Amazon turns writers into app makers

Online bookshop Amazon is stepping up the production of ebooks by treating UK authors and publishers the same as an app developer.

The outfit has announced a 70 percent royalty offer for UK authors and publishers for its Kindle platform.

From the authors side of things it means that they can get their books onto the ebook market and take a bigger cut of the profits. Currently book distribution is hamstrung by the huge cost of distribution. Some distributors take a 60 percent cut of the book’s final price. It is common for authors to make between three and 10 percent of the final book price. That is great if you have a best seller, but few authors get into this league.

Theoretically ebooks should enable authors to take control of their work, usually at the cost of having to market it themselves. But in reality, the publishers and the distributors still take a sizeable cut.

Amazon’s Digital Text Platform (DTP) allows authors to upload their books and make money from the books sold to Kindle and other ebook device owners that can use Amazon’s system.

The new royalty system gives authors and publishers five percent more royalty than the previous DTP deal, bringing it into line with the 70/30 split that Apple applies to the sale of its apps through the iPhone.

All good stuff, as it could result in a lot more books being independently created. True standards could slip but since a huge number of books end up on the scrap heap because they cannot find a publisher this can only be a good thing.

Books receiving the 70 percent royalty option will have access to the same features (and be under the same rules) as books on the standard DTP royalty rate. There are some conditions.

The author or publisher-supplied list price must be between £1.49 and £6.99 and the list price must be at least 20 percent below the lowest list price for the physical book. This should mean that authors will pitch ebooks at a lower price hoping to score the higher royalty.

According to Amazon delivery costs are based on file size, and pricing is set at £0.10/MB. The average DTP file size is 368KB so delivery costs would be less than £0.04 per unit sold.

Practically what it means is that on a £5.99 book an author would make £2.10 with the standard option and £4.17 with the new 70 percent option.

The move aims to get more content on Amazon and see off intrusions from companies using the Sony Reader. At present there is a shortage of content available in ebook format and the price is often about the same as a traditional book. Amazon must be hoping that it can use the royalty deal to get a ton of low cost material into its store.