Relief at conclusion of Amazon/HBG battle

The trade has reacted with relief to news that Hachette Book Group (HBG) in the US and Amazon have reached a new multi-year agreement.

The agreement, announced yesterday (Thursday 13th November) in a joint statement by the two companies, will give HBG responsibility for setting consumer prices for its e-books but provide the publisher with "specific financial incentives" to keep that price low.

The news has been welcomed by authors and their representatives, although with some caution.

Douglas Preston, who set up the Authors United campaign group to urge Amazon to stop "sanctions" against authors, told The Bookseller: "I'm relieved that Amazon and Hachette reached an agreement. 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."

Preston told the Guardian that the agreement did not, however, "change the fundamental problem that Amazon controls 50% of the book market in the US and was willing to throw its weight around and take books hostage and hurt authors whenever they run into a negotiating problem".

He said that he thought the Authors United campaign had put pressure on Amazon, who "started off asking for just outrageous and untenable terms". And in Publishers Weekly he said it would not stop Authors United from going ahead with its plans to ask the Department of Justice for an antitrust inquiry into Amazon.

Authors Guild President Roxana Robinson, president of the US authors' body Authors Guild, said in a statement on the organisation's website that the news was especially welcome "coming in advance of the holiday sales season".

“We congratulate both parties on finally reaching an agreement," she said. "It was heartening to see so many writers rally to the defense of their colleagues. We’d like to think the display of communal spirit played a part in bringing the negotiations to an end—and we hope it prevents authors from being dragged into corporate disputes in the future.

“We’ve heard that this deal is favorable to authors, but we have no way of knowing right now. In the meantime, it’s our hope that Hachette—in light of the loyalty its authors have shown throughout this debacle—takes this opportunity to revisit its standard e-book royalty rate of 25% of the publisher’s net profits.”

Brian DeFiore, founder of the literary agency DeFiore and Company and a board member of the Association of Authors Representatives, told Publishers Weekly that while authors, HBG and Amazon "all have financial skin the the game," only the retailer and publisher were involved in negotiations.

He said: "That's worrisome for the ones not at the table."

Jane Dystel, president of Dystel & Goderich Literary Management, told the New York Times: “The fact that these two 
companies are no longer shooting at each other is a really good thing for all of us."

The agreement, which will take effect early in 2015, covers e-book and print sales in the US.

Amazon and HBG will now resume normal trading, with Hachette books being “prominently featured in promotions”, although some HBG titles - such as Malcolm Gladwell’s David and Goliath - are currently still showing as being out of stock or subject to delays in delivery times.

The two companies made their disagreement public in May, when HBG accused Amazon of delaying deliveries of its books on purpose. Since then, thousands of HBG titles have been subject to delayed shipping and readers have been unable to pre-order books. HBG accused Amazon of seeking profit and bigger market share, while Amazon said its aim was to provide customers with e-books at lower prices.

Authors were pulled into the six-month long dispute, with prominent writers including James Patterson, John Green and Gladwell condemning Amazon. Preston set up Authors United to petition Amazon to end the dispute, while Amazon set up its own campaign, titled Readers United. A number of prominent indie authors, including Hugh Howey and Barry Eisler, also stepped up to support Amazon, with their own public-facing campaign.

HBG's agreement comes shortly after Simon & Schuster in the US struck a new agreement with Amazon.

Reacting to the news of the agreement on his blog, author Hugh Howey said: "Hachette has put an end to their nightmare of a standoff and has agreed to terms with Amazon. This is great news for book buyers and Hachette authors and the industry in general. It comes right on the heels of Simon & Schuster signing a multi-year deal with Amazon for both print and ebooks, and the wording of that announcement was practically identical to the wording of the Hachette announcement today."

Philip Jones, editor of The Bookseller, said in a blog piece that the agreement "feels like a score-draw between two sides neither of whom could quite net the winning goal, and simply grew too fatigued to keep pumping the ball up the pitch".

"But Hachette won the penalty shoot-out," he said. "Agency was always going to be the deal-breaker and that's what Hachette comes away with, just as Simon & Schuster had before it. S&S called it a a "version of agency". Hachette said the deal gave it responsibility for setting consumer prices for its e-books."

HBG c.e.o. Michael Pietsch said yesterday that the agreement was "great news for writers".

"The new agreement will benefit Hachette authors for years to come," he added. "It gives Hachette enormous marketing capability with one of our most important bookselling partners.”

David Naggar, v.p., Kindle, said: "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.”