Could the Kindle Textbook Creator Cause Amazon to Revisit KDP Royalties?

2226696853_f39a41811e_m[1]When Amazon released the Kindle Textbook Creator earlier this week indie authors and publishers were thrilled and disappointed in equal measure, and more than a few had their hopes raised.

Indies were thrilled to get a tool which would enable them to make the PDF-ish Kindle Print Replica format which Amazon had been selling since August 2011 (but only from larger publishers) but also disappointed that the tool did little more than convert a PDF into a file which could be uploaded to KDP (it cannot be used elsewhere). As a conversion (but not creation) tool it's not all that much more useful than simply sideloading a PDF.

Well, except for the fact that indies can sell one of these PDF-ish textbooks in the Kindle Store. That's a plus, and it also brings me to the raised hopes.

Some are speculating that this tool could cause Amazon revisit the KDP royalty schedule. As Laura Hazard Owen put it over on GigaOm:

One thing I’m wondering about here is the revenue split. Right now, Amazon KDP gives authors 70 percent of each sale of ebooks priced between $2.99 and $9.99. For books priced higher or lower than that, the author just gets a 35 percent cut — and that’s been the subject of debate recently. It seems as if this revenue structure could especially create problems for textbook authors of textbooks, which often cost more than $9.99; plus, Apple gives authors a 70 percent split on all books sold through iBooks, no matter what they cost.

I don't see this tool as having any great impact on Amazon's decision-making process, for a number of reasons.

For one thing, while everyone has made the connection between Kindle Textbook Creator and iBooks Author, they forgot to take that allusion one step further and consider just what the standard prices for textbooks made with iBooks Author.

According to Apple, it's $9.99 and $14.99. That's good news for Amazon; they want you to sell a textbook for $9.99.

Sure, there are more expensive books in iBooks, but there are also expensive textbooks and nonfiction works in the Kindle Store. Amazon has been selling textbooks since the Kindle launched, and that includes indie titles as well (they were drawn from Mobipocket's platform).

Amazon has been paying indies the 35% royalty on expensive textbooks and other nonfiction titles since the Kindle launched, and some have been grousing about it ever since shortly after Amazon announced the 70% royalty option and excluded titles which cost more than $9.99.

But indies continue to upload the expensively priced titles to the Kindle Store (or not), so I would suggest that believing this one tool - which is only good for certain types of nonfiction works - would cause Amazon to reconsider their pricing policies imbues the tool with a greater impact than it deserves.

And that goes double when we consider the fact that there's nothing stopping an indie from uploading a single textbook in several volumes rather than a single expensive text. For example, I know of a teacher who has written his own textbooks as collections of single page PDFs, and and if you take a similar albeit less extreme approach then you could easily split a single textbook and sell a number of smaller volumes which fit under the 70% royalty cap.

So no, I don't think this tool will have any effect on Amazon's pricing policies. (I would also like to question the acceptance of high prices for digital textbooks which can neither be returned or refunded, but that's an argument for another day.)

9775986472_b524753c65[1]

As I sit here proofreading this post, I feel that I should add that I think Amazon will reconsider the $9.99 cap on the 70% royalty, just not because of the new tool.

I think the rise of iBooks might influence Amazon, though. Unlike Amazon (or B&N), iBooks pays a 70% commission regardless of price. And with iBooks having replaced the Nook Store as the second-largest ebook retailer (globally, of course), it's a growing threat to Amazon.

But that is just my gut feeling for the situation; Amazon might have a different take.

What do you think?

images by pmccormiLuis Vidal (Lois)

About Nate Hoffelder (11579 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

5 Comments on Could the Kindle Textbook Creator Cause Amazon to Revisit KDP Royalties?

  1. Amazon is already on record (from last week) as saying they are willing to consider higher prices for non-fiction, implying that the rates will be changing. At least a bit. Maybe 70% up to $20.

  2. Just to add something… If authors opt to go with the 70% royalty structure, they are responsible for the “delivery cost” of the digital files based on the file size. Most PDF eBooks are in the 20-50MB range. Calculate the delivery charge at $0.15 per MB in the USA and Canada and an author’s profit margin gets reduced to nearly nothing (being bound to the $9.99 price limit). Tricky pricing model if you don’t read carefully!

  3. It really doesn’t matter what they say they are going to give you percentage wise because they have a “delivery cost” built into their 70% option. This means the bigger the file you upload the higher the delivery cost. My ebook was going to list for $6.99 and the delivery cost was $22. When I emailed them about this, they pointed out that I could switch to the 35% option with no delivery cost. Sounded like the old bait and switch routine. I’m going elsewhere with my ebook.

    • And do you know what is even more ridiculous?

      The ebooks made with KTC can’t be read on the Kindle itself, so any delivery will be over Wifi. This means there is no actual cost to Amazon.

  4. I think what the author also completely forgot to mention as an unfair restriction by Kindle, is that an ebook made with Kindle Text Book Creator — which means creating a jpeg image for every pdf page — will certainly be impacted by Kindle’s $0.15 tariff per magabyte above their 5 Mb limit.

    So, in other words, if you use KTBC to create your ebook, then this means you will be forced to accept either the lower 35% royalty(no upload limit) or the taxable 70% royalty(5 Mb limit). After all, either way you choose it, Amazon will make more money off your KTBC ebook than any relflowable equivalent.

    So I just see this KTBC Fixed Layout ploy or business tactic by Amazon as simply an unhelpful extra for the indie author. It’s just another way for Kindle to squeeze yet more profit from the struggling indie author sales.

Leave a comment

Your email address will not be published.


*