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Originally Posted by jgaiser
You've lost me. So increased ebook sales is bad for authors and publishers?
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Actually, for authors stuck with traditional publishing contracts who accepted the "standard" term of 15-25% of "net" ebook revenues (where "net" is usually decided arbitrarily by the publisher) ebook sales generate significantly less royalties than pbooks. And the effect is magnified with the so-called "Bestseller" authors; ebooks can easily generate 39% less than pbooks. Basically, those folks negotiated higher pbook royalties but at the expense of lesser ebook terms, thinking ebooks would never amount to anything.
Ooops!
Kris Rusch has discussed the numbers repeatedly at her website, in different contexts, but one of the best is from last fall:
http://kriswrites.com/2011/11/16/the...-making-money/
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I’ve done this math before, but it’s worth doing again for those of you who fail to get it. This time, let’s just use a $6.99 price point as our example, and a 25% of net e-book royalty rate from the traditional publisher, and let’s ignore the problem of “net” entirely.
At $6.99, the writer is entitled to $1.22 of that book. Subtract the standard agent’s commission of 15% and the writer gets $1.03.
On that $6.99 sale, Amazon gets $2.09, the publisher gets $3.67, the agent gets $0.18, and the writer gets a whopping $1.03. The only person who gets paid less than the content creator here is the agent, and that’s because the agent got 15% of the writer’s take.
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In the past, the past the writer got 50% of cover price on e-books. So even if the publisher or Amazon sold that book at a discount, the writer still got 50% of the original cover price. Meaning that a $6.99 e-book sale gave $3.49 to the writer. No matter if the publisher only sold the book for the discounted price of $3.99.
Cover price is still the gold standard for royalty rates on print books. Only a few smaller traditional publishing companies pay writers based on net receipts, and in those contracts, “net” is clearly defined as what the publisher receives from the distributor (be that an actual distributor or a bookstore).
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The subject of the column, BTW, is how "Traditional Publishers are making money", specifically how they make more money off ebooks than pbooks. And the answer is the extra money comes from "lower costs", where lower costs includes (legally) shorting their authors.
So, with those contracts in place it is easy to see why Traditionally Published authors see "More ebook sales" as "less money for me!". They are, sort-of, being victimized.
What is less easy to see is why they continue to stridently defend their victimizers.
Stockholm Syndrome, anyone?
