In Amazon's continuing battle to try and make e-book prices cheaper, it has given French publisher Hachette an offer -- a $9.99 ceiling on e-book prices and Amazon won't ask for a bigger piece of the pie.
Amazon released news of the offer in a blog post, arguing that it wants to offer e-books for a cheaper price and saying that it would be willing to continue only taking 30 percent of sales if Hachette stopped pricing e-book titles at $12.99 and $14.99.
While Amazon is arguing for a lowering of e-book prices, it did not say that all titles should be lowered to $9.99, leaving room for exceptions in the case of specialized titles that may call for a premium price.
This offer comes months after the start of the dispute between Amazon and Hachette, which is the fourth-largest publisher in the U.S. The terms of the disagreement have not been made public, but it's widely thought that Amazon wants a larger cut -- 50 percent rather than 30 percent -- while Hachette wants to continue pricing e-books above $9.99.
"At $9.99, the total pie is bigger," Amazon said in the blog post. "How does Amazon propose to share that revenue pie? We believe 35 percent should go to the author, 35 percent to the publisher and 30 percent to Amazon...we had no problem with the 30 percent -- we did have a big problem with the price increases."
According to Amazon, pricing e-book titles at $9.99 would mean an increase in profit due to the higher amount of sales. The company's data suggests that for every 100,000 copies of the book that are bought at the higher price, 74,000 more copies would be sold at the lower price, resulting in a total profit of $1,738,000 rather than $1,499,000.
The disagreement between the two companies reached a new level in May when Amazon refused to put preorder buttons on upcoming Hachette titles and restock the publisher's books. Amazon then said that its licensing deal with Hachette would expire if the companies did not reach an agreement.
So far only U.S. customers have been affected by the disagreement, but many publishers see the disagreement as more symbolic of the struggle between them and Amazon, which controls over half of the e-book market and around a third of the book market in general.
"A key objective is lower e-book prices," Amazon continued in its statement. "Many e-books are being released at $14.99 and even $19.99. That is unjustifiably high for an e-book. With an e-book, there's no printing, no over-printing, no need to forecast, no returns, no lost sales due to out-of-stock, no warehousing costs, no transportation costs, and there is no secondary market -- e-books cannot be resold as used books. E-books can be, and should be, less expensive."
While the disagreement is likely to continue for at least a little while longer, many U.S. customers are hoping that a compromise is made soon.
