Watch this 2.5 minute video on YouTube.com - but don’t make assumptions until you’ve seen the whole thing.

I admit it – I didn’t see that coming.

From The Associated Press today:

Amazon offers new royalty program for Kindle books SEATTLE (AP) _ Amazon.com Inc. said Wednesday it will begin offering do-it-yourself authors and publishers a bigger cut of book sales on its Kindle e-reader _ but with strings attached aimed at keeping prices down for consumers. The company said that starting in June, it will offer users of its e-book self-publishing program, the Kindle Digital Text Platform, royalties on book sales of 70 percent after delivery costs. With those costs equaling less than 6 cents per book, Amazon said authors will be able to earn $6.25 per copy on a book that sells for $8.99, rather than the old rate of $3.15.

Check out this vid of Wired Editor Chris Anderson talking about his book released this past Summer, titled Free, where he discusses the concept of how to make money giving away content.

Thanks to commenter Mindi for bringing this to my attention. Cool.

The debate surrounding free content has become so heated it melts the keyboards of most Bloggers, Musicians, Visual Artists and other Creators. But does it work for Authors?

Anyone who’s published a book knows that you’re expected to give away a few things for free, including sample chapters, and of course review and publicity copies of your book. Most Authors have done free lectures in exchange for a table at the back of the room from which to sell their stuff.

But what if you gave away the entire book? All the time? To everybody?

Bloggers have been particularly frustrated by the issue of what to give away, and what to sell, at any of the conventions and gatherings I’ve been to in 2009. Most of them have written the equivalent of several books and not gained a penny from their efforts. Bloggers are getting a bit angry about this, because we’ve all seen so many promises of things like huge waves of blogging ad revenue that simply haven’t come true. In addition, people have become quite jaded by a proliferation of quality free content, and don’t seem willing to pay for information that helps them, entertains them, or even makes them money in turn.

But there are people making decent money – in fact, some making fantastic money – giving away content. How are they doing it?

According to Blogger and Podcaster Magazine, there are a few basic ways that people profit from free online content, including (for the most part) advertising, merchandise, and using the content to sell something more valuable: their consulting expertise. Like you, I was worried that this meant that if Authors wanted to learn from other industries and try giving away their books while making money in some other fashion, we might need to place completely unrelated and distracting ads alongside our books, which are now published as websites. This might work for some, but definitely not for all Authors and their creative works.

Seth Godin argues that  “…The book is a souvenir.” In the previous link, he discusses several cases where Authors – including himself, of course – who have released their books for free on the internet, are still selling paper or downloadable copies. Why? Because what people pay for is the instrument of delivery. Special leather-bound editions might only sell 250 copies, but they could sell for upwards of $250 per copy. CD’s containing eBooks, along with perhaps some bonus material, are still capable of significant digital cachet. Here’s an Author’s opportunity to partner with a graphic artist and create something elegant, beautiful, and distinctive – something irresistable.

Even 37Signals, the company who created the online project management system called Basecamp (that last one is an affiliate link), offered their ebook Getting Real for free if you read it off their website. They sell a downloadable version for $19, and a paper copy for $25. Despite offering it for free, they’ve sold over 30,000 copies of the downloadable version alone.

Examine this additional model from filmmaker Nina Paley, who created the film Sita Sings the Blues, based on the Ramayana of Valmiki. (Well, why the hell not?) Her very public accounting (see the link under her name) of the ways and how much money she’s made by not selling her film tells us something very important: this model does work, but you have to take a wholistic approach. Just one of those revenue streams is not enough – you need to present a well-rounded series of offerings.

As Paley says on her website, “There is the question of how I’ll get money from all this. My personal experience confirms audiences are generous and want to support artists. Surely there’s a way for this to happen without centrally controlling every transaction. The old business model of coercion and extortion is failing. New models are emerging, and I’m happy to be part of that. But we’re still making this up as we go along. You are free to make money with the free content of Sita Sings the Blues, and you are free to share money with me. People have been making money in Free Software for years; it’s time for Free Culture to follow. I look forward to your innovations.” (Links in previous paragraph are from Paley’s original website. I encourage you to give her money.)

Even with all the heat, I think I’m up for the challenge. Even if it melts this keyboard.

You would think that as an advocate of recycling and green practices in my own business, I’d be keen on eBooks instead of paper books. For several very good reasons, that is not always the case.

It’s not that eBooks don’t have their place – they absolutely do. I’ve written a few myself. But they don’t perform the same tasks or meet the same objectives as an old-fashioned, paper book.

The biggest reason for this is that the first thing many people do when they download an eBook is to print it. Not all of us are nerdy types (again, like myself) that carry a laptop everywhere they go, and frequently read from that. The world has not yet adopted the common daily use of handheld digital reading devices, although we’re getting pretty close. For example, Amazon’s Kindle reader is extremely cool, but not affordable for many, and until recently, it wasn’t even in stock. (They’ve had such a bad time combating market backlash over the lack of stock, that they’ve had to spend their marketing dollars all over again – like paying Martha to push it.)

The second big reason that eBooks are taking their time to take off relates to marketing. An eBook is a much tougher sell than a paper book in many markets. If your market is not already used to the concept, you need to sell them twice: first on the idea of your book’s content, and secondly on the idea of the eBook. Romance novels seem to have made an unexpected leap forward in this area, thanks to eTailers like FictionWise.com, who offer eBooks in multiple formats. Their site is very easy to understand and use, and the price for an eBook is much less than a hardback. They give the reader plenty of reasons to want to adapt.

Even when eBooks do take off, it’s extremely difficult to quantify what is being saved, if anything. With modern paper books, there are a wide variety of green options available to the publisher with a conscience. Paper books have a piracy rate of virtually nil, but security for eBooks is constantly improving and bringing this close to par.

The real barrier is psychology: people want a book in their hand. I’ve been a lover of books my entire life. I want to feel the texture of the cover, be it smooth and glossy or cloth and leather. I love the way they weigh down my hand or rest in my lap. I anticipate the sound of thick pages flipping, the way my antique bookmark sits against the spine stitching, and yes, even the way the paper smells. I make notes in the margins with my fountain pen, and I display my hardcover collection carefully on shelves around my house.

All of that being said, I was certainly grateful recently when I was stuck on a plane, and remembered that I had a copy of Jane Eyre on my cell phone. Oh well – at least the romance isn’t totally dead.