From an interview with Jim Moroney, publisher of The Dallas Morning News, with Brooke Gladstone at On the Media:
BROOKE GLADSTONE: Now, you testified about your negotiations with Amazon regarding the Kindle electronic reader. Could you tell us about that?
JIM MORONEY: Somebody was bringing up the Kindle as the solution we should all be focused on. And I love the Kindle. I read books on it all the time. My problem is that after negotiating and negotiating and negotiating, the very best deal we could get from Amazon was to split revenues for whatever price we decided to charge. We could get 30 percent of that money. They get 70 percent.
BROOKE GLADSTONE: Wow.
JIM MORONEY: I could have probably lived with that, but there was another clause in there that they would not give me relief on, and that said that they have the right to relicense my content to any portable device, not just an Amazon-owned device, any portable device. In essence, I was giving them a complete licensing agreement for nothing for all of my content, period.
I’m sort of – that’s – give away my future, you know.
If Amazon came back – I thought maybe they’d call today – and said, do you know what, we’ll give up on that little clause about the relicensing of your IP, I would have said, okay, you know what – I’ll try this thing at 70/30 and see if it works. But nobody called today, as far as I can tell.
Compare that to Apple, who keeps about 35% to 40% of the price of the 99-cent purchase price for a song sold on iTunes. Of course, Apple’s main business model is selling iPods while Amazon’s main business model is selling content, but even so I’m surprised Amazon is demanding such a high percentage for what still amounts to an untested market. Maybe they figure (probably correctly) that newspapers are desperate enough to go for it?