Amazon.com 2011 Annual Report Download - page 4

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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.
Kindle Direct Publishing is good for readers because they get lower prices, but perhaps just as important,
readers also get access to more diversity since authors that might have been rejected by establishment publishing
channels now get their chance in the marketplace. You can get a pretty good window into this. Take a look at the
Kindle best-seller list, and compare it to the New York Times best-seller list – which is more diverse? The
Kindle list is chock-full of books from small presses and self-published authors, while the New York Times list
is dominated by successful and established authors.
Amazonians are leaning into the future, with radical and transformational innovations that create value for
thousands of authors, entrepreneurs, and developers. Invention has become second nature at Amazon, and in my
view the team’s pace of innovation is even accelerating – I can assure you it’s very energizing. I’m extremely
proud of the whole team, and feel lucky to have a front row seat.
As always, I attach a copy of our original 1997 letter. Our approach remains the same, and it’s still Day 1!
Jeffrey P. Bezos
Founder and Chief Executive Officer
Amazon.com, Inc.