New 70 Percent Royalty Option for Kindle Digital Text Platform - Update

Today AMAZON announced, through Business Wire, its new 70 percent royalty option for the Kindle Digital Text Platform (DTP) that will enable authors and publishers to earn more royalties from every book sold.  For now, this is "available only for books sold in the United States."

I imagine this must be a fast response to Apple's offer to give publishers and authors more of a cut than Amazon has in the past - though the option is for publishers and authors who submit books through Amazon's Kindle DTP.  I don't know how that works with the big companies like Harper Collins, but ZDNet opines today that this would "throw them a bone" while still trying to keep prices down and reader-popular features intact.

  The option of course comes with an agreement that publishers and authors agree to allow several features such as text-to-speech for the book (well done!).

  The new option is "70 percent of list price, net of delivery costs" and "will be in addition to and will not replace the existing DTP standard royalty option.  This new 70 percent royalty option will become available on June 30, 2010."

  In addition, Amazon explains:

' Delivery costs will be based on file size and pricing will be $0.15/MB.  At today's median DTP file size of 368KB, delivery costs would be less than $0.06 per unit sold.  This new program can thus enable authors and publishers to make more money on every sale.  For example, on an $8.99 book an author would make $3.15 with the standard option, and $6.25 with the new 70 percent option.

"Today, authors often receive royalties in the range of 7 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," said Russ Grandinetti, Vice President of Kindle Content.  "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." '

And here's the important part:

' ... Books from authors and publishers who choose the 70 percent royalty option will have access to all the same features and be subject to all the same requirements as books receiving the standard royalty rate.  In addition, to qualify for the 70 percent royalty option, books must satisfy the following set of requirements:

 * 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.

The 70 percent royalty option is for in-copyright works and is unavailable for works published before 1923 (a.k.a. public domain books).  At launch, the 70 percent royalty option will only be available for books sold in the United States.

The Kindle Digital Text Platform is a fast and easy self-publishing tool that lets anyone upload and format their books for sale in the Kindle Store. To learn more about the Kindle Digital Text Platform, visit http://dtp.amazon.com/ '

Excellent analysis by Silicon Vally Insider.