Amazon hikes Kindle royalty payment for self-publishers

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The Independent Culture

Amazon offered a higher royalty payment on Wednesday to authors and publishers who use a self-publishing platform on its Kindle electronic book reader.

The online retail giant said the new royalty option will allow authors to keep 70 percent of the list price of a digital book minus delivery costs, which work out to around six cents per unit.

Amazon did not reveal the amount of the previous standard royalty option.

But the company said that with the new 70-percent option an author, for example, would make 6.25 dollars on an 8.99-dollar book compared with 3.15 dollars with the standard option.

Amazon said the new 70-percent option will be available from June 30.

It comes with a number of conditions.

The list price of a digital book must be between 2.99 dollars and 9.99 dollars and 20 percent below the lowest list price for the physical book.

The Seattle-based Amazon said the 70-percent royalty option only applies to in-copyright works and, for the moment, is only be available for books sold in the United States.

Russ Grandinetti, Amazon's vice president of Kindle content, said the new royalty option was significantly higher than that offered for many digital or physical books.

"Today, authors often receive royalties in the range of seven 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," Grandinetti said in a statement.

"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."

The Kindle Digital Text Platform allows authors and publishers to format and upload their own books to the Kindle Store.

Amazon's move comes less than a week ahead of a hotly anticipated product announcement by Apple, which is widely expected to unveil a tablet computer which can double as an electronic reader on January 27.

According to various reports, Apple has been holding talks with book, newspaper and magazine publishers about making their content available for the device.

Mark Mahaney, a Citigroup analyst, said the new 70-percent royalty being offered by Amazon was in line with what Apple was offering publishers.

Amazon's Kindle is considered the runaway leader in the e-book reader field but has been facing increasing competition from Japan's Sony, Britain's Cool-er and US bookstore Barnes and Noble among others.

Mahaney said Citigroup believes Amazon sold at least two million Kindles in 2009, accounting for as much as 70 percent of all e-reader sales, and some 35 million e-books, according for more than 80 percent of all e-book sales.

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