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You are here: MacNN Forums > News > Tech News > Amazon and Hachette battle ends amicably with e-book sales deal

Amazon and Hachette battle ends amicably with e-book sales deal
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NewsPoster
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Nov 13, 2014, 01:15 PM
 
The long-running and rancorous dispute between publisher Hachette and Amazon seems to be over. Both companies have announced that a deal has been struck, with Hachette being able to set prices on the 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 claimed the issues with negotiations was on the "behalf of customers," with the strongarm tactics of removing Hachette book from sale as being an "essential business practice" critical to "keeping service and value high for customers in the medium and long term." Authors and Amazon customers widely decried the tactic as bullying.

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, thus allegedly more than making up for the 50 percent price reduction. The study was widely derided as applying to, at best, only the most popular and best-selling authors, while preventing new and unknown authors from reaching the market.

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 that goes 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."

By: Paul Rachwal
( Last edited by NewsPoster; Nov 20, 2014 at 05:05 PM. )
     
lockhartt
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Nov 13, 2014, 01:19 PM
 
Hold on a minute... if Hachette can set their own prices, does this not create the very scenario Amazon cried foul over - causing the DoJ to investigate Apple? You can't have your cake and eat it too.
     
Mike Wuerthele
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Nov 13, 2014, 01:25 PM
 
Details on the terms of the actual deal aren't available. I suspect that there are significant restrictions.
     
prl99
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Nov 13, 2014, 03:06 PM
 
I bet details will be investigated at Apple's insistence. Apple should be able to supeona them during their appeal.
     
Charles Martin
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Nov 13, 2014, 09:09 PM
 
Given that the DOJ have, to this point, taken absolutely no notice of Amazon's numerous abuses, I don't expect they will suddenly start now.
Charles Martin
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lockhartt
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Nov 14, 2014, 01:18 PM
 
@Charles Martin - Sad... but probably true. Apparently, if your company continues to operate without ever making any significant profit, it's Ok to break the rules; whereas, if you are actually making money, then we'll tear you a new one. Of course, Microsoft effectively got off with a slap on the wrist... so, not really a matter of not making money, either. Starts to feel a bit personal.
     
chimaera
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Nov 14, 2014, 03:08 PM
 
Originally Posted by NewsPoster View Post
Other specific terms of the deal have not yet been made public, and will not likely ever face public scrutiny ...
Typical. Does anyone else dream of a public interest right to see such deals? Where citizens could sue for an agreement affecting the public, if it had drawn widespread media coverage.

This dispute had large ads taken out in the New York Times, and may affect book prices for years to come. Of the three parties affected (Amazon, Hachette, consumers) we're the ones who buy the books, and the only party who doesn't see the terms.
     
   
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