Filed under: Hardware, Software, iTunes, App Store
Amazon Kindle moves to App Store's 70/30 revenue split
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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Reader Comments (Page 1 of 1)
MagicFeather said 5:11PM on 1-20-2010
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.
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Jordan said 5:35PM on 1-20-2010
It's just you
Kindle is already a well established name in the e-book market, plus it's backed by the Amazon name. IF Apple is to release a device that functions as an e-book reader, it will no doubt take some market share, but I don't see it dominating in ebooks like it did with iPod and iPhone. A Kindle reads e-books, but Apple will no doubt be releasing something much more complex, and Kindle succeeds through its basic simplicity.
Grandpa and Grandma will no doubt still turn to Kindle, and honestly, younger people these days don't read the amount of books that older people do.
Now is this move by Amazon and the timing that comes with it precautionary? Yes, I would certainly say it is, but I would also certainly say it's extremely smart.
Nfbother@gmail.com said 5:40PM on 1-20-2010
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.
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MadManDraper said 6:04PM on 1-20-2010
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.
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Joanna D said 6:47PM on 1-20-2010
Why does everyone always ignore the fact that Microsoft had an 'app store' with XNA (offering 70% of the revenue to developers) a long time before Apple came along?
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Jordan said 9:07PM on 1-20-2010
Because Apple created the world and everything in it, duh
Manuel said 6:53PM on 1-20-2010
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.
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Bungles said 7:49PM on 1-20-2010
too bad Kindle is a second place to the Barnes and Noble Nook.
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Tracy said 1:55AM on 1-21-2010
What was the Kindle revenue model before?
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Brett said 3:22AM on 1-21-2010
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...
Tom said 11:29AM on 1-21-2010
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...
Benoit Cerrina said 12:48PM on 1-21-2010
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
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Galley said 9:30AM on 1-21-2010
Pop-up ads when you rank a comment? Really, TUAW?
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