Amazon Tweaks Kindle Store Royalty Program Ahead of Apple Tablet Launch

[MacRumors]

Amazon today announced a revised royalty program for its e-book Kindle Store, significantly increasing the potential return to authors and publishers in exchange for commitments to meet certain feature requirements. The move, which takes effect on June 30th, essentially bumps the royalty payments to 70% of an e-book's list price, up from the existing 35% rate that will remain in effect for publishers who do not wish to meet the requirements of the new program.

For each Kindle book sold, authors and publishers who choose the new 70 percent royalty option will receive 70 percent of list price, net of delivery costs. This new option will be in addition to and will not replace the existing DTP standard royalty option. This new 70 percent royalty option will become available on June 30, 2010.

Delivery costs will be based on file size and pricing will be $0.15/MB. At today's median DTP file size of 368KB, delivery costs would be less than $0.06 per unit sold. 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.

Amazon will require that works offered under the new increased royalty program meet certain standards, including list prices of between $2.99 and $9.99 and at least 20% under physical book prices, as well as support for Kindle features such as text-to-speech.

The announcement comes just one week before Apple's media event where it is expected to introduce its long-awaited tablet device. e-Book functionality is expected to be included on the new device, with Apple reportedly in talks with book publishers to offer their content on the tablet. Apple currently offers developers whose applications appear in the company's App Store for the iPhone and iPod touch 70% of revenues, sparking speculation that Amazon's e-book pricing change is an effort to match what it expects Apple could offer publishers for distribution through the iTunes Store.

Article Link: Amazon Tweaks Kindle Store Royalty Program Ahead of Apple Tablet Launch

 

[SnakeDiver]

I hope the iPAD / iSlate / i-Apple-Tablet-thing is not just Apple's version of an e-book reader.

I have very little interest in eBooks. If I can't hold the book in my hands, I don't want it.

My opinion anyways. But ya, I hope the i-Apple-Tablet-thing is a lot better than just a spiffy Kindle.

 

[iSee]

Wow. Authors and book publishers everywhere should give Steve Jobs a big hug the next time they see him...

Just the idea that Apple's is getting into the e-reader/e-book market made Amazon double its royalty rate...

Edit:

$0.15/MB.

I think that's a little bit of a mistake. It's high, and actually gives publishers an incentive to not enrich the media included with an ebook.

Maybe they have to charge this because of their deal with Sprint (or whoever it was) to deliver wirelessly. But you don't want to try to compete with Apple when you've got:
"Tiger Woods Exposed -- the tell-all unapproved biography"
vs.
"Tiger Woods Exposed -- the tell-all unapproved biography with EXCLUSIVE nighclubbing photos and video!!!"

e.g.,

 

[talkingfuture]

Its almost as though they are expecting some competition, I wonder what?

 

[cvaldes]

I hope the iPAD / iSlate / i-Apple-Tablet-thing is not just Apple's version of an e-book reader.

I have very little interest in eBooks. If I can't hold the book in my hands, I don't want it.

My opinion anyways. But ya, I hope the i-Apple-Tablet-thing is a lot better than just a spiffy Kindle.

I don't think there are many people who predict the phantom tablet will solely be an eBook reader like the Kindle.

More likely, it would be one feature of a multi-function media device, much as the iPod touch plays back music, video, and handles eBooks (the Kindle app, Stanza and others), as well as plays games.

A popular consensus is that the tablet would be a supercharged iPod touch, which would make it decidedly not like a spiffy Kindle. Based on previous rumors about features, pricing, component choice, etc., it is unlikely that the device is a pureplay eBook reader.

 

[pmz]

I hope the iPAD / iSlate / i-Apple-Tablet-thing is not just Apple's version of an e-book reader.

I have very little interest in eBooks. If I can't hold the book in my hands, I don't want it.

My opinion anyways. But ya, I hope the i-Apple-Tablet-thing is a lot better than just a spiffy Kindle.

This really isn't an opinion. If you're not interested in ebooks then you're not interested in reading, period.

I mean you're reading an article and responding to it on a computer, while complaining about digital instead of physical. What a joke.

 

[PaulSorensen]

So Apple is helping the eBook industry already... wait until they've actually launched a product

 

[wally626]

The download cost is fine for a plain text document, but it is going to hurt on larger color documents with pictures. I think most publishers selling on the Apple tablet and other color tablets might want to pass on the Kindle store, for those devices. Apple takes the download costs out of it's 30 percent, for apps some of which are near 10 MB, that would cost you $1.50 on Kindle. So for a 2.99 Magazine at 10 MB the publisher would get 59 cents. If you have video in the Mag I'm sure 10 MB would be easy to hit.

 

[ob81]

They know something that we don't know. This is a huge move.

 

[amac4me]

Too late Mr. Bezos ... you should have taken action earlier to ensure build the distribution side of the platform. A simple case of network effects would have ensured that content providers would be a bit more locked-in to the Kindle platform. Now Apple is gonna change the game and you're surely gonna see a migration to Apple's platform.

From a consumer's perspective a color screen and overall better user experience will put a significant dent in the Kindle.

Sorry Jeff, you should have changed your royalty rate a long time ago. Not the week before Apple announces the product/platform.

 

[andiwm2003]

wohoo, that was long overdue. text to speech will be a big thing in the future when the voice quality gets better and better. alos disabled people will like that feature. i hope it will get extended to pdf and magazines.

also with 70% profit a lot more authors/publishers will support ebooks.

i'm quite sure kindle will have a reader for iphone (already there), android, mac coputers and tablet in the future. that will make ebooks very convenient.

 

[liavman]

Interesting development. Amazon may find Apple opening up the Book publishing to independent authors who are not affiliated with major publishing companies. Publishing a book will be more like making apps and music available in the Apple Store. ( it may still go through a review process like apps who knows ). The main job of a publisher is to recruit 'saleable' authors and then promote them, similar to what album labels do. Apple store may offer a different eco system for the promotional aspects.

May be Amazon will be compelled to open up its store for independent authors as well. ( does it already do that ? )

 

[DipDog3]

70% sounds very familiar!

 

[Chupa Chupa]

Amazon would be better off migrating from the 100% proprietary .AZW format to a slightly more open ePub format that almost all other e-readers are going to. The Kindle is not going to be sustainable with .AZW for much longer, especially if Apple adopts ePub or some other DRM reduced format. They are going to have to adapt like iTunes did when it got rid of DRM on songs.

 

[StanWinstone]

I think Amazon is going to get killed on this. Raising the potential royalty to 70% is a step in the right direction. But Amazon is hobbled by whispernet. Offering free wireless access sounds like a great deal to the consumer but not if that cost is to be borne by publishers. That means lowered royalties and no reason to add more multimedia content- i.e. the opposite of Apple's deal. But hey this is free market economics in action. My take: http://tastyslate.com/2010/01/20/amazon-hedges-ahead-of-pending-apple-event/

 

[swarmster]

The download cost is fine for a plain text document, but it is going to hurt on larger color documents with pictures. I think most publishers selling on the Apple tablet and other color tablets might want to pass on the Kindle store, for those devices. Apple takes the download costs out of it's 30 percent, for apps some of which are near 10 MB, that would cost you $1.50 on Kindle. So for a 2.99 Magazine at 10 MB the publisher would get 59 cents. If you have video in the Mag I'm sure 10 MB would be easy to hit.

Huh? The Kindle, and therefore the Kindle Store, supports neither colour nor video. The Kindle is an e-ink reader. That's very different from a tablet, and a tablet is very different from it.

 

[Bentron]

This really isn't an opinion. If you're not interested in ebooks then you're not interested in reading, period.

I mean you're reading an article and responding to it on a computer, while complaining about digital instead of physical. What a joke.

A paper book is completely different to reading online and to an eBook. Most people like the experience a book provides, i.e. going to a book shop, browsing, having the book physically in their hands and being able to turn pages. That is an experience that many enjoy and wouldn't want to change. I'm not saying there's anything wrong with eBooks, they have their place, but so too does the 'traditional book' and it always will. Preferring paper books over eBooks has no relation to reading on a computer, at all.

 

[ltcol266845]

This is a really awesome step for Amazon. There is already a pretty large selection of books in the Kindle Store, this will only further encourage more publishers to get their books into the system. Also means more interest from Newspapers and Magazines, I imagine.

Thanks Apple!

 

[cmaier]

The only greater news would be if Amazon (and Apple) supported epub

 

[miknos]

Nice to see competition. I hate having to convert PDF's to read on Kindle. And when you buy the ebook in kindle's store you actually don't OWN it.

I hope Apple's tablet have a good screen for reading. Something easy to the eye like the e-ink.

Now I keep thinking about piracy. It is so easy to download music and movies this days... The same applies to eBooks. Are this reading devices going to get rid of physical paper? Are we going to see eBooks of practically ALL physical books available online?
Same way alumni photocopy books he can't afford, they will download it for free online (illegally).

We are in the era of information. Today you can find practically everything of anything you want/need. Same for communication.

Hopefully Apple's tablet will revolutionize the reading market like it did with mobile phones. Would be nice to have a library with thousands and thousands of books/magazines/comics/whatever inside a beautiful device.

What I hope Apple's tablet to be?
- Slim/lightweight.
-Good screen readability.
-days/weeks battery life for reading.
-plenty of space to have thousands of PDF (no DRM files please).

 

[cloud]

I'm guessing the tablet won't come out until June, since Amazon won't start the new deal until then.

 

[AidenShaw]

I hate having to convert PDF's to read on Kindle.

Note: The Kindle DX has always had native PDF support. The regular Kindle (2) now has PDF support as well.

http://www.amazon.com/dp/B0015TG12Q/?tag=yahhyd-20&hvadid=70147807011&ref=pd_sl_758ucipfav_b

PDF support for Kindle (2) is in software update 2.3 http://www.amazon.com/gp/help/customer/display.html?nodeId=200324680 .

1st generation Kindle, no PDF.

 

[ELScorcho9]

Well played, Amazon. Well played.

 

[Rychy]

Wow, Amazon is only paying them 35% right now? That's pretty ridiculous.

 

[LagunaSol]

Amazon: "Apple nuke incoming! Hold on to something!!!"

^^ Steve Jobs ^^