Just a day after opening its Kindle store to non-US publishers, Amazon has responded to emerging competitive pressures and cut its slice of Kindle sales income from 70% to 30%, meaning publishers and authors using its self-service Digital Text Platform will now get the lion’s share of the sale.
There are hooks. The old 30% royalty still applies if your book doesn’t meet the terms Amazon specifies and you’ll also need to pay a download fee which varies by the size of your ebook file. According to the company’s announcement, to get the new 70% rate:
- Your book’s list price must be between US$2.99 and $9.99
- It must be at least 20% under the lowest print edition’s price
- It must be offered in all geographies for which you have rights
So to some extent, Amazon is paying for the higher royalty by saving itself from taking heavy discounts from its own margins. Still, for self-publishers and small publishers, it’s a useful improvement.
It looks like Amazon is trying to position itself better in anticipation of better deals from Apple’s forthcoming iSlate / iTablet and Google’s forthcoming Google Editions, both of which appear offer deals more in line with Amazon’s new option.
And in a further move to head off Apple, this New York Times story reports:
In its announcement Thursday, Amazon will say that it is letting programmers create what it calls active content — similar to applications — for the Kindle and keep 70 percent of the revenue from each sale after paying for wireless delivery costs.
Amazon will release a set of programming guidelines that other companies — including publishers of books and periodicals — can use to create and sell applications for the Kindle.
Until Amazon introduces more advanced models of the Kindle, developers will be limited by its slow-to-refresh black-and-white screen.
In the same story, the New York Times reports:
The move may also represent a shift in Amazon’s relationship with newspapers and magazines that make digital editions for the Kindle. Many executives at those organizations have expressed dissatisfaction with their 30 percent cut of subscription fees on the Kindle and lack of a direct relationship with those subscribers.
With a Kindle app store, those media companies will be able to sell more profitable Kindle applications, and present news that is updated throughout the day.
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Yes, this is an interesting development. This Amazon royalty rate certainly is dramatically different than the rates which has been used by Simon & Schuster, Macmillan and other major publishing houses. So it is an encouraging trend for authors.
Also, I think for most authors, the conditions which Amazon presents are doable.
Anyway, nice posting. Thanks!
Unfortunately it does not come into effect until June 2010.