Well, hi, kids!
Hope everyone had a groovy weekend. I was thinking about that link I posted last week in which author Graham Swift noted that authors are in danger of getting screwed with regard to ebook royalties.
It’s an article titled “Do Publishers Pay a Fair Royalty Rate for ebooks under the Agency Model?”
Here’s what I found kind of interesting:
But despite these costs which publishers incur [read the piece to see what those are; it’s short]…they’re saving buckets full of money on not having to print or ship books – savings which range from the production department to the warehouse – and the authors simply are not being credited for those savings.
And while the price of ebooks generally is lower than hardcover, the publisher’s contribution on every sale of an ebook has remained equivalent to that of a hardcover, whereas the author’s share has dropped by about 1/3.
So I then followed the suggested link to THIS blog, with an article titled “How Ebook Royalties are Cheating Authors.” The blog includes figures, which look pretty crappy for authors.
E-book royalty rates for major trade publishers have coalesced, for the moment, at 25% of the publisher’s receipts. As we’ve pointed out previously, this is contrary to longstanding tradition in trade book publishing, in which authors and publishers effectively split the net proceeds of book sales (that’s how the industry arrived at the standard hardcover royalty rate of 15% of list price). Among the ills of this radical pay cut is the distorting effect it has on publishers’ incentives: publishers generally do significantly better on e-book sales than they do on hardcover sales. Authors, on the other hand, always do worse.
So, everything else being equal, publishers will naturally have a strong bias toward e-book sales. It certainly does wonders for cash flow: not only does the publisher net more, but the reduced royalty means that every time an e-book purchase displaces a hardcover purchase, the odds that the author’s advance will earn out — and the publisher will have to cut a check for royalties — diminishes. In more ways than one, the author’s e-loss is the publisher’s e-gain.
source: Ask the Agent (emphasis mine)
Go to the link for the specific examples that’ll show you just how bad authors do on ebooks.
Anyway, I’m not going on a rampage against ebooks. I’m an author, after all, and I like that my stuff is available in multiple formats. However, I am concerned about ebook royalties, and about the invalidation of an electronic format as “work,” thus allowing publishers to contract a lower royalty rate. Or just because they like the greater profit they make from ebooks, and sadly that doesn’t seem to be trickling down. Just some stuff to think about.