Hachette sides with Macmillan on e-book pricing

The US arm of Hachette has become the latest publisher to sign up to Apple's iBookstore. It's a move that could signal the end of low cost eBooks.

In a letter to US agents, Hachette Book Group CEO David Young (pictured) confirmed the publishing group was moving to an 'agency model' – meaning that instead of offering discounts to sellers who can then set their own price, they will instead offer a commission on each sale. It is a move that lets the publisher set the cover price.

Young's email insists the change will work well not just for the publisher, but also for authors, retailers and consumers. "It allows Hachette to make pricing decisions that are rational and reflect the value of our authors' works. In the long run this will enable Hachette to continue to invest in and nurture authors' careers."

Hachette plans to issue e-books simultaneously with hardcover or first format print editions.

Supporters insist the pricing model ensures eBooks are not devalued, and claim higher cover prices generate more income that can be ploughed into encouraging new product. Hachette, however, argue that they make less money on each e-book sale, prompting comparisons with mistakes made by the music industry when MP3s became the prime method of delivery.

The stance turns Hachette into a valuable ally for Macmillan in their dispute with online retailer Amazon.