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article imageAmazon, Hachette reach new deal after months-long dispute

By Andrew Ellis     Nov 14, 2014 in Business
After a high-profile fight during contract negotiations, Amazon and Hachette Book Group have finally come to an agreement.
The news was announced yesterday, Thursday, November 13, after Amazon founder Jeff Bezos and other company executives held a board meeting in Las Vegas on November 12, according to Yahoo Finance.
The dispute between Hachette — part of the France-based Lagardee SCA — and Amazon started early this year when they met with Amazon executives to negotiate a new contract. At the center of the negotiations, and the public argument, was who controlled the rights to set the prices for the publishing group's e-books on Amazon.
The Yahoo Finance article reports that as the dispute raged on, and was called attention to by Hachette authors such as TV personality Stephen Colbert, Amazon started delaying orders of the group's books to customers, and even took away pre-order options for several titles. One of those titles was Silkworm, written by J.K. Rowling under the pen name Robert Galbraith.
Upon hearing the news, Hachette author Dougles Presto, who launched a campaign against Amazon during the dispute, wrote via email to Yahoo News that he was relieved by the news. He also hopes that "if disagreements arise in the future between Amazon and publishers, Amazon will never again seek to gain leverage by sanctioning books and hurting authors."
Amazon, who is also the number one e-book seller, hasn't gone without support either. Many self-published authors who have benefited from the retailers' platform backed the online giant, according to Yahoo News, and put the blame on Hachette during the argument.
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In the end, it was Hachette who walked away with the right to set prices for their books, but Amazon executives said the deal gives the publishing house plenty of incentives to keep prices low, according to Yahoo News. Both parties released statements obviously relieved that a deal has been reached, and are happy with the terms of the new contract. No other terms of the contract have been disclosed.
"This is great news for writers," Hachette CEO Michael Pietsch said in a statement, according to the Huffington Post. "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."
Kindle vice president David Naggar released his own statement regarding the new contract, and said how it's great news for all parties involved.
"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," Naggar said, according to the Huffington Post.
Despite both parties being relieved with a deal finally ending the dispute, senior analyst at Forrester Research James McQuivey said the conflict actually hurt both parties in other ways, according to Yahoo Finance.
"They both lost precious months in participating in important book promotions. In the end, they agreed to terms they probably would have earlier," McQuirvey said.
Amazon did indeed issue a report last month that they lost $437 million last quarter, and their stock is down more than 20 percent for the entire year, according the Huffington Post. There was no word, however, on how much of a factor Hachette's book were in those numbers.
The agreement takes affect in early 2015, and Amazon was to start selling Hachette's books immediately, according to Yahoo News, but a couple hours after the announcement several selections from the company's authors were still on delay. But that may be due to an operations aspect of the of the site as the Huffington Post reports that Pietsch sent out a letter to authors saying that their books "will be restored as soon as possible to normal availability on Amazon."
Hachette wasn't the only publishing house negotiating new contracts with Amazon as CBS Corporation's Simon & Schuster reached a new deal back in October. Major New York publishers such as HarperCollins are also in negotiations with Amazon, but Yahoo News reports the expectation is that agreements will be met without conflict.
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