Kindle Review – Kindle Fire Review, Kindle 4 Review

70% Royalties are the new status quo - Authors and Publishers can thank the upcoming Kindle, iSlate race for an absolutely amazing new world for Publishing.

Amazon offers a 70% Royalty Rate – with conditions readers will love

 Amazon’s new royalty rate option comes with some user-friendly (and Amazon friendly) conditions -

1. Book list price must be between $2.99 and $9.99.  
2. List Price must be at least 20% below the lowest physical list price for the same book in paper. 
3. Book must be made available for sale in all regions for which the publisher has rights. 
4. The Kindle features that Amazon offers for books such as Text To Speech must be enabled. 
5. Books must be offered in the Kindle Store at or below their price in other stores, including physical book prices.

In terms of the 70% royalties -

1. 70% royalties will be on the sales price.  
2. Download costs will be  deducted before calculating 70% royalties. Costs are 15 cents per MB.
3. Public domain works (those before 1923) will not qualify for the 70% royalties.
4. The existing royalty rate will still be an option.
5. The new royalty rate starts June 1st, 2010.
6. Initially the royalty rate will only be available for books sold in the US.

Amazon’s reaction to Apple iSlate content deals

Larry Dignan at ZDNet thinks its related to the Apple iSlate’s imminent release and he’s right.

With Apple offering Publishers 70% and more control over prices we would have Publishers try many things -

1. Get Apple a strong position in ebooks and then play them off against Amazon.
2. Release only for the Apple iSlate.
3. Release premium versions on the iSlate before releasing general versions on other eReaders.  
4. Disable features that are Kindle advantages i.e. no text to speech, etc.  

With this new 70% option Amazon does two things -

1. Gives Publishers the option to make 70% (which is hard to turn down) from book sales to the Kindle’s huge customer base. 
2. Gives authors the option to entirely bypass Publishers. Getting 35% royalties was tempting – A 70% royalty rate is irresistable.

It strengthens Amazon’s appeal to Publishers and weakens their hold over Publishing at the same time.

Let’s take a look at Apple’s efforts with the iSlate – after all its thanks to competition that we get the Kindle 70% royalty option.

Apple lures Publishers with 70%, the iSlate, and secret meetings

The Bookseller has the scoop on secret Publisher-Apple negotiations -

Publishers Marketplace reports that Apple representatives are in New York for meetings this week -

with “nearly all (and most likely all) of the six largest trade publishers”

The main aims of Publishers seem to be -

1. Fight the $10 price the Kindle has promoted and which Publishers consider unsustainable.  
2. Keep control of pricing and supply.
3. Fight the big discounts on bestsellers that retail stores push.
4. (Allegedly) Accelerate ebook adoption.  

Apple might negate Kindle’s lead by cozying up with Publishers

While tech blogs are salivating over color and apps and new user machine interaction paradigms from the iSlate, Apple might be approaching eBooks with a very practical and non-glamorous approach -

1. Offer better terms than Amazon to Publishers – the 70% rate. 
2. Let Publishers have control over pricing.  
3. Give Publishers some other types of control - for example, ebook supply.
4. Lock up the content providers and lock out Amazon.

In the end content (the ebooks themselves) is the single most important variable and Publishers still control most of the quality content.

What really matters is that we are at 70% Royalties

Apple and Amazon are both going to be around for a long time.

The really important change the iSlate’s entry heralds is the shift to 70% royalties.

Take the Kindle Store or the App Store -

1. All you have to do is create content and sign up. 
2. Of course, it helps to do a ton of marketing.
3. The store is set up for you. 
4. Distribution, buying, and all the important facets are covered. 
5. You can sell all around the world.
6. You get a payment in your bank account at the end of the month.

Authors just have to focus on content creation and marketing – the rest is taken care of for them and all they have to give up is 30%.

Who would have thought we’d see 70% royalties – Publishing has changed more in the last 2 years than in the century before.

Filed under: iSlate Apple Slate, kindle Tagged: | 70% royalties, future of publishing, kindle vs apple