Amazon’s Kindle is a neat idea, as are eReaders in general. But they aren’t much good if there’s nothing to 'eRead' on them. Book publishers, still stuck in last century’s economic models, are slow to come around to Jeff Bezo’s world of bits-and-bytes, leaving a gap in what is and what might be. Amazon has moved to shore-up that gap, at least for the Kindle and Amazon’s digital bookstore: it’s offering to pay authors and publishers a new royalty of 70 percent of list price--doubling the current 35 percent rate.
Well, not quite 70 percent. First, Amazon wants to deduct delivery costs. This is readily factored into the equation, as Amazon projects costs to be 15-cents per megabyte. And the book must be priced between $2.99 and $9.99 to qualify for this royalty rate. On top of this the book’s ‘ePrice’ must be at least 20 percent less than its physical copy price.
Oh, and Amazon wants distribution rights throughout the world where the publisher/author has such rights. The book can’t have been published prior to 1923. And the book must be sold in the United States.
Honestly, though, isn’t the soul of an author or publisher worth a royalty of 70 percent?
Apple has threatened to close its iTunes music store, if the Copyright Royalty Board approves a hike in the royalty rate on music sales. The board is to give its decision on Thursday. The National Music Publishers’ Association is pleading for a hike of 66% in royalty rates. On the other hand, digital store owners are demanding a cut in royalty rates.
"If the [iTunes store] was forced to absorb any increase in the ... royalty rate, the result would be to significantly increase the likelihood of the store operating at a financial loss -- which is no alternative at all,” Apple’s VP Eddy Cue warned the board in a filing.
Do you believe Apple can take such a drastic step?
The online music industry has always been a touchy one, but today the world came a step closer to ending online royalty disputes. An agreement that’s being called a “breakthrough that will facilitate new ways to offer music to consumers online,” songwriters, music publishers, record labels and digital music websites have concluded a seven year dispute over mechanical royalties and limited music downloads.
Mechanical royalties are the fees paid to songwriters, composers and publishers of music, not the person that only preformed it or the record company that produced the recording. Limited music downloads are downloads with restrictions attached, such as the model used by Napster To Go. iTunes, however isn’t considered limited use because you can listen to your songs as often as you want, without a monthly fee.
As landmark as this settlement is, it still leaves a big hole on the controversial topic of Internet radio. Sites such as Pandora and Live365 remain in a high-stakes standoff with SoundExchange, the company in charge of collecting the fees for artists and record companies. The reason that sites such as these were left out from the normal Internet radio agreement is because they allow users to select the music that they want to listen to, as opposed to simply listening to a pre-determined stream of songs.