The gloves seem to be coming off in a fight between Amazon (AMZN) and Hachette.
The two companies have been in a dispute over e-book prices for months. Amazon began delaying shipments of some Hachette books and removed the preorder button on some new titles to pressure the publisher. Some Hachette authors publicly criticized Amazon for doing that, but yesterday Amazon proposed giving Hachette authors 100% of the revenue from e-book sales until the two companies reached an agreement.
The two billion-dollar companies traded very public blows. Hachette responded that Amazon was trying to make it commit suicide with the offer. Amazon then responded, "We call baloney."
Yahoo Finance Senior Columnist Michael Santoli said Amazon had the leverage in this relationship and a more persuasive case in this matter. “I do think that Amazon ultimately gets what it wants here because Hatchette needs Amazon more than Amazon needs Hatchette or these authors,” he said.
Hatchette is the fourth largest book publisher in the U.S. and is owned by France’s Lagardere. Amazon accounts for 60% of Hatchette’s digital book sales according to Lagardere. However, Santoli said for Amazon, it’s only a trivial amount of revenue. It’s not losing anything.
Santoli also thinks Amazon is not losing anything on the image front either because people already think of them as the big bad bully in a lot of these scenarios. He said it comes down to a war of endurance between these two companies on exactly what the price point is going to be in terms e-book fees down the road.
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