Amazon.com Offers More Money for News on Kindle
Nov 9th 2010 3:30AM
Updated Nov 9th 2010 3:44AM
Amazon.com (AMZN) said Monday it will start paying publishers more when they sell magazines and newspapers on its Kindle electronic reader.
Amazon.com will pay publishers 70% of the retail price, after subtracting delivery costs, for each magazine or newspaper sold at its Kindle Store.
That's a reversal of the terms that News Corp. (NWSA) CEO Rupert Murdoch said Amazon was paying last year for subscriptions to publications like The Wall Street Journal. Murdoch said last December that Amazon.com pays News Corp. a little more than a third of the $14.99 monthly subscription fee for the Journal, which he described as "not a great deal."
The move by Amazon, which takes effect Dec. 1, comes at a time when newspapers and magazines are increasingly looking at digital platforms like the Kindle and Apple's (AAPL) iPad to replace revenue lost to decreasing print ad revenue.
Amazon said newspapers and magazines will qualify for the new rate only if customers can read the title on all Kindle devices and applications, and in all countries where the publisher has rights.
Amazon said a newspaper that delivers about 9 megabytes of content a month would pay about $1.35 in delivery costs, meaning a $9.99-per-month subscription would net a publisher $6.05 a month per subscription.
Peter Larsen, director of Kindle Periodicals, said in a statement that the increased revenue share is "a great new tool for making Kindle better and easier than ever for publishers."
A News Corp. spokesman did not immediately have a comment.