14 DAY TRIAL // The long battle between Amazon and book publisher Hachette has come to an end of sorts as the two have reached an agreement.
CNN reports that the news comes from Michael Pietsch, Hachette’s CEO, who sent an email to authors signed with the publisher.
As you may know by now, Amazon was unhappy with the fact that Hachette was selling its e-books for high prices. The company considers that since the production costs are extremely low for electronic books, there’s no reason for them to be sold for more than $9.99 (€8.01).
Amazon refused to accept pre-orders for various Hachette titles, removed discounts for some of the books, and slowed down the delivery process for people looking to buy books from this publisher.
Hachette said that individual books didn’t bring immediate revenue for the publisher or the author and tried to keep its prices up. Now that the two companies have settled their differences, it seems like Hachette has the upper hand, winning the ability to set its own prices for e-books.
“I’m very happy to bring you the good news that Hachette Book Group has reached a new agreement with Amazon for ebook and print sales. While the new ebook terms will take effect early in 2015, Hachette titles will be restored as soon as possible to normal availability on Amazon, will be available for pre-order, and will be included in promotions on the site, a very positive development as we head into the holiday shopping season,” reads the email Pietsch sent.
Even so, there’s no time for celebration, especially since it’s been some ten months since the conflict began.
The Agency model
According to the Hachette CEO, the new agreement delivers some benefits. On one side, it gives the publisher full responsibility for the consumer prices of the e-books, which is known as the Agency model. This protects the value of the authors’ content, while allowing the publisher to change e-book prices dynamically to maximize sales.
Pietsch believes that the new understanding restores the positive relationship with Amazon, which is a big retailer and industry leader.
Unfortunately, this agreement may be beneficial to the publisher, but not so much for buyers. E-books have very little production costs, since they’re not printed on paper, wrapped in an expensive cover or distributed nationally and internationally.
Hachette’s resistance towards a price change also shows that they’re resisting the changes technology brings to the industry. While e-books are not everyone’s go-to format, they are extremely popular nowadays and they’re only going to get more popular in the years to come.
