Print 21 comment(s) - last by OKMIJN4455.. on Jan 24 at 6:37 AM

New royalty rate is 70% minus delivery fees

Amazon helped bolster the eReader craze that is sweeping the globe today. Its Kindle wasn't the first eReader, but the new features and pricing of the eReader combined with the backing of the Amazon Digital Book store made the Kindle the most appealing eReader to hit the market.

Amazon is actively growing the library of digital book that are available on the device and recently it upgraded the Kindle DX with global wireless connectivity. Shortly after announcing the upgrade, Amazon also announced that it was opening its Kindle Digital Text Platform (DTP) to countries other than the U.S. and accepting books in English, German, and French languages.

Amazon announced today that it is now willing to share a higher royalty fee with authors and publishers who use the DTP. The new royalty fee is 70% of list price after removing delivery costs. Amazon points out that the new 70% program is in addition to the standard DTP royalty option already in place. The new 70% option will be available for publishers starting on June 30.

Delivery costs of the books are based on a price of $0.15 per MB meaning that the average 368KB book would cost about six cents to deliver. Amazon uses a book selling for $8.99 as an example. Under the current program, a book selling for $8.99 will get the author $3.15 per sale; the new program would get the author $6.25.

“Today, authors often receive royalties in the range of 7 to 15 percent of the list price that publishers set for their physical books, or 25 percent of the net that publishers receive from retailers for their digital books,” said Russ Grandinetti, Vice President of Kindle Content. “We’re excited that the new 70 percent royalty option for the Kindle Digital Text Platform will help us pay authors higher royalties when readers choose their books.”

There are numerous requirements to qualify for the new rate program. The price must be between $2.99 and $9.99 per book. The price must also be at least 20% below the price for a physical copy of the same book. The book has to be published in all parts of the world where the author or publisher has rights. The book has to be included in a broad range of Kindle features. Books published before 1923 will not qualify for the program and only books sold in America will be allowed in the program.

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Hmmm get them hooked now!
By jabber on 1/20/2010 12:41:56 PM , Rating: 0
Ok so the rate starts off at an attractive 70% and the greedy and the gullible sign on in droves.

Then it drops to 65/35 then 60/40 then 50/50 and so on till it gets back to 75/25 in Amazon's favour.

If it looks too good to be true.....

RE: Hmmm get them hooked now!
By jdietz on 1/20/2010 12:46:20 PM , Rating: 2
Hopefully they will drop prices some and pass on savings. And maybe realize more sales.
Not holding my breath though.

RE: Hmmm get them hooked now!
By OKMIJN4455 on 1/24/2010 6:37:38 AM , Rating: 1
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RE: Hmmm get them hooked now!
By bhieb on 1/20/2010 1:19:07 PM , Rating: 2
Sure so don't take advantage of it and miss the sales. Makes perfect sense /sarcasm.

Don't really care what the rate is if you have x number of kindle readers that want your book, not publishing it costs the author sales. The rate is negotiable, but in the end your other option is to take $0 for the no sales you'll get.

This does assume that the Kindle user would not buy a hard copy. And although that is not true for all of them, there is certainly a percentage that would not. Question becomes do you want to loose those sales?

Clearly this is a promotional deal, and you are right they will renegotiate, but why would you not want to jump all over that.

RE: Hmmm get them hooked now!
By Oregonian2 on 1/20/2010 3:03:45 PM , Rating: 2
One doesn't have to take it! As shown in the article, one can just stay with the current deal where they get half as much from the getgo.

I'd assume that in any such deal one can withdraw one's book if one sees fit. I doubt Amazon is given publication/distribution rights "forever" and at Amazon's discretion.

RE: Hmmm get them hooked now!
By phattyboombatty on 1/20/2010 5:31:09 PM , Rating: 2
Congratulations. You've offered up some of the most backward logic I've ever seen. Your argument is that authors shouldn't take this great deal because in the future it won't be available.
That's the same as somebody arguing, "Why would anyone ever buy this HDTV for $599 on Black Friday? Don't they know that after Black Friday it will jump in price to $699 until Christmas, and then go back to its regular price of $799 after the new year?"

RE: Hmmm get them hooked now!
By jabber on 1/21/2010 6:24:56 AM , Rating: 1
No it's just a ploy to get people signed up.

Banks use it all the time.

They offer a great savings account with 7% interest. Then every year it drops 1% till its worth next to nothing.

However by then then there could be another large enough e-reader publisher that will offer so folks will switch their next book to that and so on.

It's called churn. As I said it's too good to be true to be anything else.

Next year there will be a big stink because Amazon increases its cut.

RE: Hmmm get them hooked now!
By jabber on 1/21/2010 6:30:06 AM , Rating: 2
Essentially - Caveat venditor!

By all means folks should sign up for such a deal initially but they shouldnt expect it to last for any great period of time.

Amazon needs to push this and will do everything it can to attract people but it won't last.

RE: Hmmm get them hooked now!
By PrinceGaz on 1/21/2010 10:11:49 AM , Rating: 2
I see no reason why it should reduce from 70/30 in the author's favour. That's how it is on Apple's App Store where many of the apps are actually copyrighted books coupled with suitable reader software.

I don't see any sign of Apple intending to increase their share from 30% there, and with Apple's upcoming tablet, Amazon would be fools to offer authors and publishers less than Apple. Apple are actually already better than Amazon in that they do not deduct anything for delivery costs, and you are free to price your app at anything from free to US$1000 (I think that is the upper limit).

"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs
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