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Closing the book on the Amazon and Hachette feud

The seven-month stand-off between Amazon and Hachette over the pricing and profits of ebooks has ended with a new agreement beginning in early 2015. Jeffrey Brown speaks with Jeffrey Trachtenberg of The Wall Street Journal about how the disagreement hurt both the retailer and authors, and whether the conflict could return.

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  • JUDY WOODRUFF:

    After a bitter seven month standoff, the world's largest online retailer and a big player in the publishing industry reach an agreement.

    Jeffrey Brown has the story.

  • JEFFREY BROWN:

    It was a fight over who sets the price for e-books and how the money from those sales should be divided. It pit two big players against one another, online retailing giant Amazon vs. major publishing house Hachette.

    And it got plenty public and even nasty.

    Here to tell us about today's development is Jeffrey Trachtenberg of The Wall Street Journal.

    Thanks for joining us.

    Remind us first what was the heart of this dispute, and today, how was it resolved?

  • JEFFREY TRACHTENBERG, The Wall Street Journal:

    So what happened was, Amazon and the big publisher Hachette had a disagreement over e-books.

    How would the e-book pie be split and how would e-books be priced? And this disagreement had fundamental repercussions for the rest of the publishing industry, and it dragged on and on and on. It started in May and it's only been resolved now.

    It seems like both sides conceded a little to each other, but neither side has declared victory.

  • JEFFREY BROWN:

    So, it looks as though Hachette will remain able to set prices for e-books and likely that Amazon would get a higher percentage of those revenues?

  • JEFFREY TRACHTENBERG:

    Right. That's a very good point. We don't actually know what percentage of revenue Amazon is going to be getting.

    The new e-book agreement which goes in effect in January — in early of 2015, will allow Hachette to set its consumer digital book prices.

  • JEFFREY BROWN:

    Well, Amazon took some aggressive actions and got some bad publicity in return, including pushback from many prominent writers.

    How much did that hurt Amazon and possibly even lead to this agreement?

  • JEFFREY TRACHTENBERG:

    I think it dinged Amazon. I think that Amazon has always considered itself an author-friendly company, and I think it wounded them to see authors whose careers it had helped create and promote and provide for attacking them as being harmful to their writing years. And, in my mind, the group Doug Preston's Authors United group sort of marked a turning point in the battle.

  • JEFFREY BROWN:

    Douglas Preston is the novelist who led the authors group against Amazon in this fight.

    But even today, after the announcement, he said he was glad about the agreement, but — quote — "If anyone thinks this is over, they're deluding themselves." He said Amazon covets market share the way Napoleon coveted territory.

    Now, that doesn't sound like he sees a happy conclusion here.

  • JEFFREY TRACHTENBERG:

    So, I think one thing the dispute displayed prominently is how important and powerful Amazon has become on the book publishing landscape.

    Amazon really has emerged as the premier book retailer, and it gives them a lot of clout. And I think what Doug is addressing is the fact Amazon is going to continue to negotiate as hard as it can for as favorable terms as it can get, and I think that's where he's sort of pointing.

  • JEFFREY BROWN:

    At the same time, there was also pressure on Hachette, too, right, from its authors.

  • JEFFREY TRACHTENBERG:

    Of course.

  • JEFFREY BROWN:

    Especially, I guess, with the big holiday season coming.

  • JEFFREY TRACHTENBERG:

    Of course.

    It was terrible. I did speak to one author today, George Pelecanos, the crime writer, and he was greatly relieved. He has got a book being published in January. Authors want to have their books sold. And Amazon has emerged as the premiere online bookseller.

    Their careers and their book sales were clearly in many cases being hurt because consumers couldn't preorder their titles, or you would try to buy a book and Amazon would say it's not going to ship for three or four weeks, and it would discourage you from perhaps buying that title and maybe you would look for another book. And Amazon also decided not to discount many of the Hachette titles.

    All of that together created a lot of pressure on Hachette.

  • JEFFREY BROWN:

    Finally, in what way, if at all, does this impact the rest of us, the consumers? Where are we in all of this?

  • JEFFREY TRACHTENBERG:

    So, I think that's sort of a longer-term battle that will have to unfold as we see how consumer e-book prices fluctuate.

    But I would say, for the present, for consumers, this is a good deal. It allows them to go back to ordering and receiving the Hachette titles from authors they like and admire in a regular way.

  • JEFFREY BROWN:

    Jeffrey Trachtenberg of The Wall Street Journal, thank you.

  • JEFFREY TRACHTENBERG:

    Thank you.

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