Amazon's (AMZN) CEO Bezos: We're Killing It in e-Books (AAPL)
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Amazon (Nasdaq: AMZN) filed its annual letter to shareholders with the U.S. SEC Friday. The letter comes at an interesting time, as it highlighted the value of Kindle Direct Publishing (KDP) and a recent U.S. DoJ suit against Apple (Nasdaq: AAPL) and other publishers over possible e-Book price fixing.
In the letter, CEO Jeff Bezos pointed out several examples of folks writing in to compliment the company on how KDP has helped then to achieve better profitability, ease of publication, or the like. One writer even likened KDP as Prince Charming to his Cinderella story.
Bezos also highlighted some positives on KDP wth numbers: "Kindle Direct Publishing has quickly taken on astonishing scale – more than a thousand KDP authors now each sell more than a thousand copies a month, some have already reached hundreds of thousands of sales, and two have already joined the Kindle Million Club. KDP is a big win for authors. Authors who use KDP get to keep their copyrights, keep their derivative rights, get to publish on their schedule – a typical delay in traditional publishing can be a year or more from the time the book is finished – and … saving the best for last … KDP authors can get paid royalties of 70%. The largest traditional publishers pay royalties of only 17.5% on ebooks (they pay 25% of 70% of the selling price which works out to be 17.5% of the selling price). The KDP royalty structure is completely transformative for authors. A typical selling price for a KDP book is a reader-friendly $2.99 – authors get approximately $2 of that! With the legacy royalty of 17.5%, the selling price would have to be $11.43 to yield the same $2 per unit royalty. I assure you that authors sell many, many more copies at $2.99 than they would at $11.43."
Earlier in the session, Amazon issued a statement which read: "The DOJ’s accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore."
Amazon shares are trending higher this afternoon following earlier session lows around $186.26. The stock is now down just 1.3 percent for the session. To access Bezos' letter, click here.
In the letter, CEO Jeff Bezos pointed out several examples of folks writing in to compliment the company on how KDP has helped then to achieve better profitability, ease of publication, or the like. One writer even likened KDP as Prince Charming to his Cinderella story.
Bezos also highlighted some positives on KDP wth numbers: "Kindle Direct Publishing has quickly taken on astonishing scale – more than a thousand KDP authors now each sell more than a thousand copies a month, some have already reached hundreds of thousands of sales, and two have already joined the Kindle Million Club. KDP is a big win for authors. Authors who use KDP get to keep their copyrights, keep their derivative rights, get to publish on their schedule – a typical delay in traditional publishing can be a year or more from the time the book is finished – and … saving the best for last … KDP authors can get paid royalties of 70%. The largest traditional publishers pay royalties of only 17.5% on ebooks (they pay 25% of 70% of the selling price which works out to be 17.5% of the selling price). The KDP royalty structure is completely transformative for authors. A typical selling price for a KDP book is a reader-friendly $2.99 – authors get approximately $2 of that! With the legacy royalty of 17.5%, the selling price would have to be $11.43 to yield the same $2 per unit royalty. I assure you that authors sell many, many more copies at $2.99 than they would at $11.43."
Earlier in the session, Amazon issued a statement which read: "The DOJ’s accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore."
Amazon shares are trending higher this afternoon following earlier session lows around $186.26. The stock is now down just 1.3 percent for the session. To access Bezos' letter, click here.
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