TechCrunch reports that Amazon has launched a 70% royalty option for Kindle e-books (sold to US customers), as a complement to its existing 35% Digital Text Platform royalty.
The 70% royalty comes with a number of requirements, none of which seems particularly onerous. The price must be $2.99 to $9.99, and must be at least 20% below the lowest list price for the paper version of the book. It must be offered in all geographic areas to which the author or publisher has the rights, at or below price parity with competition (including physical book prices). And it must have features such as text-to-speech read-aloud enabled.
In return for this consideration, Amazon will give the author/publisher 70% of the retail price (less 15 cents per megabyte delivery costs) rather than its current 35%. This is similar to the agency pricing split that the big publishing houses have imposed on Amazon, but gives Amazon more control over the price range than they get under the agency model.
This could be quite attractive to self-publishing authors, giving them incentive to lower their prices, sell more books, and take in more money. And it gives authors incentive to consider Amazon ahead of competing e-book stores. It remains to be seen whether Amazon’s competitors will follow suit.
Because I’m a true believer in affordable eBook pricing, I almost all of my books qualify for this program. Unfortunately, it apparently does not extend to books made available earlier through the Mobipocket model. More evidence of the death of Mobipocket, perhaps? Certainly more work for me if I have to delete and then re-list dozens of books just to offer me and my authors a better royalty cut.
Rob Preece
Publisher
Was this a smart move by Amazon? I think so. In fact, I’m betting that a lot of Authors and Publishers will be very excited to learn about this latest decision to bump the royalties to 70%. Amazon have effectively made the decision on how to publish an ebook that much easier because authors will get paid more without doing any more work. Amazon has put itself in a position to become the goto source for authors looking to get their work distributed AND the goto source for readers looking to find new content to read about. What’s amazing is it looks like Amazon is winning on BOTH fronts and in effect, created a very powerful business ecosystem that continuously feeds itself. On the side of the ebook merchant, their Kindle application is become THE platform for purchasing books, no matter what device you own. The ability to purchase one, read anywhere will be a very attractive option for most ebook consumers. And on the other side, this new 70% royalty program will likely prove to be the most appealing option for authors and publishers as well. Barnes and Noble will have a tough time matching Amazon with their new PubIt! platform, which is unfortunate since they only made the announcement 2 weeks ago.
Good post and thanks for the news. I’m going to leave it at that for now, but more thoughts about this news on my blog: http://ebookreader-ben.com/amazon-to-give-70-royalties-to-ebook-publishers/