Amazon offers authors 70% royalty in new ebook deal

Amazon has announced plans to offer a much bigger royalty on ebooks, in a move that could also be intended to fend off competition from Apple.

From 30 June, US-based authors and publishers will have the option to choose a 70% royalty of the list price, after subtracting delivery costs of 15 cents per megabyte (about 6 cents per book). Amazon says: "on an $8.99 book an author would make $3.15 with the standard option, and $6.25 with the new 70% option."

There are, of course, restrictions. The new deal only applies to books that cost from $2.99 to $9.99; the list price must be at least 20% below the book price; 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".

Finally, Amazon says the books "must be offered at or below price parity with competition". This will prevent authors and publishers who take the deal from undercutting Amazon if they do similar deals with Apple.

Apple has established the 70/30 split through the success of its iPhone App Store. There have been rumours to the effect that Apple has been talking to authors and publishers about providing content for its forthcoming iTablet/iSlate/iPad, such as books and newspapers, and it is assumed these would also involve a 70/30 split.

Amazon risks losing a chunk of its ebook business to Apple if Apple offers both a better e-reader than the Kindle and more attractive content deals. But any prospect of that should be clearer in another week.