Amazon Offers 70/30 Revenue Split to Magazine, Newspaper Publishers

Amazon Offers 70/30 Revenue Split to Magazine, Newspaper Publishers

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Amazon has adopted a 70-30 revenue split for newspaper and magazine publishers, bringing it in line with Apple’s App Store policy and prompting some to predict the emergence of another iTunes store, this time for newspapers. The Seattle-based online retail giant made the announcement Monday, proclaiming the new arrangement “a great new tool for making Kindle better and easier than ever for publishers.”

The announcement comes as Amazon prepares to offer newspapers and magazines on Kindle Apps, but could also be used as leverage by Apple to convince publishers reluctant to offer items on both platforms. A report last month by the Wall Street Journal suggested the Cupertino Calif. company could reach an agreement with publishers in time for the widely-expected launch of an iPad 2 in early 2011.

Although the 70-30 revenue share is not new for Amazon (it was adopted earlier this year for book publishers), the new agreement offered to newspaper and magazine publishers is less tightly worded.

Publishers have balked at Apple’s plans in the past, concerned while a 70-30 split might work for book publishers hawking a $20 item, an agreement would cede to Apple a third of newspapers’ and magazines’ most valuable tools: subscriptions. In August, Time Inc. reportedly broke the logjam, offering free access to a People iPad app for subscribers.

[AppleInsider, Marketwatch]

About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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