Amazon’s 180 on eBook Revenue Splits
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.
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[...] In fact, book stores (which again, I love) aren’t very practical. They’re not practical for the consumer or for the industry. To the consumer, it’s so much easier to download an ebook than to drive to the store, scour the shelves, ask the snarky sales associate for help, find out they have to put it on order, and finally come back a week later to actually purchase the darn thing. For the industry, the physical locations and the sales staff are extra expenses that arguably add to the cost structure of the industry without adding to their value proposition. In fact, typically publishers give book stores a 50% discount on the retail price of the book. That means, half of the cost of a book I buy at Barnes and Noble, for instance, is for my shopping experience! (Granted, Amazon gets a 30% share of their ebook sales.) [...]