Amazon ups author royalty for Kindle, matching Apple

Starting in June, Amazon will have a new program that will enable authors and publishers who use the Kindle Digital Text Platform to earn a larger share of revenue from each Kindle book they sell.

Amazon

In what may be a pre-emptive strike against the strong possibility that Apple will reveal a slate-style device on January 27, Amazon has said it will up the royalty for authors and publishers who use the Kindle Digital Text Platform (DTP) to 70 percent of the list price of their e-books. That's a big jump from its current 35 percent royalty rate and not coincidentally, the same number Apple doles out to developers who sell their apps in Apple's App Store.

Starting on June 30, Amazon says that for each Kindle book sold, authors and publishers who select the new 70 percent royalty option will receive 70 percent of the list price, minus delivery costs. This new option will be in addition to and will not replace the existing DTP standard royalty option, which is set at a 65-35 split, with 65 percent going to Amazon.

Amazon didn't have any comment about whether the new pricing was a response to Apple's royalty program for its App Store, which offers thousands of e-books as self-contained apps along with e-reader apps from Amazon (Kindle for iPhone, Stanza), Barnes & Noble, and other e-book stores. But it did say that delivery costs will be based on file size and pricing will be 15 cents per megabyte.

"At today's median DTP file size of 368KB, delivery costs would be less than $0.06 per unit sold," the news release notes. "This new program can thus enable authors and publishers to make more money on every sale. For example, on an $8.99 book an author would make $3.15 with the standard option, and $6.25 with the new 70 percent option."

The announcement also sets some parameters around the 70 percent royalty option. To qualify, books must satisfy the following set of requirements:

  • The author or publisher-supplied list price must be between $2.99 and $9.99.
  • This list price must be at least 20 percent below the lowest physical 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 the competition, including physical book prices. Amazon will provide tools to automate that process, and the 70 percent royalty will be calculated off the sales price.
  • The 70 percent royalty option is for in-copyright works and is unavailable for works published before 1923 (aka public-domain books). At launch, the 70 percent royalty option will only be available for books sold in the United States.

It's worth highlighting Amazon's comment that the "list of features will grow over time as Amazon continues to add more functionality to Kindle and the Kindle Store." We have no idea what those features will be--nor would Amazon comment on them--but one could speculate on the possibility of additional interactive features that might come into play on more powerful, feature-rich e-readers such as a PC, iPhone/iPod Touch, the aforementioned Apple slate, or even a new Kindle.

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