Hachette, Amazon end nasty feud with deal on book sales

Publisher Hachette and online US retailing giant Amazon (above) said Nov 13, 2014 they had reached a deal to end their acrimonious feud over online book sales. After six months in which Amazon clamped down on sales of books by the publisher over its
Publisher Hachette and online US retailing giant Amazon (above) said Nov 13, 2014 they had reached a deal to end their acrimonious feud over online book sales. After six months in which Amazon clamped down on sales of books by the publisher over its website, the two announced a multi-year agreement on ebook and print book sales in the US market. -- PHOTO: AFP

WASHINGTON (AFP) - Publisher Hachette and Amazon ended on Thursday an acrimonious feud over online book sales that highlighted Amazon's market dominance and fuelled protests from leading authors like John Grisham and Stephen King.

After six months in which Amazon clamped down on sales of Hachette Publishing Group books on its website, the two announced a multi-year agreement on ebook and print book sales in the US market.

The spat over who sets retail prices for online sales, especially ebooks, had outraged Hachette authors who saw their book sales sink after Amazon leveraged its power as the largest book retailer in the United States.

The two said the deal would be a plus for both authors and readers, without giving details.

"Amazon and Hachette will immediately resume normal trading, and Hachette books will be prominently featured in promotions," they said in a statement.

Their fight raised issues over Amazon's overwhelming pricing power in the market vis-a-vis both publishers and readers, with the company facing protests not only in the United States but in Europe as well.

But it also highlighted issues surrounding the portion of the retail price that goes to the authors and how that is decided by publishers.

At one point, more than 900 authors, many of them perennial producers of best-sellers, signed a letter urging the two to settle the battle.

And popular comedian Stephen Colbert, a Hachette author, used his late-night television show to call for a boycott of Amazon, quipping that "Because of Amazon's scorched-earth tactics, more people are getting screwed than in 'Fifty Shades of Grey.'"

Such criticisms were effective in steering some book buyers to other online distributors as well as physical stores, though the size of that shift is not clear.

Amazon reported a higher loss in third-quarter earnings released in late October.

But that was blamed mainly on increased spending on new products like Amazon smartphones and television programmes, as well as its fight to retain market share based on low pricing.

The deal Thursday came just in time for the year-end holiday shopping season, important for both companies, as Arnaud Nourry, chief executive of Lagardere Publishing, Hachette's French parent, said Thursday.

"It's Christmas coming, so on both sides, we did it to have a better season," he said in an earnings conference call in France Thursday.

No specific terms for the deal were released, but in a statement the two companies said Hachette will have the responsibility for setting retail prices for ebooks beginning in early 2015.

US-owned Amazon, meanwhile, said Hachette would have incentives to keep its prices low.

"This is great news for writers," said Michael Pietsch, chief executive of Hachette Book Group.

"It gives Hachette enormous marketing capability with one of our most important bookselling partners."

David Naggar, vice-president for Kindle, the ebook unit of Amazon, said incentives for Hachette to hold prices down "will be a great win for readers and authors alike."

Hachette's Nourry said the main point is that "we will decide the price to consumers. There will be no discounting per this agreement."

Bestselling Hachette author Douglas Preston, who organised the authors' petition for the companies to resolve their spat in August, said he was relieved at the news of the deal.

"I can only hope 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," he told AFP.

He also said he expected the agreement would be good for authors.

"I have every reason to think this is a reasonable deal. Pietsch would not have accepted anything else."