Why the Amazon–Hachette Deal Is Likely Good for Writers and Publishers

This article by Vauhini Vara originally appeared on The New Yorker on 11/14/14.

The end of the months-long impasse between Amazon and Hachette over e-book pricing was a bit anticlimactic for those who had been watching the drama unfold. For months, the companies and their supporters had been accusing each other of bad behavior, warped motives, and plain dimwittedness. At one point, Amazon, apparently hoping to put pressure on the publisher, began delaying shipments of hard copies of Hachette-published books ordered through its site, to the ire of those books’ authors. In response, many writers signed an open letter from a group called Authors United, begging Amazon to back off; later, Authors United announced that it would ask the U.S. Department of Justice to investigate whether Amazon’s delays, or other tactics, amounted to antitrust violations.

Journalists covered each of the escalations attentively, and the negative publicity hurt Amazon’s reputation and maybe even its bottom line. The company posted disappointing earnings results in late October, including the slowest growth it had seen for North American media sales (which includes books, movies, and music) in more than five years. But then, on Thursday morning, the companies issued a joint press release announcing that they have agreed to make Hachette responsible for setting e-book prices, as Hachette is thought to have sought. It is believed that Amazon, which has typically favored keeping e-book prices low, had hoped to set those prices itself. Instead, with this agreement, Amazon will, according to David Naggar, Amazon’s vice-president for Kindle, offer “specific financial incentives for Hachette to deliver lower prices.” The agreement will take effect in early 2015.


Read the full article on The New Yorker.