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

Amazon 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.