Amazon offers 70-30 revenue share to magazine and newspaper publishers

Online retail giant Amazon announced Monday that it will begin offering magazine and newspaper publishers the same 70-30 revenue split as Apple's App Store for periodicals sold through the Kindle Store, possibly opening up an opportunity for Apple to open its own digital newspaper store.
The new 70-30 split, a model popularized by Apple's App Store, will go into effect on Dec. 1 for publishers who meet certain requirements, such as making titles available on all Kindle devices and applications and offering titles in all geographies for which the publisher has rights.

"Building on the recent introduction of Wi-Fi-enabled Kindles and the upcoming availability of newspapers and magazines on Kindle Apps, we're pleased to add an increased revenue share and a great new tool for making Kindle better and easier than ever for publishers," said Amazon Director of Kindle Periodicals Peter Larsen.

After Monday's announcement, pundits speculated that the changes could reflect new contracts between Amazon and the publishers, which could bode well for Apple and its iPad. In May, Gawker Media's Valleywag blog reported that newspaper and book publishers were "grappling" with Kindle licensing issues that prevented them from selling "a cheaper, comparable e-edition on a competing tablet."

A Silicon Alley Insider report suggested that Amazon's move to the same revenue sharing model as Apple could allow publishers to offer their content on both an Amazon and an Apple digital store at the same price, thereby avoiding the licensing issues that have reportedly blocked publishers. The report goes on to speculate that an iTunes newspaper store could come as soon as early next year, "whenever [Apple] announces a new iPad and/or iOS 5."
Pre-existing Amazon contracts haven't been the only obstacles for publishers trying to bring their periodicals to the iPad. In the past, Apple and the publishers have disagreed over subscription plans for the iPad, with publishers initially lacking a way to offer the iPad version of their magazines free to subscribers. Time Inc. finally broke the impasse in August, offering subscribers free access to the People iPad app.

Earlier this year, Amazon adopted a 70-30 revenue split for some of the books sold through its Kindle Store, although the requirements for qualifying books were more strenuous than Monday's requirements for qualifying newspapers and periodicals.


Information retrieved from: http://www.appleinsider.com/articles/10/11/09/amazon_offers_70_30_revenue_share_to_magazine_and_newspaper_publishers.html


(C) 2010 Josh Ong.


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