The true cost of publishing on the Amazon Kindle

15 Feb 2011

Ever wondered why newspapers and magazines published on the Amazon Kindle rarely contain photos? I’ve downloaded several copies of The Times and The Telegraph on my Kindle, and you’re lucky if you get more than one photo in the entire newspaper. The only periodical that appears to include photos or diagrams with each article as a matter of course is the magnificent Economist.

True, the 16-level grayscale screen hardly lends itself to stunning photography, but newspapers prospered for a century or two with black-and-white photos, so it’s hardly a problem unique to the Kindle.

The answer lies buried in the terms and conditions for Kindle periodical publishers. Scroll down to the section where it reveals how the revenue for publishers is calculated and you’ll find the devil is most definitely lurking in the detail.

The amount of revenue each publisher earns for their Kindle newspaper/magazine is calculated thus:

(Price – delivery costs) x 70%

“Delivery costs?” I hear you cry. This is the wonderful world of electronic publishing: Amazon hasn’t got an army of paperboys popping the newspapers through letterboxes each morning.

It does, however, pay for “free” 3G connections in the souped-up version of the Kindle, and someone has to pay for that data. And that someone is largely (70%) the publishers, particularly those who want to include anything other than plain text in their periodicals.

Amazon charges 10p per MB for delivery of newspapers and magazines in the UK. By Amazon’s own estimates, a “typical newspaper” with 100 articles and 15 to 20 images would have a file size of between 0.5MB and 1MB – or around 10% of the overall revenue, considering most newspapers sell for 99p per day. It would be an even greater share of the publisher’s profits if users signed up for a cheaper subscription.

For a magazine like PC Pro those costs would be significantly greater. Each issue of the magazine has somewhere around 75 new reviews – each with a picture – plus dozens more articles and features. An issue of PC Pro with around 150 separate articles, and 100 photos would likely incur delivery costs of 50p-60p an issue. We can pop a magazine in the post to subscribers for significantly less than that.

What’s more, Amazon says that “delivery costs apply if we deliver content via a paid distribution method, such as over Whispernet” – which could technically include downloads made over Wi-Fi, which come at a tiny fraction of the cost of 3G distribution. We've asked Amazon to confirm if Wi-Fi downloads are charged or not, but the company hadn't got back to us at the time of publication. (Update: Amazon has got in touch and confirmed that only newspapers/magazines delivered via 3G are liable for the delivery charge.)

Setting the price

Of course, people (with some justification) expect electronic publications to be cheaper than physical magazines/newspapers. But even if publishers were prepared to take a hit on the Amazon delivery costs, they have absolutely no control over how much their newspapers or magazines cost in the Kindle Store.

“Amazon.com determines the Kindle edition price,” Amazon’s T&Cs state. “Publishers will receive an email notification with the pricing details prior to launch of the publication.”

So if Amazon decides to publish PC Pro at the bargain price of £1.99 per issue, not only are we taking the hit on the delivery costs, but we’re severely under-cutting our print magazine too. (Update: And as Dennis Publishing's chief technology officer reminds me, VAT is charged on electronic magazines, but not on paper.)

Conversely, if Amazon decides to push for maximum profit – The Economist costs £9.99 per month on The Kindle store, almost £20 more expensive over the course of 12 months than a print subscription that also gives access to the digital editions (excluding Kindle) – the publisher gets in the neck from angry customers. Check out the number of people complaining about the price of The Economist on the Amazon reviews, which average at only two stars out of five.

No wonder most newspapers and magazines have decided to play it safe with minimal images, or avoid publishing on The Kindle at all.

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