Corvus Consulting

A couple weeks ago I wrote about the looming obsolescence of Amazon’s Kindle ebook reader, and today Amazon has done an about face on one of the most toxic aspects of its grayscale device. From MacRumors we read:

Amazon today announced a revised royalty program for its e-book Kindle Store, significantly increasing the potential return to authors and publishers in exchange for commitments to meet certain feature requirements. The move, which takes effect on June 30th, essentially bumps the royalty payments to 70% of an e-book’s list price, up from the existing 35% rate that will remain in effect for publishers who do not wish to meet the requirements of the new program.

Firstly, a correction to my own statement that Amazon was sharing only 30% of revenue from Kindle titles with authors. But 5% doesn’t change that the pressure Amazon brought to bear on authors was threatening to reduce author returns to sweatshop wage levels, a position that could only be enjoyed from a de facto monopoly.

The timing and degree of the revenue share is particularly interesting, as Apple seems ready to spring a tablet onto the market that would likely inherit the App Store model of a 30%-70% revenue split, with App (and soon ebook) authors taking the bigger slice.

While it’s great that Amazon is making this move, it’s a sad statement that from the position of first mover their impulse was to impose such harsh terms on authors. The move also shows the threat to the Kindle that Amazon sees in an Apple table ebook reader.