Amazon made an announcement last week about the Kindle e-reader and changes to their royalty scheme for authors that may have caught your eye. I will do a quick recap:

Amazon announced it is providing authors and publishers with a “70% royalty option” for books sold on the Kindle. The new royalty regimen seems to be squarely aimed at keeping Amazon as the’ top of mind’ publisher for e-books, especially in light of the enormous number of new readers that were unveiled at the recent Consumer Electronics Show (CES) and the breathlessly awaited arrival of an Apple tablet device. The new percentage of 70%, from the current royalty of 35% per title, comes with a number of restrictions. These include:

• The actual price of the book must fall between $2.99 and $9.99 and be at least 20% below the lowest price of a physical edition of the same book.
• It has to sell for the same price, or less, as it does with competing booksellers.
• It has to be available everywhere the author or publisher has intellectual property rights.

According to Amazon’s announcement, “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.” To see the entire announcement, go here.

My take: The royalties question is very important to authors, obviously, as that’s how they eat.  Amazon’s announcement has a sobering effect on competitors and publishing houses, as many authors may opt to move their works to direct publishing by Amazon, foregoing the services (and fees) associated with working with a publishing house.

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