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Amazon Increases Kindle Royalties For Self-Publishers

January 21, 2010

Authors and publishers who use a self-publishing platform on Amazon’s Kindle electronic book reader are being offered a higher royalty payment on any downloads, AFP reported.

Amazon stated that the new royalty option would allow authors to keep 70 percent of the list price of a digital book minus delivery costs, which works out to around six cents per unit.

The amount of the previous standard royalty option has not been released.

However, with the new 70-percent option, an author would make $6.25 on an $8.99-dollar book compared with $3.15 with the standard option.

The new 70-percent option will be available from June 30, according to Amazon. But it comes with a number of conditions.

The list price of a digital book must be between $2.99 and $9.99 and 20 percent below the lowest list price for the physical book. Amazon said the 70-percent royalty option only applies to in-copyright works and, for the moment, is only available for books sold in the United States.

The new royalty option was significantly higher than that offered for many digital or physical books, according to Russ Grandinetti, Amazon’s vice president of Kindle content.

Grandinetti released a statement saying: “Today, authors often receive royalties in the range of seven 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.”

He said Amazon was excited that the new 70-percent royalty option for the Kindle Digital Text Platform would help the Seattle-based company pay authors higher royalties when readers choose their books for download.

Authors and publishers can format and upload their own books to the Kindle Store using the Kindle Digital Text Platform.

The Kindle announcement comes a week before rival Apple is widely expected to unveil a tablet computer that can double as an electronic reader on January 27.

Recent reports have surfaced that Apple is holding talks with book, newspaper and magazine publishers about making their content available for the device.

The new 70-percent royalty being offered by Amazon was in line with what Apple was offering publishers, according to Mark Mahaney, a Citigroup analyst.

Although Amazon’s Kindle is considered the runaway leader in the e-book reader field, Japan’s Sony, Britain’s Cool-er and U.S. bookstore Barnes and Noble among others have been increasing the competition for the Kindle.

Citigroup believes Amazon sold at least two million Kindles in 2009, Mahaney said. That accounts for as much as 70 percent of all e-reader sales, and some 35 million e-books, according for more than 80 percent of all e-book sales.

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