In The News: Amazon to Up Authors' Royalties--Drastically

Amazon is in the news. The thing is, though the major media is covering the story, they aren’t covering it from an author’s viewpoint. So here goes. My take for authors. In the smallest nutshell I could fit it into:

The LA Times business page headlines, “Amazon Ups the Ante for E-books.” Then comes a deck (fancy newspaper talk for a sort of subtitle) that says, “Juicy digital royalties could tempt authors to bypass traditional publishers altogether.”

So far they have it right.

As a quick review, the VP of Amazon says, “Today, authors receive royalties in the range of 7% to 15% of the list price that publishers set for their physical books . . . . “ Amazon just announced that they would pay a whopping 70% royalty to authors who publish their book(s) on Kindle.

Here are the advantages and disadvantages. You decide which, though you’ll usually be able to tell which side I’m on!

~Authors set their own price for the Kindle digital version of their book but it must be between $2.99 and $9.99. Sure Amazon is trying to maintain a low retail on all their Kindle books. Low prices attract buyers.

~The price the author sets must be at least 20% lower than the same book in its print edition.

~Authors are free to place their books with other readers or in other formats (like B&N’s Nook and Sony’s Reader), but they must set the Kindle price lower than or the same as the price they ask for in other digital formats.

~Authors must sign over some rights to Amazon including the ability to turn the book into speech and to allow Kindle to use the book on future iterations of the Kindle reader. This applies only to digital copies. not print.


From there most all the news outlets are focusing on the timing of Amazon’s announcement: That it coincides with an expected announcement that Apple will be making an e-reader of its own.

Or they’re focusing on the fact that this offer is not going to make traditional publishers happy. Well, duhhhh. They’re not happy about any of Amazon’s strong competitive stances on the pricing of books (and other perks). In the past several of the real big publishers started delaying the release of digital editions until long after hardcovers and paperbacks were released. That’s been sort of standard for publishers. They’ve also delayed the release of paperbacks some time after hardcovers. That policy only makes sense.

Articles in the business media are focusing on the influence Amazon has on the publishing world in terms of pricing. And about Amazon’s brute commercial power.

So, how will this specifically affect authors?

~It won’t mean much to those who are traditionally published other than that they might want to press for better royalties on Kindle sales when they sign their contracts. And, of course, the long term effect this move may have on publishing in general.

~To indie authors--self published or subsidy published--it means that having their books offered digitally will be more important than ever. It won’t just be about making their books available to readers the way they want to read them at a good price, it will be about making their books available at the only price some may feel they can afford. The price differential can make a difference but so will the rush by authors to have their books available on Kindle and the more books, the more choice, the more reading folks are going to like that.

~If more people are buying books because they’re cheaper, that broadens an author’s audience. The more people who read a good book, the better a book sells. Remember when Clinton said “It’s the economy, stupid!” Well, it’s the word-of-mouth, stupid.

~I like this last reason best (though there may be other I haven’t thought of). Here it is. Amazon, once again, is giving more power to the author. Even the new author, the emerging author. Treating us as if our pocketbooks are important. That’s a move in the right direction. With their clout, they may start a trend.

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Carolyn Howard-Johnson, author of This Is the Place; Harkening: A Collection of Stories Remembered; Tracings, a chapbook of poetry; and two how to books for writers, The Frugal Book Promoter: How To Do What Your Publisher Won't and The Frugal Editor: Put Your Best Book Forward to Avoid Humiliation and Ensure Success. Her FRUGAL book for retailers is A Retailer’s Guide to Frugal In-Store Promotions: How To Increase Profits and Spit in the Eyes of Economic Downturns with Thrifty Events and Sales Techniques. She is also the author of the Amazon Short, "The Great First Impression Book Proposal". Some of her other blogs are TheNewBookReview.blogspot.com, a blog where authors can recycle their favorite reviews. She also blogs at all things editing, grammar, formatting and more at The Frugal, Smart and Tuned-In Editor blog.

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