Amazon bumps up Kindle Store royalties

Many believe Amazon is making a pre-emptive strike against Apple's e-book plans

Amazon is increasing its e-reader royalty payments by as much as twice the old rates, ahead of the looming release of what many in the industry believe to be a major tablet and book retail release from Apple.

The retail giant revealed on Wednesday that it will increase the sales percentage it pays to authors and publishers to 70 per cent of the list price. The new deal will begin in the US on 30 June, and will be limited to certain titles priced between $2.99 and $9.99 (£1.85 and £6.20).

The new percentage will apply only to titles priced at 20 per cent less than their ink and paper versions, and the e-book must be offered at an equal or lower price than competing services. Amazon also plans to deduct a small portion of the royalties to cover the cost of transmitting the book data.

The company said that the new deal is intended to better compensate authors for sales on the Kindle Store, and encourage more publishers to join the service.

"Today, authors often receive royalties in the range of seven to 15 per cent of the list price that publishers set for their physical books, or 25 per cent of the net that publishers receive from retailers for their digital books," said Russ Grandinetti, Amazon's vice president of Kindle content.

"We are excited that the new 70 per cent royalty option for the Kindle Digital Text Platform will help us pay authors higher royalties when readers choose their books."

However, the timing and structure of the new plan has led many observers to conclude that Amazon is responding to rumbles of upcoming e-book news from Apple.

The Mac and iPhone maker is widely believed to readying a tablet device, and multiple reports suggest that the company is in talks with publishers about distribution deals.

Apple pays out a flat 70 per cent rate on all third-party content it sells over the iTunes and App Store services.