should cut authors in appropriately.”

Publishing houses tempted to keep dragging their feet should consider the possibility that they risk losing more than just having to give up a further 25% of net revenues. E-books are fast coming to represent a big share of writers' income: on July 27th Amazon said the late Stieg Larsson, author of the bestselling "Millennium Trilogy" had become the first writer to sell 1m copies on its Kindle e-reader, of which it launched a new, cheaper version this week. And if dealing directly with big e-book sellers like Amazon proves successful, many writers may start to ask themselves whether they still need to sign up with traditional publishers at all.

Read on: Bookstores are struggling but the printed book is still doing fine