Amazon Increases Author DTP Royalties to 70%

Amazon has announced a change in their royalties for authors and publishers using their Amazon Digital Text Platform to publish their books, with a new royalty rate of 70% net after delivery costs, provided they meet certain conditions.

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.

Each book listed on the Kindle platform may choose the old or the new pricing structure, which is good for indie authors who are currently listing books below the minimum to quality for the new rates. The rates also don't apply to any public domain books, so all those republishing Pride and Prejudice are out of luck. There are a few other conditions, as well:

• 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.

Looks like they are making publishers that disable features, restrict global sales or price gouge on ebooks, put their wallets where their principles are. There are a few gotcha's hiding in there - Amazon has the ability to set any price they wish and the 70% royalty will be based on the end sales price, not the list price set by the author/publisher. Those who have massive files, due to including lots of high resolutions pictures or multiple copies of the cover (I counted five in one book) will pay a penalty, as the delivery charges are higher. But most customers will love the new structure, as it will guarantee global access and TTS on all titles that choose the higher payment plan.

The Terms and Conditions page doesn't yet reflect the new rates, which become an option for US authors on June 30, 2010 (with International authors to be added later), but you can read the press release HERE.