June 30, 2010
Amazon has launched higher royalties for digital books from do-it-yourself authors and publishers, opening up a new front in the battle among online booksellers.
Amazon on Wednesday increased to 70% the royalties paid to participants in the retailer's self-publishing Kindle Digital Text Platform. The change means authors can almost double the amount they receive from book sales. However, the offer has a catch that's tied to Amazon's overall strategy of using price to attract more customers than competitors. To qualify for the new rate, participants will have to sell their books for between $2.99 and $9.99 and the price must be at least 20% below the lowest list price for a physical book. In addition, the Amazon-carried title must be available in all geographies where the book is sold and the price has to be at or below the price offered by competitors. The new royalty option is available only for books sold in the United States. Amazon is still offering a less-restrictive standard royalty of 30%. Both options are less electronic file delivery costs of 15 cents per megabyte. Amazon announced in January plans to launch the new royalty rate. The offer is much higher than that for printed books, which Amazon says is often in the 7% to 15% range. Amazon's latest offering is higher than Google's Editions program, which is scheduled to launch this year with a 63% royalty offering. Amazon's offer is in line with Apple's iTunes App Store, which offers app publishers -- many of whom have turned their books into apps -- 70% royalty. Yet to be seen is how Barnes & Noble will respond. The bookseller plans to launch its self-publishing platform, Pubit, this summer, but hasn't announced royalty rates.
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