Hachette, Amazon Settle Contract Dispute
The specifics of the deal were not disclosed, so we do not know in whose back the hatchet was buried, but in a statement Hachette CEO Michael Pietsch said that "this is great news for writers".
On the face of it the deal would appear to be a win for Hachette, which according to the statement "will have responsibility for setting consumer prices of its ebooks". Curiously, the statement goes on to say that the publisher "will also benefit from better terms when it delivers lower prices for readers".
The new terms will go into effect in early 2015, but Hachette CEO Michael Pietsch also said in a letter to authors (scroll down) that " 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".
In short, it looks like Hachette has signed a deal very similar to the one signed by Simon & Schuster a few weeks ago. The details for that deal were not publicly disclosed either, but pundits parsed out what little was said by Amazon and S&S and concluded that that contract likely resembled the terms offered for KDP, where Amazon offers better terms for ebooks priced between $9.99 and $2.99.
So Hachette went through 8 months of financial pain (as Amazon stopped providing services which were no longer covered under a contract), and undertook a vicious media campaign, and all they got was a contract that S&S got through negotiating patiently and honestly.
The letter from Plietsch:
Dear Authors and Agents,
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.
The new agreement delivers considerable benefits. It gives us full responsibility for the consumer prices of our ebooks. This approach, known as the Agency model, protects the value of our authors’ content, while allowing the publisher to change ebook prices dynamically to maximize sales. Importantly, the percent of revenue on which Hachette authors’ ebook royalties are based will not decrease under this agreement.
Throughout our negotiations, Hachette has strived to reach an agreement that is in the long-term interest of our authors, readers, and this company. The past several months have been difficult ones for the writers Hachette publishes and the agents who represent them. We send our sincere thanks to you for your patience and support as we conducted this negotiation. I feel strongly that this new contract reestablishes our positive relationship with Amazon, an important retailer and industry leader, and that this strong relationship will benefit the writers we publish for many years to come.
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