After a months-long public battle, Amazon and book publisher Hachette have patched things up and signed a new, multiyear agreement. Specific terms of their new deal aren't being disclosed, but Hachette claims it's got full control over ebook pricing. "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," CEO Michael Pietsch told Hachette authors by email. (CNN reporter Brian Stelter has posted the full letter.)
Hachette keeps the publisher-friendly agency model
The updated pact won't take effect until early 2015, but Hachette claims Amazon will soon restore normal supply levels of Hachette-published books and once again offer them for pre-order. During the face-off, Amazon had pushed for a bigger cut of revenues — all while pressuring Hachette to keep its ebooks priced at $9.99 and below. As negotiations stalled out, the powerful online seller put a bottleneck on its stock of Hachette-published titles, leading to significant delays that impacted a massive roster of authors.
As their feud spilled out into the public eye, each side tried to rally authors and the public. Amazon insisted that Hachette favored "unjustifiably high" ebook prices between $14.99 and $19.99, while Hachette painted Amazon as an overbearing bully. For its part, Amazon says the new pact contains "financial incentives" that will encourage Hachette to keep ebooks affordable for its many Kindle customers. Hachette wasn't alone in its frustration with Amazon; Simon & Schuster went through its own volatile negotiation period with the leading bookseller. It too recently managed to strike a new deal with Amazon.