Amazon’s Kindle, which historically hasn’t been regarded as much of a money maker for news publishers because of a lopsided revenue split, which favored Amazon (NSDQ: AMZN), is improving those terms significantly. Since the device’s debut, Amazon has provided publishers with 30 percent of the subscription revenue their publications generate after delivery costs are subtracted and has kept the remainder. Amazon now says it is reversing the figures, allowing newspaper and magazine publishers to keep 70 percent of the retail price (again, after subtracting delivery costs) of their publications, while keeping 30 percent for itself.
Amazon’s previous terms had been criticized, including in the U.S. Senate. At a hearing in spring 2009, Dallas Morning News Publisher and CEO James Moroney said that the revenue share meant that the Kindle was not a platform that would help the newspaper industry in the near-term. The new terms mean that Amazon is offering publishers the same revenue share as Apple (NSDQ: AAPL) does in its App Store, which so many publishers have embraced.
There are asterixes, of course, many of which are outlined in this FAQ here. Amazon is limiting the improved terms to newspapers and magazines that make their content available across all Kindle devices and apps. The new terms also do not apply to blog publishers, who the company says already have “generally more advantageous” terms under a program that was rolled out in May 2009.