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Wednesday, January 20, 2010

Amazon Increases Royalty Rate for Books on Its Kindle E-Reader

The upcoming release of Apple's Tablet has spurred an interesting move by Amazon...substantially increasing royalties paid to authors and publishers.

Let the games begin!

By Motoko Rich of The New York Times:

In what appeared to be a clear bid to anticipate the release of the breathlessly awaited Apple tablet, Amazon announced Wednesday new royalty terms for authors or publishers who release e-books through its Kindle’s digital text platform, a direct publishing initiative.

Authors and publishers will be offered a royalty rate of 70 percent of the digital list price after “delivery costs,” typically about 6 cents per digital unit. This rate is similar to that currently offered by Apple in its app store.

Amazon’s move is also a clear bid to woo authors away from traditional publishing houses. Publishers typically offer authors a royalty rate equal to 15 percent of a hardcover list price and 7.5 percent of a trade paperback list price. On digital books, the emerging industry standard among the largest publishing houses is 25 percent of net proceeds from the sale of an e-book.

Amazon has set some criteria for authors or publishers who want to receive the 70 percent royalty. List prices must be from $2.99 to $9.99, a maximum that is much lower than the typical hardcover price of around $25. The e-book’s list price must also be 20 percent lower than the lowest list price for a physical copy of the same book and the same price as or lower than any competitor’s price.

Note from John: The last paragraph's listed criteria from Amazon seems a little over-the-edge, does it not?
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