Internet retailer Amazon.com, Inc. (NASDAQ:AMZN) has inked a multi-year agreement with publisher Hachette Book Group over the sales of ebooks and print books. The agreement signals an end to the two companies’ bitter conflict the previous months, stemming from differences regarding price setting and Amazon’s cut on book sales.
The dispute lasted for about six months, during which Amazon.com, Inc. (NASDAQ:AMZN) has stopped selling and cancelled pre-order options for several of Hachette’s titles. Under the new contract, which will be effective starting next year, Amazon will allow Hachette to set prices for its books. According to David Naggar, Amazon’s vice president responsible for Kindle e-reader unit, the company is pleased with the new deal which specifically includes financial incentives for Hachette to lower prices.
Earlier, Amazon has also signed a deal with book publisher Simon & Schuster back in October, and the contract also creates financial incentives for the publisher to set out lower prices. The company believes that its emphasis on lower prices ensures the best deals for its customers. It is also looking forward to reaching new agreements with other players in the publishing industry including HarperCollins Publishers, MacMillan, and Penguin Random House.
According to a report by BBC, Amazon.com, Inc. (NASDAQ:AMZN) is seen by observers as trying to have a bigger cut from sales under its new contract with Hachette while keeping prices low. Hachette, however, denied this, saying that it would be unsustainable on its part. Hachette is currently the fourth largest publishing company in the U.S. While the terms of the new contract was not disclosed by the two companies, Hachette chief executive Michael Pietsch noted that the new agreement will be beneficial for its writers and that it provides an enhanced marketing capability with Amazon, its most prominent partner in the industry.
This article has been written by Nonito Guntan.