The two companies have struck a deal which gives several incentives to Hachette to lower prices of books
The brutal pricing war between Amazon and Hachette finally comes to an end as the two have agreed to get into a multiyear agreement for e-book and print sales. The standoff between Amazon and the "Big-Five" publisher had been going on since spring this year after the contract with Hachette had expired. Amazon went as far as to even cancel the pre-orders for the Hachette books and stalled the delivery of some titles. In between all this, Amazon had been trying to convince the publisher to price all its e-books at $9.99 as this would leave Amazon with a greater sales cut.
Though this new agreement doesn’t price all the Hachette's e-books at $9.99 but it gives it gives the publisher an incentive to offer lower prices. It was stated at the companies' joint press release that "Hachette will have responsibility for setting consumer prices of its e-books, and will also benefit from better terms when it delivers lower prices for readers.”
Looks like Amazon has been getting its way good with all the publishers for its benefits’ sake. Only recently the online retailer had been negotiating terms with Simon & Schuster, another major publisher, and they have also struck a deal.
The CEO of Hachette Book Group, Michael Pietsch, says "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.” David Naggar, Vice President, Kindle, was equally pleased with this new deal as he stated "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.”
The new ebook terms which come as part of this deal are going to be put into effect from early 2015 and Hachette will take complete responsibility for setting consumer prices of its ebooks. The incentive here in the deal is that the publisher is going to get tons of benefits from better terms if they manage to deliver lower price for the customers. Thanks to the striking of this deal, the two companies are finally going to start trading on a peaceful ground and it is said that the Hachette books will regularly be promoted.
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