Amazon ups the stakes in E-reader war, doubles royalties on cheaper e-books

This month, Amazon, Barnes and Noble, and Borders have been engaged in some serious e-reader competition. Following the introduction of Borders' bargain-priced Kobo e-paper reader, both Barnes and Noble and Amazon cut the prices of their Nook and Kindle products to put all three products on a level playing field. All three book retailers have been pushing their cross-platform software readers too, jockeying for superiority in the e-book trade.

But retail price wars and marketing blitzes are only one side of the business. Today, Amazon made a significant appeal to another side: independent content publishers.

Amazon has announced a 70% royalty option to e-book publishers who release books on Amazon's Digital Text Platform (DTP,) Amazon's do-it-yourself publishing service.

Typically, publishers who release a book through Amazon's DTP are paid a 35% royalty for every unit sold. Publishers determine the list price of a title, but amazon sets the actual retail price. In the DTP program, digital books with a file size greater than 3 megabytes and up to 10 megabytes must have a list price of at least $1.99, and digital books with a file size of 10 megabytes or greater must have a list price of at least $2.99.

Now, to encourage publishers, authors, and rights holders to release e-books that are cheaper to consumers, Amazon is offering double royalties when titles published through DTP are at least 20% cheaper than their paper counterparts.

Additionally, Amazon says the titles must be listed between $2.99 and $9.99 and have the controversial text-to-speech function enabled.

"We're excited about the launch of the 70 percent royalty option and user experience enhancements in DTP because they enable authors and publishers to conveniently offer more content to Kindle customers and to make more money from the books they sell," said Russ Grandinetti, Vice President of Kindle Content in a statement this morning.