Peter Kafka

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Amazon Pushes Royalty Rates Up–And Prices Down–For Do-It-Yourself E-Book Publishers

low priceAmazon is doubling the royalty rate it pays small e-book authors and publishers–if they promise to keep the prices of their digital texts below the price of physical books.

Starting this summer, the e-commerce giant will offer a 70 percent royalty rate for books published on its self-serve Digital Text Platform, up from the 35 percent of the list price it currently offers. The offer comes with a series of strings attached, but all are aimed at the same goal: Selling titles at the lowest possible price.

This won’t be relevant for most of the mass-market titles, whose publishers negotiate individually with Amazon (AMZN). But it will be relevant for Kindle owners, who tend to be price-sensitive types who flock to low-cost and no-cost titles.

Amazon has two goals here. The company wants to push e-book prices down, which should help it sell more e-books and more Kindles. And it wants to keep business away from a growing list of rivals, which include Sony (SNE), Barnes & Noble (BKS), and, very soon, Apple (AAPL), which will be supporting e-books on its new tablet device.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik