Amazon Sweetens The Pot, Increases Royalties For Kindle Books
January 20, 2010 12:22 PM ET
Competition in the digital book world is heating up, with Amazon offering a bigger cut of royalties to writers and publishers. Today, Amazon said it would increase the fees it gives to authors and publishers of lower-cost books sold on its Kindle electronic reader.
Already, the Kindle is competing against Sony's Reader and Barnes & Noble's Nook. Amazon's "generosity" may also be an attempt to mute a threat by the anticipated launch next week of an Apple tablet device, rumored to be a formidable player in the e-book space.
As of June 30, authors and publishers will receive 70 percent of a book's list price, exclusive of delivery costs. Only discount books are eligible, those in the $2.99 to $9.99 range, and the book's list price must be at least 20 percent below the lowest listed price for the physical book, Amazon said in a statement.
Amazon did not divulge current royalty rates, but Russ Grandinetti, vice president of Kindle Content, said in a statement that authors generally receive between 7 percent and 15 percent of the list price for their physical books, or 25 percent of the net proceeds publishers get for their digital books.
If Apple does unveil a tablet soon, it will not only offer a substantial hardware challenge to Amazon's Kindle, but also a content distribution one as well. That could very well explain Amazon's sweetening the pot for content creators.
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