January 25, 2010
Damage Control for eReader Content Competition: Kindle Content Providers to Get Larger Royalities But With Strings Attached
Amazon is offering increased royalties on Kindle book sales but with some interesting strings attached. Starting in June, royalities will increase to 70% of list price (net of delivery costs). 70% sounds like a hugh increase since content providers now receive 7-15% of the list price for physical books, and 25% for digital books but to benefit from this new royality payout list prices, Kindle editions must be between $2.99 and $9.99, and at least 20 percent below the lowest price of the physical edition of the book; the title also must be “offered at or below price parity with competition, including physical book prices.”
Mashable's Stan Schroeder thinks this change may have something to do with the unveiling of Apple's slate computer and and deal Apple is likely to offer their publishers.
It could be that Amazon’s timing with this news has nothing to do with Apple’s upcoming mythical tablet, but because the new 70% royalty option actually becomes available much later this year — on June 30, 2010 — it’s probably some sort of damage control in anticipation of the deal Apple will give the publishers for books and magazines sold through the Tablet. The reasoning is simple: One week before Apple tablet is announced, you give your partners a better deal and some time to think in case they planned to jump ship.
By the way, while the Apple slate computer, which some are calling "iSlate," is expected to be announced on Wednesday, Jan. 27, Apple Insider reports the it may not to be available for sale until June. [JH]