Random House has just announced that it is lowering its ebook royalty rate from 25 percent of the retail price of the ebook to 25 percent of the net price (book price minus the distributor's percentage equals net) . Since most distributors take 50% or more as their distributor percentage, this is a hefty cut.
Other major publishers give a 15 percent royalty on the book price.
In comparison, most epublishers give between 35 to 50 percent of the book price. They must also pay for the cost of editing, covers, Internet infrastructure, etc., which the major publishers have already paid for when they create the paper books.
Is there anything wrong with this picture?
The big publishers keep saying that ebooks are expensive to produce, but most epublishers will tell you that all that is needed is a digital copy of the book in a specific format like PDF which the distributors will format themselves for a fee.
The big publishers, so far, have been no more willing to sell ebooks on their sites than they will sell paper copies of their books so all their talk about expenses is smoke and mirrors to hide their grab for a cheap royalty on what will become the major method of book distribution in the years to come.
Some agents have said that the publishers promise to raise the royalty rates when ebooks become more profitable, but that's a lie that has been used a number of times.
For example, during the paper shortages and rapid rise in price of paper, some years back, the publishers asked for a rate cut from authors and promised that the rate would go back up after the crisis. As you can guess, the rates have never risen.
All of this gives me such a glorious, yet painful, sense of irony about the situation. When ebook publishers started becoming successful, many traditionally published authors screamed like virgins at an orgy because they thought epublishing would harm their careers and incomes. By accepting 15% as "standard," they may be harming the epublished if epublishers follow suite and accept this new standard.
BLOGS OF INTEREST
MJ Rose talked about book promotion at agent Nathan Bransford's blog on Thursday, October 23rd. She's a genius at marketing so it's more than worth the read. http://nathanbransford.blogspot.com/
She also continues on the subject at http://mjroseblog.typepad.com/buzz_balls_hype/2008/03/which-brings-us.html .
On Tuesday and Wednesday the 22nd and 23rd, on Nathan's blog, Michelle Moran also discussed promotion.
QUESTIONS, YOU HAVE QUESTIONS? Send me your questions about publishing and craft at marilynnbyerly @ aol.com. (Remove spaces in address.)