E-book wars: Amazon reveals 70pc royalty option for authors

30 Jun 2010

Online retailer Amazon has revealed a new 70pc royalty option for publishers and authors who use the Kindle Digital Text Platform, enabling them to gain a larger share of revenue for each Kindle book they sell.

For each book sold from the Kindle Store for Kindle, Kindle DX, or one of the Kindle apps for the iPad, iPhone, iPod touch, BlackBerry, PC, Mac and Android phones, authors and publishers who choose the new 70pc royalty option will receive 70pc of the list price, net of delivery costs.

Delivery costs are based on file size, and pricing is set at US$0.15/MB. At today’s median DTP file size of 368KB, delivery costs would be less than US$0.06 per unit sold.

For example, on an US$8.99 book, an author would make US$3.15 with the standard option and US$6.25 with the new 70pc option. This new option, first announced in January 2010, will be in addition to, and will not replace, the existing DTP standard royalty option.

Bookshelf feature

In addition to the 70pc royalty option, Amazon also announced improvements in DTP, such as a more intuitive “Bookshelf” feature and a simplified two-step process for publishing. These features make it more convenient for authors and publishers to publish using DTP.

“We’re excited about the launch of the 70pc royalty option and user experience enhancements in DTP because they enable authors and publishers to conveniently offer more content to Kindle customers and to make more money from the books they sell,” said Russ Grandinetti, vice-president of Kindle Content.

DTP authors and publishers are now able to select the royalty option that best meets their needs. Books from authors and publishers who choose the 70pc royalty option will have access to all the same features and be subject to all the same requirements as books receiving the standard royalty rate.

In addition, to qualify for the 70pc royalty option, books must satisfy the following set of requirements:

  • The author or publisher-supplied list price must be between US$2.99 and US$9.99.
  • The list price must be at least 20pc below the lowest list price for the physical book.
  • The title is made available for sale in all geographies for which the author or publisher has rights.
  • The title will be included in a broad set of features in the Kindle Store, such as text-to-speech. This list of features will grow over time as Amazon continues to add more functionality to Kindle and the Kindle Store.
  • Under this royalty option, books must be offered at or below price parity with competition, including physical book prices.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years