Amazon Ups The Ante On Kindle Royalties

January 22, 2010 by trisha

launch of Apple’s new tablet device which will also have e-reader capabilities right around the corner, Amazon could not have timed the news of their improved royalty share program more perfectly.

Proof that competition does in fact result in a better situation for all involved, this new program is considerably better for publishers than the contract it will replace in June of this year. It also ensures that prices will remain competitive for consumers.

Under the terms of the new agreement, Amazon will increase the percentage of each sale that goes to the publisher to 70% after delivery costs, up from 35%. To capitalize on the essential doubling of royalties publishers must ensure their product meets the following specifications.

The Conditions

  • The book’s list price must fall between the $2.99 and $9.99 range.
  • The book’s price must also be at least 20% below the lowest price of the physical edition of the book.
  • The author and/or publisher must ensure that Amazon’s price is the lowest or equivalent to the price of the book on all other competing sites.
  • The new royalty structure will not apply to books first published in or before 1923.
  • The increased royalties will also only be available on books that are sold in the US initially.

Amazon’s move to secure some market share by sweetening the deal for publishers is certainly not done out of a burst of generosity. Several companies have revealed that they plan to release competing e-reader devices and some of these models boast features the Kindle does not have, like touch screen capability and color.

Of course the most notable of these would be the Apple tablet device mentioned earlier that is set to be released next week.

Clearly Amazon has decided to use its head start on the e-reader market to ensure it keeps a considerable portion of electronic reading sales revenue. Newer entrants that still need to prove their viability may not be able to afford to match this generous royalty offer, especially if they did not predict Amazon’s bold move.

Only time will tell just who will emerge the e-reader king, but Amazon’s new royalty share program definitely ensures that it is still very much in the race.

When Apple releases its reader next week consumers will really see if they will be able to compete in terms of price or if they may find themselves floundering in the gust of wind that this price strategy has put in the sails of Amazon’s Kindle.


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