Amazon and Hachette Strike Deal to War Over E-Book Sales

Posted by at 2:25 pm on November 13, 2014

The dispute between publisher Hachette and Amazon seems to have concluded. Both companies have announced that a deal has been struck, with Hachette being able to set prices on e-books that it sells. Other specific terms of the deal have not yet been made public, and will not likely ever face public scrutiny outside the publishing industry.

Amazon representative David Naggar said of the deal that the company is “pleased with this new agreement as it includes specific financial incentives for Hachette to deliver lower prices, which we believe will be a great win for readers and authors alike.”

Amazon claimed during the dispute that its sales-limiting actions did not affect 989 out of 1,000 items sold, while also suggesting those requiring Hachette books quickly to “purchase a new or used version from one of our third-party sellers or from one of our competitors.” Amazon claims the issues with negotiations is on the “behalf of customers,” with the term negotiations being an “essential business practice” critical to “keeping service and value high for customers in the medium and long term.”

Hachette CEO Michael Pietsch calls the arrangement “great news for writers.” Pietsch says that “the new agreement will benefit Hachette authors for years to come. It gives Hachette enormous marketing capability with one of our most important bookselling partners.”

A blog post by Amazon pointed out that “production and distribution” cost of an e-book is significantly lower than that of a printed hardcover. However, it neglected to mention that e-book prices already generally range from one-third to one-half the cost of a printed book in most cases, and can often be as little as one-fourth the list price of a new hardcover. It cited its own studies, which proved that compared to an e-book costing $15 (a bit higher than average for an e-book across all digital marketplaces Electronista looked at), the same book priced at $10 would sell 1.74 copies for every one copy at the higher price.

A coalitition of best-selling authors have said that if e-book prices continue to fall as their popularity rises, authors will be unable to afford the investment of years and effort into creating a high-quality work due to the difficulty in achieving a true “profit” in the relatively short window most books enjoy their top sales figures. Over 900 authors recently signed a letter urging Amazon to stop using “thuggish” tactics against publishers by withholding sales, which hurts the authors and readers more than the publishers. For their trouble, Amazon called the lead author of the effort “entitled” and “an opportunist.”

 

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