Hachette and Amazon Bury the Hatchet

05-09hachette_full_600Hachette announces today it has concluded a new “multi-year” contract with Amazon, ending the standoff that has captured the industry’s attention since May of this year.

The agreement covers print and ebook distribution and will take effect early next year.

Much like Simon & Schuster, which struck a deal with Amazon last month–in a development many saw as increasing the pressure on Hachette to do the same–Hachette’s new agreement allows the publisher to set prices on its ebooks. That means a return–likely to be limited by the specific terms of the deal–to agency pricing.

In its statement today, Hachette appears to have gained that right by compromising, at least to a certain extent, on one of the key sticking points in its standoff with Amazon: lower prices. The new agreement, the statement says, “includes specific financial incentives for Hachette to deliver lower prices,” something the publisher voiced strong objections to earlier this year.

Nevertheless, both sides say they are pleased with the agreement, and Hachette affirms that it “is great news for writers” and readers alike.

Normal business between the publisher and Amazon is said to resume immediately.

[Press Release]

HACHETTE BOOK GROUP AND AMAZON REACH NEW EBOOK AND PRINT BOOK AGREEMENT

November 13, 2014 – Hachette Book Group and Amazon (AMZN) today announced that the companies have reached a new, multi-year agreement for ebook and print sales in the US.

Michael Pietsch, Hachette Book Group CEO said, “This is great news for writers. 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.”

“We are 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,” said David Naggar, Vice President, Kindle.

The new ebook terms will take effect early in 2015. Hachette will have responsibility for setting consumer prices of its ebooks, and will also benefit from better terms when it delivers lower prices for readers. Amazon and Hachette will immediately resume normal trading, and Hachette books will be prominently featured in promotions.

About Hachette Book Group:
Hachette Book Group is a leading trade publisher based in New York and a division of Hachette Livre, the third-largest trade and educational publisher in the world. HBG publishes under the divisions of Little, Brown and Company, Little Brown Books for Young Readers, Grand Central Publishing, Orbit, Hachette Books, Hachette Nashville, and Hachette Audio.

About Amazon:
Amazon.com opened on the World Wide Web in July 1995. The company is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire phone, Fire tablets, and Fire TV are some of the products and services pioneered by Amazon.

2 thoughts on “Hachette and Amazon Bury the Hatchet

  1. Michael W. Perry

    My hunch is that Amazon’s win, other than ending this public relations disaster, may lie in details that have Amazon making more money from the online equivalent of the large book displays you see at the entrance to a B&N megastore. Amazon doesn’t really benefit from lower retail prices, since other retailers will have those same prices. It would benefit from promotional kickbacks smaller online stores may not be able to demand.

    That means that, rather than have sales drive visibility on Amazon, the larger publishers will pay for more visibility on webpages and still more deception in Amazon search results than currently exist. Those who pay Amazon move up the search results. Those who don’t pay may disappear altogether. As one Amazon software developer told me, “Never trust Amazon search.” If you want to find something on Amazon, Google is better than Amazon’s own search engine.

    That’s likely to be a wash for the large publishers who pay but get more sales. The real losers will be smaller publishers and independent authors. Visibility is a zero-sum game. The attention that the Big Five publishers pay to get for their books will be attention that isn’t directed at books from others. As a place to sell books from all sources, Amazon will become even more unfair and inequitable.

    I do think Hachette also benefited from Simon & Schuster’s clout to win better terms. That illustrates a message I’ve been trying to get across to authors. Amazon isn’t an independent author’s friend. They’ll never get a better deal than the one Amazon gives the major publishers. That’s why they should support Hachette in this dispute.

    One added comment. As Amazon’s public available terms for small publishers and independent authors make clear, Amazon is not interested in lower prices for consumers. Amazon brutally punishes authors who price their ebooks below $2.99, paying only half as much in royalties. It also punishes specialized book with limited markets by paying that same miserly rate for ebooks price over $9.99.

    The most charitable thing that can be said about Amazon’s public royalty scheme is that it flows from an utter ignorance, from Jeff Bezos and his wife on down, of the complexities of books. For them, a book seems to mean little more than a NYT bestselling novel. Amazon wants the ebook price to be under $9.99 so they can steal print-version business away from traditional bookstores. It hates to see ebooks priced under $2.99 because it makes less profit from them. At no point in that reasoning process is a concern for consumer, much less authors or publishers.

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  2. Theresa M. Moore

    All this tells me is that the last nine months have been a waste of time and energy, with no benefit gained for an independent publisher. I will still not deal with Amazon for ebook sales because I never received enough net revenues from Amazon which convinced me that Amazon was the great retailer it claimed to be. I still make more money from the other actual booksellers than I ever did with Amazon. So I am not impressed with the parties in the dispute returning to business as usual. As far as Amazon is concerned a book is just a widget, and if it could get away with sourcing the ebooks the way they do the other kinds of products over the protests of retailers using its services to sell them it would. But the corporation does not have the ability or the knowledge to write a book, much less promote the social benefit it deserves, so I don’t plan on going back anytime soon.

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