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Author Says eBooks Will Hurt Authors Because Of Royalty Rates

From Timothy Geigner at Techdirt:

Author Says eBooks Will Hurt Authors Because Of Royalty Rates

from the but-the-percentages-say-otherwise dept

Opinions on the emergence of eBooks in the modern era come with all manner of widely varied opinions. We saw J.K. Rowling go from staunchly refusing to offer her works as eBooks to routing around her publisher and offering them directly to her fans. Barry Eisler turned down a huge publishing contract to self-publish his eBooks, even as the Mystery Writers of America were telling Joe Konrath, Eisler’s friend, self-publishing meant he wasn’t a “real author”. And, of course, we have the always prevalent opposed viewpoints of the benefits of carrying your digital library everywhere versus the preference for the look and feel of a physical hardcopy tome.

But one argument I haven’t heard before (and I spend a decent amount of time reading and learning about the publishing world, for obvious reasons) is that eBooks are dangerous to the future of young authors because the royalty rates won’t support them making a living. That’s theargument Graham Swift made in an article in The Telegraph by Nick Collins. Graham is quoted as saying:

“The e-book does seem at the moment to threaten the livelihood of writers, because the way in which writers are paid for their work in the form of e-books is very much up in the air. I think the tendency will be that writers will get even less than they get now for their work and sadly that could mean that some potential writers will see that they can’t make a living, they will give up and the world would be poorer for the books they might have written, so in that way it is quite a serious prospect.”Swift is an award-winning author and, as such, I assume he’s as or more informed about the publishing world than I am, but I’m having trouble rectifying his speculation on declining royalty rates for eBooks with how such royalties are handled now. Unfortunately, because there is some variance in how royalties are handled in the publishing world, particularly with fiction, there are some distinctions to be made with how this all works.

First, let’s quickly look at royalties offered in a standard publishing contract through a mainstream press. Hardcover royalties are typically between 10% and 15%, with some variance in the contract based on the number of units sold. Paperback royalties are typically between 6% and 9%, usually also with breaking points based on sales. Meanwhile, the standard eBook royalty rates tend to be much higher, anywhere between 25% and 50%. Now, Graham appeared to be speaking of the future decline of eBook royalty rates, but the general trend with established publishers has been for those rates to rise rather than fall, recently.

Now, as everyone is aware, the emergence of eBooks has coincided with a boom in the self-publishing industry. I’m going, for the sake of this argument, to set aside true vanity publishers with awful reputations in the publishing world. Some authors out there will tell you horror stories about operations like Publish America, but they have an equally bad reputation when it comes to both hardcopy books and eBooks. Instead, let’s deal with how royalties work for self-publish eBook operations like Lulu and the Amazon Kindle market. As someone who has published on both platforms, I’m very familiar with how royalties work with each.

With Lulu, there is some wiggle room for authors to set their own retail price and, therefore, royalty for physical books. The default settings come to something around 9% for hardcopy books. That same default setting for eBooks? Roughly 55% in royalty for the creator. Creators offering up eBooks on the Kindle Direct Publishing platform can expect their royalties to start at 35% (although there are some options that can bump that royalty to 70%, depending on how much the author wishes to sell their eBook for).

And none of that even takes into account authors who are cutting out the middlemen with eBooks entirely and offering up their works with something like a PayPal account, yielding royalties for eBooks effectively somewhere around 75%. This is a sector of authors that’s only going to grow, as we’ve discussed here before. The beauty of the eBook is that an author no longer has to worry about the single most difficult aspect of getting his or her work to the reader: the physical production of the printed book. With that barrier gone, it seems as thoughmore young writers will find themselves suddenly able to enter the market, not fewer.

So, perhaps Swift knows something I don’t, but everything I read seems to indicate that eBooks are going to result in options for higher royalties, not lower. So I have to wonder where this fear comes from?

{ 2 comments… add one }
  • J. Neil Schulman August 25, 2011, 12:49 am

    Book publishers traditionally offered a set of services to writers, as opposed to an author self-publishing and having to go out of pocket for these:
    At the manuscript stage: editorial services including line-editing, copy editing, and suggesting rewrites.
    Book design, hiring cover artists, typesetting, proofing and editorial correction of type.
    Providing advance proofs to review publications and libraries
    Publicity and advertising services
    Sales forces to travel in books and get orders from booksellers
    Initial print runs to optimize economy of scale based on advance orders
    Because of multiple title offerings established relationships with book buyers, magazine editors and writers, and familiarity with promotion of books and authors at industry conventions, as well as setting up authors publicity events
    Physical warehousing and shipping of books
    Accounting services

    I discussed as early as my 1987-1988 article “Here Come the Paperless Books!” how electronic book publishing would reshape the book market, and all of my predictions have come to pass. All of them, including my description of what turned into the Amazon Kindle, within one once of its actual weight.

    If an author does not need extensive editorial work, the costs for preparing a book and making it available on the Internet are now trivial. The cost of distribution is also minimal. If an author can afford to pay for professional publicity and advertising — and most authors get solicited for these services in their email inbox several times a day — there really is no service a publisher can provide for an author that an author can’t do for himself these days.

    The question isn’t what royalty a publisher can offer an author these days.

    The question is what authors are such known quantities that publishers can successfully compete for a piece of the action.

  • Crosbie Fitch August 25, 2011, 3:02 am

    If the author has sold their work to their customer, their writing to their readers, then there’s a free market in copies.

    The word ‘royalty’ disappears, being as much an anachronism as the privilege of copyright that spawned it.

    If eBook readers don’t render paper obsolete, then paper/hardback copies may still have such low demand that they need to be printed on demand, e.g. as smallprint magazine format ‘textbooks’ for impoverished students or hardbound as luxury goods for travellers on cruise ships (bankers reminiscing over their bailouts).

To the extent possible under law, Stephan Kinsella has waived all copyright and related or neighboring rights to C4SIF. This work is published from: United States. In the event the CC0 license is unenforceable a  Creative Commons License Creative Commons Attribution 3.0 License is hereby granted.