Is Amazon’s 70% Royalty on E-books Worth the Restrictions?

In Discussion by Edward Nawotka

By Edward Nawotka


Today’s lead story by Emily Williams questions the “exclusive” status of e-book deals with Paulo Coelho and Harvard Business Review Press.  As she demonstrates, both Coelho and Harvard Business Review Press have offered e-book versions of their work for sometime, including titles that overlap with Amazon’s offerings.

Of course, the news that these two well-known brands (for Coelho is as much a brand as HBRP) opted to forge a relationship with Amazon and promote it as exclusive demonstrates the marketing power of the Amazon brand, and suggests they are offering these authors very favorable terms. Still, we don’t know the specifics and can only guess that it’s better than what they’re already getting from their traditional publishers.

On the other hand, the contracts Amazon is now offering to self-published authors is known: They are giving a 70% royalty on e-books sold through their site — a percentage far higher than that being offered by the conglomerate publishers (which typically ranges between 20-25%).

But there are restrictions: The royalty rate only applies to books priced from $2.99 to $9.99, and the price must be discounted at least 20% from cover price and “must be offered at or below price parity with competition”. The title must be offered in all countries where the author or publisher has rights and “the title will be included in a broad set of features in the Kindle Store, such as text-to-speech.” (Thanks to The Guardian for distilling the details.)

Essentially, to get that big royalty, you’re all but ensuring that gets a price advantage over their competitors (Apple…anyone?).

So, the question is: Do you think Amazon is asking too much for its 70% royalty on e-books? Or does it offer a unique opportunity for authors to take advantage of Amazon’s marketing muscle and take home more money from their sales?

Let us know what you think in the comments below or via Twitter using hashtag #ppdiscuss.

About the Author

Edward Nawotka

A widely published critic and essayist, Edward Nawotka serves as a speaker, educator and consultant for institutions and businesses involved in the global publishing and content industries. He was also editor-in-chief of Publishing Perspectives since the launch of the publication in 2009 until January 2016.