Some authors getting a bad deal on ebook royalties?

[sirbruce]

I was surprised to read this on the Amazon forums:

Posted on Jun 1, 2009 7:30 PM PDT
Patricia Sierra says:
My contract with my publisher (the dreaded Random House) says they'll pay me 25% royalty on ebooks instead of the 15% paid on my DTBs, but the royalty will be paid on the retail price, not the list price. When I see Random House books being "sold" for free on Amazon, I have to wonder if the authors are being paid anything. I don't see how they could be if the retail price is $0.00.

Is this just the case of a bad contract, or is this practice of ebook royalties being based on the list price becoming an industry standard?

[Andybaby]

was it her book going for free?

I don't know about you. but if a publisher is giving a book away free, they know what they are doing, they are generating interest, they are trying to make money. which in turn leads to more money for the author.

and if Ms. Sierra doesn't like random house, hell, don't publish, its your work.

[netseeker]

Originally Posted by sirbruce

Is this just the case of a bad contract, or is this practice of ebook royalties being based on the list price becoming an industry standard?

I guess you meant the retail price rather than the list price.
From my experience publishers are interested in contracts based on the retail price.

[sirbruce]

No, her book wasn't free.

Yes, the issue is that some publishers are trying to give royalties for ebooks based on retail price rather than list price. The entire reason why list price is used for pbooks is to avoid the problem of discounts.

The $0.00 issue is usually covered under a special deals and promotions clause, so there's no need to make ebooks based on retail price to avoid publisher losses just because they want to give away a free ebook for a while.

[sirbruce]

Originally Posted by netseeker

From my experience publishers are interested in contracts based on the retail price.

That's demonstrably not true for pbooks. Do you mean for ebooks?

[netseeker]

Originally Posted by sirbruce

That's demonstrably not true for pbooks. Do you mean for ebooks?

Yes i mean for ebooks. You asked for that...

or is this practice of ebook royalties being based on the list price becoming an industry standard

[doreenjoy]

I've had contracts with four publishers that had ebook clauses.

In all cases, the ebook royalties were a percentage of the cover price. "Promotional" copies were royalty free, BUT they were limited to booksellers, contest prize winners, and reviewers. Books "sold" for $0.00 would have been paid to me at the cover price.

[Andybaby]

so shes complaining on behalf of other authors, based on unsubstantiated facts based on her contract with a publisher, who is obviously unpopular based on her little rant.

to me it sounds like even if her book was given away free still no one would buy it.

but anyway. I don't see how giving away free ebooks can do anything but increase sales for that book, and/or authors other books.

[doreenjoy]

Well, a lot of authors don't read contracts, or don't understand them if they do read them. Some authors think that's what agents are for. And it's possible that Random House doesn't specify what constitutes promotional use (but I doubt it).

I do agree that judicious promotions and freebies are good for an author's career. Usually the readers who pick up a book for free wouldn't buy it in the first place but they might buy the next book by that author.

[Gideon]

My girlfriend started DEVOURING a freebie I picked up from Amazon months ago. I gave her a ipod touch so she could use my books and she just stumbled upon it. I've never seen her read like that! And she'd never have ran across it without the freebie. There was one more by her that was given away, but I'm sure all of them will be purchased now.

It was In the Bleak Midwinter by Julia Spenser-Fleming. It's "Female Episcopal Priest Detective" It's filled with lots of Episcopal inside jokes and as both of us are going to be priests in the church, it tickles her a lot. Evidently it's a good book, too.

I don't mind buying books. But since I've had an ebook reader, freebies have definitely done good for the authors doing them that have existing bodies of work. They didn't lose a sale because I never would have bought them, but gained purchases they wouldn't have for their other books.

[cjcherryh]

The generation of revenue by giving away an e-book is daily cited by some publishers as a benefit of their site. As a writer whose book is being thus dealt with by a certain publisher, I can state it is not beneficial: what they are doing is using it to promote their company's site, to generate sales---but I get a few dollars a year from this process, and see no added sales. Not only that, they thus hold it 'in print' and thus prevent reversion of rights. This is not a good thing.

Of all the many copies of my books in e-book release, I have yet to see any revenue---and most of them are pirated copies, or copies distributed by otherwise honest sites who have assumed based on their acquisition of a company that e-rights went with the sale. My publisher's legal department is now trying to straighten this out, and many have been withdrawn from sale, but neither my publisher nor I have received revenues from these copies.
Yes, it is publicity, which never hurts, but if no funds ever come through, where is the money going? Not to the creator, certainly. Not to the publisher of record. Somebody is collecting money from these sales. Who, I wonder.

[sirbruce]

CJ,

I think evidence is now pretty clear that offering the first ebook in a series for free helps generate more revenue than otherwise if they have other books in that series to sell. Now with the ebooks in your particular case, it may be that they just aren't generating enough revenue to be noticeable, or there are other issues relating to your royalties; I can't speak to that. I have read your website though and I hope you get your ebook situation straightened out soon.

As an aspiring author I too am disturbed by the idea that as long as someone offers your ebook in some obscure shop somewhere your book is still "in print", and I highly recommend negotiating a clause in your contract to ensure a minimal number of ebooks must be sold in order to still qualify as "in print".

As to what Andybaby said, my point was not so much the free book part, but my concern that authors were being given royalties based on ebook retail price, not cover or list price. It's interesting to me that netseeker's experience is 100% the opposite of doreenjoy's in this regard. In any case, whether or not an author gets money on a $0.00 sale is one thing; I'm more interested in seeing that they get full royalties on their $24.95 ebook even if Amazon sells it at $9.99.

[ahi]

Originally Posted by cjcherryh

... giving away an e-book is daily cited by some publishers as a benefit ... As a writer whose book is being thus dealt with by a certain publisher, I can state it is not beneficial: what they are doing is using it to promote their company's site, to generate sales---but I get a few dollars a year from this process, and see no added sales. Not only that, they thus hold it 'in print' and thus prevent reversion of rights. This is not a good thing.

These two seem like contract issues with which the North American publishing industry--famed for short-changing authors every step of the way they can--is ripe.

Originally Posted by cjcherryh

Of all the many copies of my books in e-book release, I have yet to see any revenue ... neither my publisher nor I have received revenues from these copies.

This is unfortunate and obviously wrong and almost certainly illegal. I would guess it is a symptom of the eBook market's and eBook companies' immaturity. On the bright side, it should only get better than it currently is.

Originally Posted by cjcherryh

and most of them are pirated copies,

Which, let's remember, are not necessarily lost sales. Most people willing and able to read a novel they like on the computer screen probably can't or won't shell out $20 - $30 for a book. And, perhaps it is significant, you wouldn't see any more royalties as the author if these cheapskates went out and bought a $1 - $10 used copy from a local bookstore.

Originally Posted by cjcherryh

Yes, it is publicity, which never hurts, but if no funds ever come through, where is the money going? Not to the creator, certainly. Not to the publisher of record. Somebody is collecting money from these sales. Who, I wonder.

For sold copies, the company that made the sale is surely anticipating paying out royalties sooner or later. Who in the North American Publishing/eBook industry could possibly think that C.J. Cherryh books can be sold without subsequent royalty payments? You're no unknown.

I would think that once your Publisher begins correspondence with the companies in question, some monies will be forthcoming... though who knows when? Given that the entire North American publishing industry is still operating on depression era stop-gap measures of "pay for books we ship you only after sale to customer, when you eventually get around to it" means prompt payments are not exactly an enforced norm.

And for "pirated" copies... there is no money going anywhere, of course.

---

I do hope the problems you are experiencing with your eBooks, CJ, are resolved sooner rather than later. I'd like to think though that--as above reasoned--they are not really fundamental problems with the current approach toward eBooks, but rather growing pains, in part made worse by a not entirely humanitarian industry's pre-existing failings.

- Ahi

[Andybaby]

I learn more here every day about the publishing industry, and unfortunately its not all good.

CJ, If someone other than your publisher is selling your books without your permission its wrong. the only person making money off your ebooks should be you and your publisher. but for many authors, a good strong freebie campaign helps sell more books. your publisher should be able to instantly tell if its "their" book being sold on any website. and if not, a simple phone call can get the book pulled if its not theirs. if it is "their" ebook being sold, and they cant give you Numbers about sales. then perhaps a bit of digging is in order, your publisher should be able to account for every dime made on ebooks. its 100% digital, payments are digital, sales numbers are instant, there are Few if any returns, and any there are does not mean a returned copy to the publisher. the Books to do this are all automatic. It should not be difficult. and it should not take long to resolve. if it takes the legal department "time" to do this... well they must really be bad at their job then

for the NYT best sellers, I've heard the publishers are getting the same price they would for a hard cover. so they should get similar royalties. but in regards to the thousands of books that go for around 5.00 each. I don't see why they would get royalties based on if it was a 9 dollar sale.

I don't think Ebooks compete on the same level with paper sales, giving away an ebook free is not the same as giving away a paper copy for free. there is 0 loss of income on an Ebook, while the paper copy can be a few dollars. Ebooks don't compete in the used book Market, and their Market retention is longer, 100 ebooks take up about 1 Micron of space, the same as 1 million ebooks. an Ebook can be sold indefenatly, while paper copies can become hard to sell there is just not as much going on.

anyone can publish an Ebook, so the author should get more money for an Ebook. the only people getting money off an ebook sale are the Author, The editor, and the advertiser.

[pdurrant]

Originally Posted by cjcherryh

The generation of revenue by giving away an e-book is daily cited by some publishers as a benefit of their site. As a writer whose book is being thus dealt with by a certain publisher, I can state it is not beneficial: what they are doing is using it to promote their company's site, to generate sales---but I get a few dollars a year from this process, and see no added sales. Not only that, they thus hold it 'in print' and thus prevent reversion of rights. This is not a good thing.

This is terrible - ebook only shouldn't mean 'in-print', just as being only available in PoD format should be 'in-print'. I guess it depends on the individual contracts. Ouch.

Originally Posted by cjcherryh

Of all the many copies of my books in e-book release, I have yet to see any revenue---and most of them are pirated copies, or copies distributed by otherwise honest sites who have assumed based on their acquisition of a company that e-rights went with the sale. My publisher's legal department is now trying to straighten this out, and many have been withdrawn from sale, but neither my publisher nor I have received revenues from these copies.

Double-ouch. Do you mean that you're not getting anything from the copies of your books available on (say) fictionwise? I've bought six of those. (Very good too, BTW, although the formatting on the Chanur books left a lot to be desired. Good enough that I read them despite the formatting!) I know the author doesn't see a lot of the cover price, but I'd be rather upset to find out you got nothing.

Originally Posted by cjcherryh

Yes, it is publicity, which never hurts, but if no funds ever come through, where is the money going? Not to the creator, certainly. Not to the publisher of record. Somebody is collecting money from these sales. Who, I wonder.

For fictionwise, I'd suggest asking them directly. They're good people at fictionwise.

As for publicity - yes it's great, so long as your books are readily for sale to take advantage of the publicity, and that your cut of the sales revenue gets back to you. Best of luck in getting it sorted out.