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Amazon Kindle moves to App Store's 70/30 revenue split

by Mike Schramm Jan 20th 2010 at 4:30PM

Most of the rumors coming out about next week's event say that there'll be a tablet with a lot of similarities to the popular Amazon Kindle device, but even before Apple takes the stage, Amazon is taking one of the new ideas for its own. The online retail powerhouse announced that it is adapting a payment model for content providers that's very similar to the App Store, with a 70/30 split on pay sharing. There are a few limitations (there's still a cost for delivery, and the publisher has to conform to a number of price, feature, and location standards), but essentially, Amazon is taking the exact same model that has worked so well for both Apple and its development partners, and bringing it to the Kindle platform.

The timing is interesting -- with Apple just about to release what many expect to be a Kindle competitor, you have to wonder what Jeff Bezos is thinking. You have to wonder what Apple will do, too: while there are certainly all kinds of other things the theoretical tablet can do, it's possible that, if they are as close as some people think, Apple and Amazon will end up competing over content delivery, and one or the other may have to change its royalty offerings in order to attract more premium content.

That's all a ways down the line, of course -- first, Apple needs to announce the tablet, and then we have to see what happens in terms of releasing content for it. But there's no question Amazon and other companies are watching Apple's plans in the App Store, and it'll be interesting to see what comes next.

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Most of the rumors coming out about next week's event say that there'll be a tablet with a lot of similarities to the popular Amazon Kindle...
 

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Galley

Pop-up ads when you rank a comment? Really, TUAW?

January 21 2010 at 9:30 AM Report abuse rate up rate down Reply
Benoit Cerrina

Nobody made the comment I was expected and it wasn't mentioned in the article.

For me the important part is one of the conditions Amazon put on using this royalty split (which seems to be more interesting than the standard option although as previously mentioned the standard split is not in the article):

This list price must be at least 20 percent below the lowest physical list price for the physical book

Today I use the kindle app on my iphone but I am really put off by the outrageous price of most ebooks. When I shopped for a few books last week, most of the ones I was interested in where a couple dollars more expensive than the paperback version.

What I understand is that there is a price for new release of around $10 which is cheaper than the hardback but the price doesn't go down when the paperback comes out. Hopefully this will change as publisher use this new pricing model

January 21 2010 at 5:27 AM Report abuse rate up rate down Reply
Tracy

What was the Kindle revenue model before?

January 21 2010 at 1:55 AM Report abuse rate up rate down Reply
2 replies to Tracy's comment
Brett

That's what I wanted to know too. I've seen several articles mentioning this new 70/30 split, but not one has mentioned what it was prior to this...

January 21 2010 at 3:22 AM Report abuse rate up rate down Reply
Tom

According to a couple of publishing websites (and I think also a post on Daring Fireball) the current split is 65/35 in favour of Amazon. If they flip it to 30/70 that's a big reversal...

January 21 2010 at 11:28 AM Report abuse rate up rate down Reply
Bungles

too bad Kindle is a second place to the Barnes and Noble Nook.

January 20 2010 at 7:16 PM Report abuse rate up rate down Reply
Manuel

Here is a crazy thought (not sure if others have thought this too)... Amazon will be a partner at the event next week. They will announce a Kindle app for the Apple iSlate/Tablet that kicks butt. Apple will do to the Amazon Kindle app the same it did for Google Maps, improve the usability to their service. With that, Apple gets *all* of the Kindle content available right away (through Amazon). They improve the usability of the Kindle app so that the iSlate/Kindle App is better than the Kindle itself. Amazon gets more sales of their electronic book, which might in turn sell more Kindles. Everybody wins.

January 20 2010 at 6:52 PM Report abuse rate up rate down Reply
MadManDraper

I enjoy the Kindle app on my iPhone, though I do wonder if Apple has an ebook function for the tablet, it may migrate to the iPhone as well.

It should be interesting to see what happens regardless.

January 20 2010 at 6:04 PM Report abuse rate up rate down Reply
Nfbother@gmail.com

I have a Kindle 2 and fully expect to be one of the projected millions to buy whatever new tablet computer Apple announces in a week. While I'm holding off on buying more books for the Kindle until then, I don't think Amazon has too much reason to worry. That's because whether they're a passing fad or not, e-readers are becoming increasingly inexpensive and people are beginning to see their merits. Add to that the fact that (1) Apple won't be entering that market (and Amazon won't be leaving it) and (2) the fact that Kindle books will work on the inevitable Apple tablet Kindle application.

January 20 2010 at 5:37 PM Report abuse rate up rate down Reply
MagicFeather

Is it me, or is this the equivalent of my shih tzu urinating on itself when a coyote runs into our backyard?

Be afraid Amazon, be very afraid.

January 20 2010 at 5:10 PM Report abuse rate up rate down Reply
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