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Originally Posted by Kali Yuga
So in the contracts, isn't a sale a sale -- or to be specific, isn't an ebook sale treated the same as a hardcover, since the wholesale price is the same -- regardless of whether it's paper or electronic? I mean, I can't imagine that the authors are giving the publishers the ability to collect all the revenues from an ebook sale.
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Two things.
1. Electronic rights are separate from hardback rights, which are separate from paperback rights, which are separate from foreign-language rights. You get the picture.
2. If the publishers are demanding the electronic rights as part of the initial deal, it is probable that the publishers are not offering the best royalty rates for electronic. Now that ebooks are becoming more prevalent and lucrative, the agents are not able to negotiate for the best rates since the rights were given, for whatever rate, in the initial deal.
But no, I don't think anyone is giving them away for free. Kristin Nelson, an agent, has written about it at her blog. She said some publishers are pushing for rates like 25% of net (this would be as part of the initial deal). Print royalties are usually paid on cover price, no matter what rate the book sells for*. It's a lower rate (8-15%, usually on a sliding scale depending on copies sold), but the cover price is set. Net (the profit after costs) can be much lower. 100% of 0 = 0.
*The royalty rate can further vary depending on the discount given on wholesale. But it's always a percentage of the cover price.
Quote:
Originally Posted by Kali Yuga
I can see how the royalty rate might be up for grabs, but I really don't see how this should specifically impact advances, especially if international rights are still treated separately.
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Advances are generally based on the number of books they think will sell. So if the publishers think an ebook will sell lots of copies (since ebooks are becoming more popular), the advance should be accordingly larger. That being said, I'd rather have a higher royalty rate than a larger advance. You have the opportunity to make more money in the long run. Of course, if your book tanks, you're screwed. But E is forever*, and the Long Tail can do much, given enough time.
*Another issue that e raises: when is an ebook out of print? Because an author can renegotiate a new contract if the book goes out of print...