EBW Knowledge Base

Royalties

This is a contentious area. Many authors think ebook royalties should be higher, since the publisher is saving on production and distribution costs. Publishers know things are often more complicated than that, and that they may be forced to pass any savings on to consumers, under pressure from large retailers.

Moreover, under some contracts, electronic rights may fall under subsidiary rights clauses that give the author a far higher share of revenue than their royalty rate. A demanding author could even argue that they deserve a high subsidiary-rights percentage of revenue if you outsource most of your ebook creation and distribution, to the point that you’re effectively licensing your ebook business to a third party.

My recommendation:

1. Offer authors the same royalty as the highest print-sales royalty in their contract, or offer all your authors the same, generous royalty (but not as high as a subsidiary-rights share would be). It may be increasingly common to offer 20–25% of net receipts.

2. Always treat ebook creation as an in-house responsibility, even if you outsource parts of the ebook-creation and distribution process.

3 Comments

  1. Offering an author 20%-25% royalty on e-books, is pathetic. Many distributors, and publishers, are offering 85% royalties of net receipts, AND the author RETAINS all subsidiary rights, TV, series, and film among others, incl. printed version.

    So why would anyone accept, 20%-25% royalties, when you can get 85%.

    Some charge you a nominal fee of $170 to get the e-book formatted and corrected, and you keep 100% of all royalties, and none of this “monthly fee” malarkie either.

  2. Arthur says:

    Sigurjon: an ‘acceptable’ royalty rate depends entirely on the publishing deal in question. It’s impossible to take an overall ethical standpoint on royalties when deals vary hugely in cost and scope from one company to the next. If a publishing company is investing tens of thousands in production and marketing, a 20% royalty may be absolutely fair. But when a publishing company is little more than a production house, 80% may be fair.

    When an author pays *anything* towards the publication of a book, that author is self-publishing. And for self-publishing, royalties should be very high, around the 70–80% mark at least. Don’t be fooled by ‘nominal fees’, they are charged only by self-publishing services masquerading as publishers. A real publisher is an investor, investing substantial resources, and therefore bears risk in the project. A self-publishing service, on the other hand, covers their risk with money from authors. When a company bears no risk, there is no reason for them to properly market a publication. In that case, the author has to do all the marketing and carries all the risk. Whoever bears the highest financial risk earns the highest returns on a successful publication.

  3. Sigurjon Helgi Kristjansson says:

    The problem is, that publishers today, cannot really be bothered to promote books, but rely heavily on word of mouth, and the reaction of customers on amzon and the like, to the genre in question by having the option of reading a portion before you buy.

    An author, should therefore consider, if it isn’t in his best interest, to self publish first, free of charge on sites like smashwords, and ensure, that both the first couple of lines grip the reader, that the title is catchy, and the cover too, prior to going in for POD (print on demand), where you can buy a reasonalby priced promotion package.

    Unfortunately, publishers who say, that they are taking all the risks, give you a so so deal first, and then seem to want to give you less, the more you sell.
    That to me, is a bit like the same kick in the teeth, that Michael Flatley was given, after he got Riverdance to take off the ground. He later got another show ready, and just for the heck of it, wanted to see if people would back his show. They said they would, but wanted to interfere with the show, and wanted too high a share for doing nothing. He said to them no thank you. They said he would not be able to get the financing. He said he didn’t need to, as he already had the money. He just wanted to see what they would say.

    ERGO, First try and publish on smashwords and the like free of charge, or there are sites, where you can get people to sign up to buy your book if you publish, and this will give you an idea, if your in the right genre, and if it is likely to be a success. If you are happy with the response on e.g. smashwords, go in for a Print On Demand service, and buy a package that suits your budget, and forget about the blood sucking publishers, Who want to interfere with your work, unless you cannot write proper English or whatever, and need a full blown service, then there are POD services, that can provide that too, without interfering with your creative work. – Just because your style isn’t the “typical accepted style”, doesn’t mean it won’t sell. – An Icelandic author, Halldór Kiljan Laxness, wrote books, with diabolical spelling and grammar. The typesetter, corrected it, as was common in those days. When the publisher got the proof galley, they complained, and said, that the printers were to stick to the original script. The typesetter was dismayed, and went on a bender. Halldór Kiljan Laxness, whose style and writing I do not appreciate, but had rammed down my throat at school, went on to win a Nobel Prize for Literary Achievement, as well as having his books published in many languages. – Mind you, once you win a coveted prize, you could write anything on toilette paper, and it would be considered a work of art.

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