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Amazon at war with Hachette over low e-book prices

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Amazon.com Inc, locked in a war with publisher Hachette Book Group over e-book prices, said its push for lower prices was good for authors, publishers and booksellers.

Upset over its e-book prices, Amazon has delayed deliveries and cut discounts on some books published by Hachette, the fourth-largest US book publisher, owned by France's Lagardere.

In a blog post on the Amazon site authored by the "Amazon Books team", the ecommerce giant said e-books were very price sensitive. 

Based on a review of many titles, Amazon argued that ebook priced at $9.99 sold 1.74 times as many copies as one sold at $14.99, generating 16% more revenue.

It said keeping prices low saved money for consumers while authors would get higher royalties and 74% more readers, with publishers also getting more money.

"The total pie is bigger and there is more to share amongst the parties," it said.

Amazon claims that pricing an e-book at $14.99 or $19.99 is too expensive and unjustifiable in most cases.

"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 - ebooks cannot be resold as used books," Amazon said in the blog. 

Hachette was not immediately available for comment but Amazon's actions have alienated top-selling authors James Patterson and Malcolm Gladwell, who mocked the situation in a spoof video on Slate.com. 

Lagardere has said Amazon accounts for some 60% of Hachette's digital sales.

The companies have been sparring in public, with Amazon this month proposing that authors get all the revenue from e-books sold on the site, an offer Hachette rejected.
 

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