Authors have just won a great battle in the war over their royalties without having to negotiate anything. Since the Kindle was released, our agency has been unwilling to embrace the platform, not because of the technology but because of the business model. Amazon claimed 65% of all revenues, a full 15% higher than common retailer rates for paper books. We have always favored the Apple iTunes/App Store model that pays the owner 70% of all revenues. Apple just hasn’t been selling ebooks. With Publishers receiving only 35% of the retail price of Kindle books, they’ve been unable to offer authors more than 15% for selling the authors words in electronic form; a crazy bad deal since there’s no physical book involved and zero risk of returns. While some publishers have obtained better terms from Amazon, all details have been secret and authors and agents had to agree to royalty rates, the value of which lay beyond a locked door.
A few days ago, Amazon opened the Kindle to individuals who could format to their standards. This was big news because previously Amazon wanted authors to go through “publishers” who would rake off income, but do little beyond formatting text files.
Today, Amazon has adopted the Apple model. Why? Because the rumors of the Apple iTablet-thingy are so compelling. We will have more as this develops but you can read the news at many business websites. Here’s the Motley Fool Story.
There are hooks and obligations in this new Amazon business model, so this does not mean that every author should jump in blindly. However, it does mean that published authors with control of their out of print backlist can now consider ebooks as a viable business. Our advice is that while this is good news: good for Kindle owners, good for authors, and good for Amazon; we should all wait until after January 27 to start negotiating contracts so we can see what Apple announces.
Interesting stuff. Something I’ll have to keep an eye on. What are your thoughts about the Apple iTablet?