Amazon to start paying 70 percent royalties on Kindle books that play by its rules

Sure, you know how much you pay for a book on your Kindle, but do you know how much an author gets from that sale? For most it's probably some meager single-digit percentage, with the publisher taking the rest of the roughly 35% of revenue Amazon doles out. The remaining 65% goes straight into the site's coffers, but that's about to change. On June 30, Amazon is launching a new option in its Digital Text Platform (DTP) publishing scheme that would give authors and publishers 70% of the revenue, with Amazon taking just 30% -- effectively flipping the ratio on its head. The catch? There are plenty:

  • Distribution costs are now paid by the publisher, but that should be on average a few cents per book.

  • These books must sell for between $2.99 and $9.99 and must be priced at least 20% lower than a comparable physical copy of the book. (This is good news for readers, putting a greater incentive for lower-priced digital volumes.)

  • The book must support the "broad set" of Kindle features, including text-to-speech.

  • This will only be available for books that are in-copyright and only for those sold in the US.

This is an obvious reaction to the competition from places like Scribd, which pays publishers 80%, and publisher-friendly upstarts like Skiff, but it's also an interesting push to force more books to enable Kindle's text-to-speech. That is currently something of a sore spot amongst those who provide the content, so while we're sure authors will love the extra money coming here, we're wondering whether their publishers will take it given the possible loss of lucrative audiobook revenue. Will this help Amazon in the upcoming war of the e-readers, or will it hurt? We can't wait to find out.