Jeffrey Trachtenberg of The Wall Street Journal reports that authors are getting screwed by publishers in the ebook business.
It has always been tough for literary fiction writers to get their work published by the top publishing houses. But the digital revolution that is disrupting the economic model of the book industry is having an outsize impact on the careers of literary writers.
[…]The new economics of the e-book make the author's quandary painfully clear: A new $28 hardcover book returns half, or $14, to the publisher, and 15%, or $4.20, to the author. Under many e-book deals currently, a digital book sells for $12.99, returning 70%, or $9.09, to the publisher and typically 25% of that, or $2.27, to the author.
But Trachtenberg leaves out an attractive third option (and I have no idea why he did). What he doesn't say is that an author can publish their ebooks to the Kindle themselves and earn 70% of whatever the purchase price is ($2.06 on a $2.99 ebook). So why even bother with a publisher? I know it's a question more and more mid-list and literary authors are asking themselves. I certainly am.
The problem here isn't the rise of ebooks…it's publishers that are a) charging too much for ebooks and b) not giving a fair royalty on ebooks to authors.
In other words, it's not ebooks that are the problem here, it's the publishers failing to adapt.
Sounds like authors are encountering the same paradigm shift as musicians. Your solution seems to be the one a lot of bands are using.
Well, it’s all relative, eh Lee? 70 percent of not much is still not much, or as the old man always said, “Nothing from nothing leaves nothing. Unknowns without a previous publishing platform still are vanity writers going nowhere.
Mr. Trachtenberg is exaggerating. Typically, an author gets 10 percent of a hardcover sale on the first 5000, or $2.80 on a twenty-eight dollar book. (Many novels are not priced that high.) The author then gets 12.5 percent of the next 5000, or $3.50. Only after a 10,000 sale does the author get 15 percent. And that’s only on the hardcover books above 10,000. Very few novels sell 10,000 copies.
I should add that ebook sales are free of retailers’ returns, so there are no reserves against returns for ebooks, and the author gets his money sooner than he does for print sales, which is a better deal for authors, who usually wait two years for the full payout on a print edition.
I had some interesting correspondence in August with an ebook publisher who has been running his present business since 2005 and before that had dabbled in ebooks as a writer.
He said: “Most trad publishers see ebooks as a threat not an opportunity and for that reason steer clear of them. I was also published in the UK a number of years ago and as soon as I mentioned the possibility of ebook sales (even back then when it was all very new) they simply tore up the contract and removed my books from sale.”
He also had something to say about percentages.
“I think the term you have to be careful with is “Net Sale Proceeds”. X—— are a distributor. So, if they get the standard Amazon terms on Kindle then they will make 35% of the sale price as Net Proceeds. They then pass 80% of that or so onto the author – which is about 28% of the book price. On [my site] we pay out on the gross sale price – 40% or for high volume sales authors (see our guidelines) we will pay up to 50%. So if X—— published on [our site] they would make 40% of the sale price and then pass 32% of the sale price onto authors.
“I’ve heard it before that X—— looks very good rate wise – until you realise they work off paying out on what THEY receive from the various outlets they sell on – which then makes it a lot less for the authors they represent. At least, that is my understanding and what I’ve been told by others on how things work there.”
It sounds to me like middlemen are already moving in to claim a slice of the action. Writers can only hope the margins won’t end up looking like those we see in the dysfunctional paper-book industry.
My own thoughts are that it’s a minefield and you need to proceed into it only with the utmost care.
The real problem here is with the writers and their agents. Until they demand a much bigger cut of the digital pie the publishers certainly won’t offer it up. Right now the publishers are scrambling to find a way to hold on to the only thing that will keep them afloat for the next few years: the almost-no-cost-to-them income that e-books generate.
By the time most books become e-books for a publisher, the editing, layout and covers are done. Their jobs as printers, shippers, and bill collectors have been eliminated by the e-technology. In most cases they were doing very little publicity anyway, so that part of the equation won’t change much.
Other than a launch platform (which can be very valuable) I don’t really see why publishers should be taking much of a cut of e-books at all. Writers are just subsidizing the rest of the company by allowing them the large piece of the pie they are currently giving away.
Sooner or later this is going to all boil away and the relationship will really be between the read and the writer, like it should be. (Although good editors will ALWAYS be important to the process.)
When the scales have tipped far enough in the e-books favor, some of the Best Selling writers will jump ship and see their incomes increase five fold (at least). That will be a rough day in New York.
And in this new e-book age, books should also be more affordable to the public as well. No more excuses about the high cost of paper and the brutal returns.
The waste in traditional publishing is outrageous. And it has been for a long time now. They resisted change when it could have done them a lot of good. Technology is going to force a new form of change upon them.
They better find new ways of making themselves valuable to the writers in the future, or they may discover that the business will be leaving THEM behind.