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Amazon issues statement related to pricing and Hachette dispute

Alberta residents may be interested in a statement issued by Amazon July 29 that sets forth a proposal for sharing revenue from book sales. The statement also provides some insight into Amazon's dispute over pricing with Hachette Book Group. According to Amazon, lower e-book prices lead to higher sales. The company wants to lower the price of e-books. The proposal suggests that the online bookseller would receive 30 percent of the revenue made from a sale. The remaining 70 per cent would be split equally between the author and the publisher.

Amazon and Hachette have been in a dispute over e-book prices that led Amazon to block some preorders of Hachette books, including J.K. Rowling's new novel "The Silkworm," earlier this year. Amazon's 30 percent share of revenue is the same percentage included in its 2010 agreement with Hachette. However, the difference is in the pricing. Amazon believes the prices are too high and that Hachette is not sharing enough revenue with the authors.

In its statement, which was published on a Kindle e-book reader forum, Amazon said that e-books compete against mobile games, blogs, Facebook, and other entertainment sources and that book prices have to be inexpensive in order to keep the products competitive. According to Amazon, reducing e-book prices from $14.99 to $9.99 would lead to a 74 percent increase in sales and a 16 percent increase in total revenue. While e-book sales have increased to around $8.7 billion since 2010, physical book sales have dropped from $26 billion to less than $20 billion, according to Forrester Research.

Contract disputes frequently occur due to changing market conditions and unforeseen circumstances. Companies often rely on lawyers with considerable experience in business and commercial law to help them negotiate or renegotiate contracts and agreements.

Source: Business News Network, "Amazon makes case to cut e-book prices amid Hachette dispute ", Reed Stevenson and Jing Cao, July 30, 2014

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