Amazon and Hachette have resolved a contentious contract battle that caught readers and authors in the crossfire for months.
Neither company is talking specifics, but the New York Times reports that Hachette will get the ability to set its own ebook prices. At the same time, Amazon will offer specific financial incentives for Hachette to sell books at lower prices.
E-book pricing was seen as the central issue in the dispute, and while the companies initially kept the nature of their disagreements secret, a bit of public posturing took shape on both sides as the battle wore on. In July, Amazon posted a letter arguing that lower prices are better for everyone, because higher sales make up the difference in revenue. Hachette eventually issued its own public response in defense of its pricing, as authors banded together with a full-page anti-Amazon ad in the Times.
Meanwhile, readers and authors felt the effects, as Amazon started playing hardball soon after the dispute broke out in May. The retailer stopped taking preorders on Hachette books and carried fewer physical copies in its warehouses, leading to shipment delays. Amazon also stopped offering discounts on many Hachette titles, all the while encouraging customers to shop elsewhere.
Now that the Hachette and Amazon have come to terms, readers and writers should start feeling some relief. As Publishers Lunch has reported, Amazon has already restored some preorders and discounts on Hachette books.
Why this matters: Beyond just financially hurting authors and leaving readers in the lurch, the dispute raised questions about Amazon's immense market power in dealing with publishers. It also polarized writers and left Hachette in the awkward position of defending higher prices. Even as Amazon's storefront returns to normal, the bruises on all sides aren't likely to heal anytime soon.