Quote:
Originally Posted by ATimson
The author's money, if any*, comes out of the publisher's bucket. It's not really something that can be separately broken out in an overview like this, simply because the amount varies so widely based on the individual contract.
* Until the author earns out their advance, they don't get any royalties.
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The article in the OP had this calculation to prove that publishers are making less money with the agency model:
Quote:
Take that $24.99 list price. Let's say the e-book would have sold for $9.99 at Amazon in the old days but now the publisher charges the consumer $12.99:
Wholesale model e-book:
Publisher: $12.50 (roughly 50 percent of $24.99 hardcover retail price)
Amazon: - $2.50 (selling at $9.99)
Agency model e-book:
Publisher: $9.09 (70 percent of $12.99)
E-bookseller: $3.90 (30 percent of $12.99)
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If the author gets 20% in each case we have:
Wholesale model e-book:
Publisher: $7.50 (30% of $24.99 hardcover retail price)
Author: $5 (20%)
Amazon: - $2.50 (selling at $9.99)
Agency model e-book:
Publisher: $6.50 (50 percent of $12.99)
Author: $2.60 (20%)
E-bookseller: $3.90 (30 percent of $12.99)
So the situation that you get is that the reader pays 30% more, the author makes 48% less, while the publisher makes only 13% less.
If you look at older articles you see things like:
books are sold to bookstores and to Amazon at a discount rate of 55 percent,
standard 55% discount for wholesalers.
So that means that the situation looks more like:
Wholesale model e-book:
Publisher: $6.25 (roughly 25% of $24.99 hardcover retail price)
Author: $5 (20%)
Amazon: - $1.75 (selling at $9.99)
Agency model e-book:
Publisher: $6.50 (50 percent of $12.99)
Author: $2.60 (20%)
E-bookseller: $3.90 (30 percent of $12.99)
And this means that the publishers are actually making more money with the Agency model. Shocking, I know
