Amazon settles contract dispute with book publisher Hachette

On Behalf of | Nov 13, 2014 | Contract Disputes |

Thanks to huge advancements in technology, publishing has changed considerably in the last decade. Printed books and magazines have given rise to e-readers and tablets that offer the same product but for a fraction of the cost. But while technology has changed how people access printed materials, there is one thing that has remained relatively the same: contract negotiations.

This point was illustrated perfectly this fall when the online giant Amazon squared off with the fourth largest publisher, Hachette, in a contract dispute that included not only the two business entities but a large number of writers as well. The dispute culminated in a letter from best-selling author Douglas Preston who urged Amazon to “stop using writers as hostages in its negotiations.”

Although neither Amazon nor Hachette has disclosed the exact terms of their new multi-year contractual agreement, some reports speculate that Hachette may have come ahead on the deal because it “won the ability to set the prices for its e-books.” This was a major source of contention for several months for the two businesses because Hachette felt like Amazon was trying to muscle the publisher out of existence by wanting a bigger share of e-book sales but asking it to provide lower e-book prices.

Whether you were on the side of Hachette or Amazon, it’s clear that both sides had good reasons for beginning the dispute. As Amazon explained, it needed to provide lower prices to entice consumers while “making enough of a profit to satisfy investors.” As for Hachette, it wanted to do what was in the best interest of writers and readers while still making a profit. In the end, it seems that the new agreement has done just that, pleasing both companies for the time being.

Sources: The New York Times, “Amazon and Hachette Resolve Dispute,” David Streitfeld, Nov. 13, 2014

The New York Times, “Plot Thickens as 900 Writers Battle Amazon,” David Streitfeld, Aug. 7, 2014

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