Amazon just announced that it is now offering publishers and authors a new 70% royalty option. Publishers and authors who choose this option will receive 70% of the list price from sales of their e-books in the Kindle store. In order to qualify for this option, publishers have to turn on the text-to-speech feature and make the e-book available in all locations for which the author or publisher has rights. In addition, publishers also have to sell the e-book for at least 20% below the price of the physical book and can’t charge more than $9.99 for the Kindle edition.
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As Amazon notes in today’s press release, publishers and authors who choose the standard royalty option would only make about $3.15 from every sale of an e-book that sells for $8.99. Now, with the 70% option, these publishers would make $6.25.
The 70% royalty option will become available for U.S. publishers on Jan. 27.
This is an interesting move by Amazon. A 70% royalty has become the standard among numerous industries, including Apple’s App Store. Of course, there are rumors that Apple will open up its own e-book store when (if?) it launches the Apple tablet/iPad/iSlate. According to the latest rumors, Apple is currently talking to a number of U.S. publishers in order to bring these publishers’ e-books into the iTunes store or into a new Apple e-book store.
Publishers have long been unhappy with Amazon’s decision to keep e-book prices low by subsidizing them. Giving publishers a higher cut of the royalties as long as they fulfill Amazon’s requirements looks like a concession to these publishers. If Amazon expects to see competition from Apple in the near future, then this move would make even more sense.