Alright – I need your help here. I read through a ton of sites and blogs and I distinctly recall reading a publisher talking about how Amazon gives only 35% of book sales of Kindle edition books to publishers.
Could someone confirm this? Deny it as just a rumor?
Basically, I think the fact that self published authors get 35% is great – because that’s a lot more than the royalties get with a publisher. However, if publishers are getting just 35%, that seems to be intractable given the much higher costs that publishers have. A few questions come to mind -
- Are Amazon-Publisher contracts done on an individual basis?
- Do smaller publishers get only 35% and bigger publishers get more?
- If it’s just 35%, how do publishers factor in their marketing and other costs? Also, doesn’t every hit book have to support 9 (or is it 99) failures?
- Is this all covered under NDA or are there official figures that I can get (and then share with you guys here)?
There are a lot of ramifications of Amazon’s moves on the whole Publishing Industry. It’s becoming clearer and clearer that Amazon wants to become the new publishing industry. Amazon has a huge chunk of online book sales – however, it has very low profit margins. And there isn’t that much growth (in terms of increasing its share of online book sales) left. That means the logical direction to go in is creating the product itself. And the parallels with Google come into play again – Google is going into becoming a media company and creating content (YouTube, Knolls, etc.) – because it’s already dominated its market.
Publishers are going to have to do what TV networks did by creating Hulu and taking on YouTube. An alternative to Amazon’s Kindle Store, and an alternative to Amazon’s Whispernet. If they do a move like this within the next 6-12 months they might still have a chance.
Yes, Amazon only gives 35% to publishers, big or small, who go through the DTP system. I recently heard from a reputable source that if you are a big publisher, and you work with Amazon on Search Inside, and you give them certain types of files for your books (I think ePub) then they are willing to make deals at 45%. No one is getting more than that, as far as I know.
And before anyone says how terrible that is, you should look at what people get from print versions. 5-10% is not uncommon. I’d love to get 35% of the selling price.
Do publishers get more than that from print books?
I vaguely remember the negotiations between the house I was working in and Amazon. I know Amazon wanted a 50% discount and we were trying to figure out if that was acceptable. Our CFO said it was crazy since it was roughly a 50% discount off retail and most of our agreements were around the 40-45% mark. I can’t believe Amazon were able to strong arm their way up to a 65% discount with the major houses for something that is basically a distribution agreement. It’s been a while since I’ve seen a contract with them, so I can’t vouch for what they’re doing now. I also know no one in the industry was talking about the agreements they reached with amazon before the launch, and these were all publishers who were in the search inside program so there weren’t any files to transfer. Maybe they added conversion costs?
%s are meaningless
Does an Amazon contract
make you money ?
On Kindle will your bottom line
be as good ?
Or better?