Coverage: Amazon ends book dispute

Just in time for the holidays, Amazon has ended its fight with publisher Hachette. The move will bring Hachette’s writers to millions of ebook readers just in time for gift giving.

The New York Times story by David Streitfeld had these details, which were few, about the deal:

Amazon and Hachette announced Thursday that they had resolved their differences and signed a new multiyear contract, bringing an official end to a publishing dispute that blossomed into a major cultural and business brawl.

Neither side gave details of the deal, but both pronounced themselves happy with the terms. Hachette, the fourth largest publisher, won the ability to set the prices for its e-books, which was a major contention in the fight.

“This is great news for writers,” Michael Pietsch, Hachette’s chief executive, said in a statement. An Amazon executive, David Naggar, said Amazon was “pleased with this new agreement as it includes specific financial incentives for Hachette to deliver lower prices.”

The agreement broadly follows a deal Amazon recently worked out with Simon & Schuster, which the publisher said it was pleased with.

What began as a negotiating standoff between supplier and retailer — completely routine, Amazon insisted — became a highly public conflict. Depending on which side you were rooting for, it was a struggle between the future and the past, the East Coast and the West Coast, culture and commerce, the masses and the elite, technologists and traditionalists, predators and prey.

Jeffrey A. Trachtenberg and Greg Bensinger wrote for The Wall Street Journal about the background of the months-long argument, which had many writers concerned about books sales:

As the seven-month battle dragged on, Amazon took steps that were heavily criticized by some authors, including removing preorder buttons on Hachette titles and delaying shipment of some books. Preorders are often key to catapulting books onto the national best-seller list. Those lists, in turn, often drive sales.

Amazon said on Thursday it has resumed treating Hachette titles as it did before the dispute.

The development, coming only a few weeks before the kick-off of the holiday season, is welcome news for Hachette writers, whose ranks include James Patterson, Michael Connelly, and J.K. Rowling.

“I’m happy, because I’ve got a book coming out in January and I was concerned that Amazon might not promote it or make it available,” said George Pelecanos, a leading Hachette crime writer whose next book, “The Martini Shot,” is being published in early January by Little, Brown, a Hachette imprint. “This puts my mind at ease.”

“It’s a victory for Hachette in that they get to set the consumer prices of their e-books, while Amazon wins in that it has given Hachette an incentive to keep prices lower,” said James McQuivey, an analyst with Forrester Research. “This deal should have been done a lot earlier. Emotions took over, and they both began talking like they were protecting the free world.”

The battle between Amazon and Hachette began in early May and quickly intensified. Amazon wanted Hachette to set its e-book prices at $9.99 each, generally, saying that would prompt the most sales. Hachette dug in its heels, though, refusing to let Amazon dictate prices, saying e-books carry costs like marketing and editing that need to be accounted for.

Amazon is so important for writers that many launched a campaign to get back on the retailer’s site, CNET wrote in a story by Nick Statt and Donna Tam:

The resolution marks a rare victory for the publishing industry, which has struggled as more people buy relatively inexpensive e-books distributed over the Internet. Amazon controls, by some estimates, a third of the entire book market and more than half of the e-book market, thanks to its Kindle platform. That share has given Amazon enormous clout in its negotiations with publishers.

Hachette appears to have brokered a compromise with the e-commerce giant. Amazon 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,” Dave Naggar, Amazon’s vice president of Kindle, said in the statement.

Amazon and Hachette declined further comment.

Authors began a campaign to resolve the dispute in their favor. Douglas Preston, a New England-based writer of thrillers, took out a full-page ad in The New York Times in August condemning Amazon’s actions. Authors United, comprising of more than 1,100 writers — including John Grisham, Malcolm Gladwell and Philip Roth — sent a letter complaining about Amazon’s practices to Amazon’s board. The group also asked the Justice Department to investigate Amazon for monopolistic behavior.

USA Today reported in a story by Jocelyn McClurg that the new terms would begin in the new year:

“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 e-book terms will take effect early in 2015.

According to the release, Hachette will have responsibility for setting consumer prices of its e-books, and will also benefit from better terms when it delivers lower prices for readers. The release also said Hachette books will be prominently featured in Amazon promotions.

The move is a good one for authors since it will help them remain competitive, particularly through the busiest buying time of the year. It’s also a win for consumers who will be able to get the text they want delivered however they like. It seems like Hachette had to give in ultimately, but by waging a public battle, it did bring the payment issue to the front of consumers’ minds – at least for a bit.