Money Matters, Simplified.
Amazon hikes royalties by up to 70%
Amazon.com Inc. Wednesday unveiled a new royalty program that will allow self-published authors (who use the Kindle Digital Text Platform (DTP)) to earn 70 percent more in royalties on each e-book sold.
by Priyanka - January 21, 2010 - comments
This new program will pay participating authors more per book than what they earn from the sale of hardcover books as long as they agree to certain terms. The program will go in effect starting June 30.
Amazon clarified that the new program will be in addition to the present DTP standard royalty option--set at a 65-35 split, where 65 percent goes to Amazon.
The delivery cost of the book will be based on its file size and price will be set at 15 cents per megabyte.
According to the press release notes by Amazon, "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."
Terms of 70 percent royalty option
- The supplied list by the author or publisher must be priced between $2.99 and $9.99.
- The titles will be made available for sale in all the geographies for which author/publisher has rights.
- The list price should be 20 percent below the lowest physical list price for the hardcover book.
- The listed title will be included in a large set of features in the Kindle Store like text-to-speech. This "list of features will grow over time as Amazon continues to add more functionality to Kindle and the Kindle Store," says Amazon.
- As per the new royalty system, books must be offered at or below the price being offered by its competitors that also includes physical book prices. 70 percent royalty will be calculated off the sales of the books.
- This new scheme applies to in-copyright works, and will not be provided for the works published before 1923 (aka public-domain books).
Amazon gearing up to face new competitors
At present Kindle rules e-reader market as an undisputed king, but the industry experts believes that the scenario might change if Apple unveiled its rumored Tablet next week.
Reportedly, Apple’s tablet is directly aimed at the Kindle with its own unique e-book distribution system. This might have prompted Amazon to make the recent move to stay ahead in the game where content on the device matters a lot.
Even without worrying about Apple’s tablet, Amazon is facing competition in the e-reader market that is filled with numerous readers, such as Barnes & Noble’s Nook, that are prettier and feature rich compared to Kindle.