Amazon and Hachette Reach Deal

Hachette and Amazon logo

After months of tense negotiations, Amazon and Hachette have signed a multiyear contract, the companies announced in a joint statement this morning. The agreement brings an end to the acrimonious dispute, which, while the terms were successfully kept between the two companies, revolved around ebook pricing.

“This is great news for writers. The new agreement will benefit Hachette authors for years to come,”Hachette Book Group CEO Michael Pietsch said in the joint press release. “It gives Hachette enormous marketing capability with one of our most important bookselling partners.”

“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,” David Naggar, Vice President of Kindle said in the statement.

While the exact terms are unknown, Mr. Pietch elaborated on the deal in a letter that went out to authors and agents this morning

“The new agreement delivers considerable benefits. It gives us full responsibility for the consumer prices of our ebooks,” Mr. Pietsch explained in the note. “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.”

Read Mr. Pietsch’s full letter and the joint press release below:

 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.

Hachette and Amazon have just issued the following joint press release:

HACHETTE BOOK GROUP AND AMAZON REACH NEW EBOOK AND PRINT BOOK AGREEMENT

November 13, 2014 – Hachette Book Group and Amazon (AMZN) today announced that the companies have reached a new, multi-year agreement for ebook and print sales in the US.

Michael Pietsch, Hachette Book Group CEO said, “This is great news for writers. 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.”

“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,” said David Naggar, Vice President, Kindle.

The new ebook terms will take effect early in 2015. Hachette will have responsibility for setting consumer prices of its ebooks, and will also benefit from better terms when it delivers lower prices for readers. Amazon and Hachette will immediately resume normal trading, and Hachette books will be prominently featured in promotions.

Amazon and Hachette Reach Deal