Relay Advisors

Amazon's New Deal to Alter Publishing Industry


  • Amazon will pay authors and publishers a royalty of 70% of the list price of Kindle books, shaking up author’s traditional cut of 10%.
  • The new model will encourage authors to go directly to Amazon, effectively bringing the company into publishing.

  • Rules for the deal dictate the price range, geographical distribution and the competitiveness of the price.

  • The deal will have authors pressure their publishers to drop retail prices significantly lower than physical book prices.

Takeaway: Amazon uses strategic pricing to optimize its assets and to tighten its grip over the e-book market, and disrupt the publishing industry again.

Henry Blodgett at

Relay Advisors is a corporate finance firm specialized in strategic asset optimization and divestiture.

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