Amazon is not playing around with its revenue streams when it comes to offering content on the Kindle. They want a 70% cut of the subscription revenue and the rights to offer the content on more platforms than just the Kindle.
In a senate committee meeting where options are being discussed on how to save the failing newspapers industry a questions was asked if moving to a Kindle type platform could save the industry. Dallas Morning News Publisher and CEO James Moroney responded by saying:
"The Kindle, which I think is a marvelous device, the best deal Amazon will give the Dallas Morning News—and we've negotiated this up to the last two weeks—they want 70 percent of the subscriptions revenue. I get 30 percent, they get 70 percent. On top of that they have said we get the right to republish your intellectual property to any portable device".
Amazon is playing hardball and demanding a serious percentage for content that it did not create. The Kindle is merely a publishing platform like the Apple App Store, Steam, and many others but this type of model is unheard of.
It remains to be seen if the Kindle can survive considering its low penetration rate and high margin cost skimming model.
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