James Franco signs first-novel deal with Amazon

James Franco, pictured in the film 127 Hours, is the latest big Hollywood name to sign with Amazon (AP/CHUCK ZLOTNICK/ FOX SEARCHLIGHT)

Who needs publishers? Not James Franco, the artsy Hollywood star who has just signed a deal to write his first novel; and not Amazon, the vast online retailer which beat the traditional giants of the industry to secure the high-profile author.

Franco, 33, has become the latest in a string of big names to join the increasingly glamorous stable of authors now on the payroll of Amazon. According to reports, his book, which has the working title Actors Anonymous, will be loosely based on his career in the film industry.

The deal, reported yesterday but yet to be formally confirmed by either side, represents an ominous development for the industry, which in recent months has seen similar deals signed by the likes of New Age "guru" Deepak Chopra, self-help writer Timothy Ferriss, and the actor and director Penny Marshall.

For years, the rise of Amazon has been eating into the profit margins enjoyed by mainstream publishers. There are growing fears that the online giant could soon send their industry the way of the high-street bookstore.

Since it was unveiled last year, Amazon's publishing arm has launched an array of imprints majoring on genres from science fiction to romance, and has already released more than 100 new titles, in hardback, paperback and electronic formats. It has also shown itself willing to pay huge sums to secure the services of those it considers to be the stars of the writing profession. Chopra's deal, for the rights to a memoir co-authored by his sibling Sanjiv – and called Brotherhood: A Tale of Faith, Big Dreams and the Power of Persistence – was reportedly for more than $500,000.

Robert Gottlieb, the literary agent who negotiated the contract, described it as a "game-changer for the publishing industry". It came at the expense of Crown, the mainstream publisher which has for years looked after Chopra's hugely lucrative literary interests.

Franco's deal, first reported by the New York Observer on Tuesday, separates the actor from Scribner, which published a book of his short stories called Palo Alto only last year.