Amazon Wants 70% of Newspaper Revenue for Kindle Distribution?

Illustration for article titled Amazon Wants 70% of Newspaper Revenue for Kindle Distribution?

Yesterday, on my Twitter account, I made the snide remark that the Kindle DX was saving newspapers through a $500 donation to Amazon. Apparently, my cynicism wasn't that far off the mark. UPDATE

According to James Moroney, President and CEO of the Dallas Morning News, Amazon demands a ludicrous cut of newspaper sales for distribution on the Kindle. From his talk with the Senate:

The Kindle, which I think is a marvelous device, the best deal Amazon will give the Dallas Morning News-and we've negotiated this up to the last two weeks-they want 70 percent of the subscriptions revenue. I get 30 percent, they get 70 percent. On top of that they have said we get the right to republish your intellectual property to any portable device. Now is that a business model that is going to work for newspapers?


You'd think that Amazon would be smarter, taking a cue from Apple's iTunes and just skimming enough off the top of subscriptions to sell more Kindle hardware. But then again, Amazon is in a tricky situation. They're a retailer at heart, not a hardware manufacturer. And they're attempting to make money on both sides of the print business.

Surely, the NYT didn't agree to such a one-sided Kindle distribution model. But Amazon seems ready to milk smaller papers like the Dallas Morning News for all they're worth...which I'm doubting is very much to begin with. [paidContent via CrunchGear and Image]

UPDATE: Maybe the NYT doesn't have a better deal than the Dallas Morning News. According to a reliable source in the know, The New Yorker's Kindle split is divided 33% New Yorker, 33% Amazon, and 33% wireless carrier. Without ad subsidies, it's hard to view this model as sustainable.

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Seems the Prime Directive Don't Be Evil is just falling on deaf ears. Amazon wanting to make beau coup bucks off of both ends of the business is just flat out stupid. If you play nice with content providers at least a little, you have greater incentive for others to join in and make a more attractive piece of hardware. This will not end well for them, or at least, I hope it doesn't.