By Stephen Windwalker, Editor of Kindle Nation Daily – Originally posted 6.26.2010
Time for a quick price check into the total overall catalog and the composition of the 100 top paid bestsellers list in the Kindle Store, a few days ahead of major structural changes in pricing and royalties for the Kindle’s Digital Text Platform (DTP). Here is what Amazon has announced will happen on the DTP on Wednesday, June 30:
For each eligible Kindle book sold, authors and publishers who choose the new 70 percent royalty option will receive 70 percent of list price, net of delivery costs, beginning June 30, 2010. Delivery costs will be based on file size and pricing will be $0.15/MB. In order to qualify for the 70 percent royalty option, the author or publisher-supplied list price must be between $2.99 and $9.99, must be at least 20 percent below the lowest physical list price for the physical book, and the title must be made available for sale in all geographies for which the author or publisher has rights, must be included in a broad set of features in the Kindle Store, such as text-to-speech, and must be offered at or below price parity with competition, including physical book prices. At launch, the 70 percent royalty option will only be available for books sold in the United States.
Under this new royalty structure, no DTP author with an understanding of the rules and of simple price-demand elasticity would ever price a book between $10 and $25, and few authors with any confidence in their product would ever price a book below $2.99. (This royalty structure does not yet apply to larger corporate publishers under the agency model, but they may create pricing trends that could affect all publishers, and Amazon has shown an interest in publisher parity and may try to move gradually in the future to bring larger publisher contracts into conformity with this structure.)
Here’s how royalties would play out at various price points, assuming a net delivery cost of 6 cents per unit:
Retail Royalty Net Royalty
Price Pct. Delivery
Cost
$0.99 35.00% $0.00 $0.35
$1.99 35.00% $0.00 $0.70
$2.99 70.00% $0.06 $2.03
$3.99 70.00% $0.06 $2.73
$4.99 70.00% $0.06 $3.43
$5.99 70.00% $0.06 $4.13
$6.99 70.00% $0.06 $4.83
$7.99 70.00% $0.06 $5.53
$8.99 70.00% $0.06 $6.23
$9.99 70.00% $0.06 $6.93
$10.99 35.00% $0.00 $3.85
$11.99 35.00% $0.00 $4.20
$12.99 35.00% $0.00 $4.55
$13.99 35.00% $0.00 $4.90
$14.99 35.00% $0.00 $5.25
$19.99 35.00% $0.00 $7.00
$24.99 35.00% $0.00 $8.75
$29.99 35.00% $0.00 $10.50
Although one might expect that the price array of the Kindle Store catalog would already be beginning to conform itself to these $2.99 to $9.99 parameters, such migration has been gradual and mixed:
- The overall percentage of titles in this $2.99 to $9.99 price range has increased from 56.96% on May 22 to 57.22% on June 14 to 57.32% on June 26.
- All of this migration has come from a relative decline in ebook titles priced at $10 and up, from 19.16% on May 22 to 18.82% on June 14 to 18.52% on June 26.
- Any expected decline in the percentage of titles priced at under $2.99 has yet to occur, as that subset has grown from 23.88% on May 22 to 23.96% on June 14 to 24.16% on June 26.
As for the composition of the 100 top paid bestsellers list in the Kindle Store, the trends noted in our last price check post seem to be extending and strengthening:
- Titles priced between 79 cents and $2.98 continue to show strong representation among the bestsellers, stead at 13 since June 14, and up from 6 on May 22. Now that the top “free” titles have been separated from the the 100 top paid bestsellers list, these titles between 79 cents and $2.98 stand out much as free books stood out in the past, with the added virtue of actually earning royalties for their publishers and/or authors.
- The number of top 100 bestsellers priced between $2.99 and $9.99, which had slipped from 71 on May 22 to 57 on June 14, increased slightly to 61 on June 26.
- There were continued indications that Kindle readers will pay up to $12.99 for new full-length books by established bestselling authors, as the category of bestsellers priced between $10 and $12.99 held relatively steady at 24 titles, 10 of which made the top 25 list. The composition of that group is telling: Evanovich at 4, DeMille at 10, Beck at 12, Stockett 13, Sandford 15, Harris 19, Giffin, 20, Turow 21, Deaver 23, and Patterson 25.
- Kindle readers are increasingly rejecting agency model new releases priced between $13 and $14.99, and those titles slipped from 5 on May 22 to 4 on June 14 and only 2 on June 26 (none in the top 45, with Picoult at #46 and Coben at #79).
Here’s a price breakdown of the 623,077 book titles in the Kindle Store as of 7 a.m. EDT on June 26, 2010:
- 20,636 Kindle Books Priced “Free” (3.31%)
- 5,217 Titles Priced from a Penny to 98 Cents (0.84%)
- 60,370 Kindle Books Priced at 99 Cents (9.69%)
- 83,249 Kindle Books Priced from $1 to $2.99 (13.36%)
- 119,484 Kindle Books Priced from $3 to $4.99 (19.18%)
- 157,562 Titles Priced from $5 to $9.98 (25.29%)
- 61,153 Titles Priced at $9.99 (9.81%)
- 8,132 Titles Priced from $10 to $12.99 (1.31%)
- 14,177 Titles Priced from $13 to $14.99 (2.28%)
- 93,097 Titles Priced at $15 and Up (14.94%)
Here’s where we stood with the 609,975 book titles in the Kindle Store as of 5 p.m. EDT on June 14, 2010:
- 20,589 Kindle Books Priced “Free” (3.38%)
- 5,041 Titles Priced from a Penny to 98 Cents (0.83%)
- 58,624 Kindle Books Priced at 99 Cents (9.61%)
- 80,197 Kindle Books Priced from $1 to $2.99 (13.15%)
- 115,891 Kindle Books Priced from $3 to $4.99 (19.00%)
- 155,056 Titles Priced from $5 to $9.98 (25.42%)
- 59,797 Titles Priced at $9.99 (9.80%)
- 8,173 Titles Priced from $10 to $12.99 (1.34%)
- 14,105 Titles Priced from $13 to $14.99 (2.31%)
- 92,500 Titles Priced at $15 and Up (15.16%)
Here’s where we stood with the 587,104 book titles in the Kindle Store as of 5 p.m. EDT on May 22, 2010:
- 20,584 Kindle Books Priced “Free” (3.51%)
- 4,830 Titles Priced from a Penny to 98 Cents (0.82%)
- 55,901 Kindle Books Priced at 99 Cents (9.52%)
- 76,054 Kindle Books Priced from $1 to $2.99 (12.95%)
- 109,706 Kindle Books Priced from $3 to $4.99 (18.69%)
- 151,509 Titles Priced from $5 to $9.98 (25.81%)
- 56,059 Titles Priced at $9.99 (9.55%)
- 7,700 Titles Priced from $10 to $12.99 (1.31%)
- 13,803 Titles Priced from $13 to $14.99 (2.35%)
- 90,958 Titles Priced at $15 and Up (15.49%)
Here’s where we stood with the 511,759 book titles in the Kindle Store as of 9 a.m. EDT on May 7, 2010:
- 20,601 Kindle Books Priced “Free” (4.03%)
- 4,857 Titles Priced from a Penny to 98 Cents (0.94%)
- 53,936 Kindle Books Priced at 99 Cents (10.54%)
- 73,987 Kindle Books Priced from $1 to $2.99 (14.46%)
- 101,014 Kindle Books Priced from $3 to $4.99 (19.74%)
- 91,871 Titles Priced from $5 to $9.98 (17.95%)
- 54,342 Titles Priced at $9.99 (10.62%)
- 7,434 Titles Priced from $10 to $12.99 (1.45%)
- 13,489 Titles Priced from $13 to $14.99 (2.64%)
- 90,257 Titles Priced at $15 and Up (17.64%)
Here’s where we stood with the 487,715 book titles in the Kindle Store as of 9 a.m. EDT on April 7, 2010:
- 20,620 Kindle Books Priced “Free” (4.23%)
- 4,709 Titles Priced from a Penny to 98 Cents (0.97%)
- 46,360 Kindle Books Priced at 99 Cents (9.51%)
- 69,846 Kindle Books Priced from $1 to $2.99 (14.32%)
- 94,891 Kindle Books Priced from $3 to $4.99 (19.46%)
- 86,924 Titles Priced from $5 to $9.98 (17.82%)
- 53,705 Titles Priced at $9.99 (11.01%)
- 7,537 Titles Priced from $10 to $12.99 (1.51%)
- 13,124 Titles Priced from $13 to $14.99 (2.69%)
- 90,011 Titles Priced at $15 and Up (18.46%)
Here’s where we stood with the 480,238 book titles in the Kindle Store on April 1:
- 20,620 Kindle Books Priced “Free” (4.29%)
- 4,706 Titles Priced from a Penny to 98 Cents (0.98%)
- 43,993 Kindle Books Priced at 99 Cents (9.16%)
- 68,807 Kindle Books Priced from $1 to $2.99 (14.33%)
- 93,706 Kindle Books Priced from $3 to $4.99 (19.51%)
- 85,612 Titles Priced from $5 to $9.98 (17.83%)
- 53,124 Titles Priced at $9.99 (11.06%)
- 5,952 Titles Priced from $10 to $12.99 (1.24%)
- 14,158 Titles Priced from $13 to $14.99 (2.95%)
- 89,525 Titles Priced at $15 and Up (18.64%)
Here’s where we stood with about 463,000 Kindle Store titles on March 10:
- 20,125 Kindle Books Priced “Free” (4.34%)
- 2,588 Titles Priced from a Penny to 98 Cents (0.56%)
- 39,095 Kindle Books Priced at 99 Cents (8.44%)
- 64,105 Kindle Books Priced from $1 to $2.99 (13.84%)
- 90,580 Kindle Books Priced from $3 to $4.99 (19.55%)
- 84,055 Titles Priced from $5 to $9.98 (18.15%)
- 53,697 Titles Priced at $9.99 (11.56%)
- 5,793 Titles Priced from $10 to $12.99 (1.25%)
- 13,731 Titles Priced from $13 to $14.99 (2.96%)
- 89,448 Titles Priced at $15 and Up (19.31%)
And here’s where we stood with about 447,000 Kindle Store titles on February 25:
- 19,795 Kindle Books Priced “Free” (4.42%)
- 3,023 Titles Priced from a Penny to 98 Cents (0.67%)
- 36,370 Kindle Books Priced at 99 Cents (8.12%)
- 62,275 Kindle Books Priced from $1 to $2.99 (13.9%)
- 87,722 Kindle Books Priced from $3 to $4.99 (19.58%)
- 81,230 Titles Priced from $5 to $9.98 (18.13%)
- 55,269 Titles Priced at $9.99 (12.34%)
- 5,139 Titles Priced from $10 to $12.99 (1.15%)
- 9,331 Titles Priced from $13 to $14.99 (2.08%)
- 87,771 Titles Priced at $15 and Up (19.59%)
Click here to see underlying statistical analysis (Based on U.S. Kindle Store book catalog as of 7 a.m. ET 6.26.2010)
