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Amazon.com ups the ante for e-books

Juicy digital royalties could tempt authors to bypass traditional publishers altogether.

January 21, 2010|By Alex Pham

Amazon.com Inc. is playing hardball with book publishers.

The Seattle online bookseller said Wednesday that it would give authors a 70% cut of the sale of e-books sold for its Kindle readers, net of digital delivery costs -- essentially offering writers a way to bypass traditional book publishers.

In a direct swipe at print publishers, the company asserted that authors would make more money if they published digitally with Amazon.

"Today, authors often receive royalties in the range of 7% to 15% of the list price that publishers set for their physical books," Russ Grandinetti, Amazon's vice president of Kindle content, said in a statement. "We're excited that the new 70% royalty option for the Kindle Digital Text Platform will help us pay authors higher royalties when readers choose their books."

There are strings, of course. Authors must set the price of their books between $2.99 and $9.99 to qualify. If there is a physical version of the book, the Kindle price has to be at least 20% below the print copy.

Although authors are free to sell their books elsewhere, such as Sony's or Barnes & Noble's online bookstores, Amazon must be given the same or lower retail price.

Finally, authors would have to turn over to Amazon a broad set of digital rights to the book, including the ability to turn text to speech and all future features of the Kindle. The offer applies only to digital copies, not printed copies.

Amazon's timing is curious given that Apple Inc. has scheduled a news conference next week to reportedly unveil a tablet device that can be used as an e-reader, among other things. Apple has been making the rounds to publishers, studios and game companies to gin up content that would showcase the device's capabilities, numerous sources said.

Amazon's relationship with publishers has been strained, and Wednesday's move isn't likely to further endear the online retailer to its book vendors.

The source of tension? Amazon's pricing of new releases and bestsellers at $9.99 for download to its wireless Kindle. Publishers fear that the price will undermine its lucrative hardcover market, where books sell for $25 or more.

Three major publishers -- Simon & Schuster, Hachette Book Group and HarperCollins Publishers -- struck back at Amazon last year, announcing they would delay the release of digital copies of select titles for four months after the print versions' debut. (The move is akin to delaying a movie's DVD release until after it has hit movie theaters.)

In this light, publishers see Apple as a potential counterweight to Amazon's massive influence over the book market. Will Apple's terms be any better? We'll find out in a week.

alex.pham@latimes.com

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