Amazon's New Plan for eBooks: 70% Cut For Publishers, $10 Max Price

Illustration for article titled Amazons New Plan for eBooks: 70% Cut For Publishers, $10 Max Price

Amazon's finally got some competition—and may be about to get even more—so they're doing everything they can to stay competitive, and to keep publishers happy. This means higher revenue cuts, but also new rules. Interesting rules.

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The new system works like this: If they elect to publish under this new program, publishers are entitled to 70% of a books sale price, minus delivery costs, at $0.15/MB. (Amazon says the average book size now is about 368k, which would cost six cents to deliver). This is practically an inversion of their current scheme which saw publishers getting less than half of the book's sale price, so on the surface this is a very good thing.

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So why would Amazon suddenly offer this plan? The answer's in the fine print:

• 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.

So Amazon's willing to cut you a better deal on your books if and only if you undercut your physical copies (DIE BOOKS DIE), let Amazon sell it with text to speech or whatever other presentation techs Amazon might come up with later, and you conform to Amazon's vision of $10-or-less prices for all ebooks. Larger publishers already follow these rules most of the time, and often negotiate their individual deals behind closed doors, so this plan may be directed at smaller companies, but should be available to all.

It's ballsy, and a little iTunesy, and in the end, the announcement makes a lot of sense—as does its timing, just days before Apple may or may not announce their entry into ebookery, which could be accompanied by an ebook store of its own.

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Amazon's new revenue scheme will be available starting in June, alongside their current DTP program. [Amazon]

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DISCUSSION

theghostofjimmadison
The Ghost of James Madison's Rage Boner

As someone who has published a few books and worked along the periphery of the publishing industry for over a decade, I'm really wondering when people are going to realize that the ebook model doesn't just threaten the traditional publishing model, it threatens to make publishers irrelevant.

If I'm an author, and I want to publish a print book and have any chance of seeing it in bookstores, I have little choice but to go the traditional route: agent, publisher, and standard royalty structure.

But if I want to publish an ebook, and I have a good command of the English language or at least the means to get assistance from a competent editor, WTF do I need a publisher for? With some inexpensive software and a little practice, I can create an ebook that looks exactly the same as something from the major publishers. Plus I get all the proceeds after Amazon's cut.

Yeah, there's the marketing issue, but marketing your book isn't rocket science; it just requires some legwork.

Sooner or later, people are going to realize this.