Richard Curtis, a literary agent, has a blog article at e-reads in which he points out that there are some “gotchas” in the scheme.
At first glance the new 70% royalty would appear to be a no-brainer for publishers and authors, 70% being more than 50%, right? Well… not so fast.
For one thing, you are prohibited from charging more than $9.99 for your e-book. Commitment to Kindle’s DTP price structure will preclude content providers – such as the five major publishers that signed agreements with Apple – from selling their e-books on the iPad at Apple’s suggested retail prices of $12.99 to $14.99.
For another thing, the 70% royalty is calculated not on the publisher’s list price but on the actual price charged by Amazon. If your book’s list price is $9.99 and Amazon charges customers $9.99, then yes, you’ll make out well with a royalty of $6.99. However, if Amazon offers your book at $4.99 your 70% royalty will be $3.49. And the deeper that Amazon discounts the book’s price the lower your royalty goes.
There is more in the article that any prospective author should read before making a decision. Thanks to Marilynn Byerly for pointing this out.