Amazon Announces 70 Percent DTP Royalty no comments
In a press release this morning, Amazon announced that publishers and authors who use the Kindle Digital Text Platform (DTP) will be able to earn royalties of 70 percent of list price less delivery costs.
"Today, authors often receive royalties in the range of 7 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," said Russ Grandinetti, Vice President of Kindle Content. "We’re excited that the new 70 percent royalty option for the Kindle Digital Text Platform will help us pay authors higher royalties when readers choose their books."
While publishers and authors will be able to earn a bigger percentage from ebook sales if they use DTP, there are some requirements:
DTP authors and publishers will be able to select the royalty option that best meets their needs. Books from authors and publishers who choose the 70 percent royalty option will have access to all the same features and be subject to all the same requirements as books receiving the standard royalty rate. In addition, to qualify for the 70 percent royalty option, books must satisfy the following set of requirements:
- The author or publisher-supplied list price must be between $2.99 and $9.99
- This list price must be at least 20 percent below the lowest physical list price for the physical book
- The title is made available for sale in all geographies for which the author or publisher has rights
- The title will be included in a broad set of features in the Kindle Store, such as text-to-speech. This list of features will grow over time as Amazon continues to add more functionality to Kindle and the Kindle Store.
- Under this royalty option, books must be offered at or below price parity with competition, including physical book prices. Amazon will provide tools to automate that process, and the 70 percent royalty will be calculated off the sales price.
The 70 percent royalty option is for in-copyright works and is unavailable for works published before 1923 (a.k.a. public domain books). At launch, the 70 percent royalty option will only be available for books sold in the United States.
The $2.99 to $9.99 price range requirement could mean that we will see fewer Kindle books priced less than $2.99. This may be offset to some extent by the additional requirement that “This list price must be at least 20 percent below the lowest physical list price for the physical book.”
More publishers might be enticed by the new terms to allow text-to-speech, and the part about Amazon continuing to add more functionality to the Kindle ereader and Kindle store sounds promising.
There have been persistent reports that Apple has been negotiating better revenue splits with publishers for content for its upcoming tablet (iSlate or iPad or whatever it will be called), which probably had a lot to do with this move by Amazon.
With the formidable competition facing the Kindle ereaders from all of the recently announced new ereading devices coming to market soon, Amazon will obviously not try to maintain the Kindle’s dominance by just engaging in an endless hardware arms race. The Kindle store is definitely one of, if not the biggest feature of the Kindles that sets them apart from the competition.
Last week Amazon announced that the Kindle Digital Text Platform was being expanded to enable authors and publishers worldwide to publish books in the Kindle store in English, German and French. This is great for international indie authors and the Kindle store needs more non-English language titles as the Kindle goes global. Hopefully we will see more languages added soon.
Amazon has also been striking deals with authors to provide their books exclusively in the Kindle store. For example, earlier this month Paulo Coelho signed on to make 17 of his books available in Portuguese for the Kindle. Coelho is the author of “The Alchemist”, and is the best selling Portuguese language author ever.
Several of the highest profile new ereaders and multi-function devices with ereading capabilities will probably appeal mostly to gadget boys and girls, but hardcore readers are the customers who buy the most ebooks, and this is the audience that the Kindle is aimed at. To maintain its position as the number one ereader for readers, the Kindle needs to have the best content store behind it, and Amazon is obviously not standing still.
