Quote:
Originally Posted by Kali Yuga
You're not looking at the publisher's profits, you're looking at their revenues -- which means there are numerous costs left out of that chart. The costs for the advance, editing, marketing, legal and overhead all have to come out of that $5.92 per unit in revenues.
There's also no accounting for the many books that don't sell enough for the author to earn back their advance, or the many titles that do not break even.
And what happens if the ebook price is $10 instead of $13?
17% to author = $1.70
30% to retailer = $3.33
Digital distribution = $0.90
Revenues = $4.10
If you lower the price, 2/3 of the price cut comes out of the publisher's revenues. They'd have to sell 30% more copies at the lower price point just to break even.
Shouldn't you know all this by now?  |
The calculations don't show a 17% author royalty on retail price, but a 25% on wholesale price. The original article has also made a mistake. the publisher doesn't pay for DRM, the agent does. The split for a $10 book would be
$3.00 to agent (e.g. Amazon, 30%)
$1.75 to author (25%)
$0.90 Digital Distribution - incorrect. This is handled by the agent.
$5.25 Publisher's revenues
And to emphasise what you said, the advance doesn't come out of the publisher's revenues. Only the interest on the advance.
For a $13 ebook, publisher's revenue would be $6.82. As I said, that $0.90 for DRM, etc, is paid by the agent, not the publisher.