Ask The Editor

March 15, 2010

What’s a fair ebook royalty?

This is a question that’s come up quite a bit lately with author and editor friends. Are the current standard ebook royalties (25 percent of receipts) fair? And if not, what would be fair?

The argument for raising royalties to 50 percent or greater of receipts is that ebooks don’t cost publishers anything to produce: no paper, no printing, no binding, no warehousing, no shipping, no returns. Whatever investment in editing, promotion, typesetting and design that the publisher made, had to be made in order to produce the print book. Producing an e-version is a trivial additional cost. So authors should get at least half because for the publisher, ebook revenue is gravy.

That argument assumes that everything stays the same in publishing and that ebooks will continue to be a small portion of books sold. We know, however, that publishing isn’t staying the same. Sales of e-readers and ebooks have risen dramatically in just the past year. Between the Kindle and the iPad, almost everyone expects that the ebook will be embraced by more readers. The pace of adoption should increase dramatically. The open question is how to quantify that adjective “dramatically.”

And for virtually every ebook bought, a print book isn’t.

Right now, ebooks are estimated to be about 5 percent of the market. What happens to the industry when they’re 25 percent?

Anyone who has read this blog more than once knows that I’m a fierce advocate for writers, am against the Google settlement because it’s a worse deal for writers than writers can get on their own from Google, and have urged writers to stand up for their rights on pay, copyright, and other issues.

So you might be surprised to learn that I’m not convinced that writers should demand 50 percent of receipts for ebook royalties.

I agree that 25 percent of receipts is too low. Publishing guru Mike Shatzkin estimates that on hardcover books, the “standard” royalty of 15 percent works out to about 27 to 32 percent of receipts, which in turn, after expenses, splits profits about 50/50 between author and publisher.

A 50/50 split of profits is fair. But that’s not the same as a 50/50 split of receipts. One day soon, e-publishing won’t be all gravy. It will be the way we publish books. And all the costs associated with publishing books (minus the printing and other costs that printed books incur but ebooks don’t) will have to factored into ebook pricing and royalty calculations.

You can bet that publishers are already factoring the future into their calculations as they set their 25 percent of receipts royalty schedules. Nobody can accurately predict the future though, and publishers are giving themselves ample padding.

The issue we need to address is how should receipts between publisher and author be split to account for a future where ebooks are a big chunk of the books sold?  The goal should be that, after publishers’ costs are covered, authors and publishers share the profits 50/50.

The percentage of receipts authors would get with a fair (50/50 profit) royalty system is not 25 percent of receipts. But it’s not 50 percent of receipts either.

– Anita Bartholomew

January 7, 2010

The next big thing in e-readers isn’t an e-reader

Watch out Kindle, Nook and other e-readers. Blio, a software based e-reading platform is rumored to offer the best e-reading experience yet. It will run on anything that has an operating system.

And it’s free (but not available until the end of the month spring, says PW).

The FREE Blio eReader software is the new touchstone for the presentation of electronic books & magazines. Stunning, full-color pages come alive in brilliant 3D. Even image-rich books are now at your digital fingertips — because Blio preserves a book’s original layout, fonts, and graphics.

Enjoy a vast selection of cookbooks, travel guides, how-to books, schoolbooks, art books, children’s stories, and magazines. Relax, learn, work, or play! The smart display lets you insert highlights, notes, videos, and even webpages. Selected books also go hands-free with Blio’s read-aloud feature.

Flexible & accessible. Shop endless titles, right from the Blio Bookstore, with access to over one million free books and a huge library of today’s bestsellers. Then, take your library on the road by syncing to your favorite on-the-go mobile device.

– Anita Bartholomew

May 4, 2009

With all the buzz about e-readers, is anyone e-reading?

The headlines shout that there’s a new Kindle in the works, said to be larger screen to accommodate textbooks, newspapers and magazines.

But wait, say other commentators, that’s so ho-hum. The real news is that Apple is developing a tablet reader that will knock off the competition.

Maybe, say yet others, but just wait until Plastic Logic comes out with its own e-reader. Or Hearst. Or News Corp. These technological advances may just save the newspaper (without actual paper, of course).

This is all very exciting, but … what percentage of the reading public either has already adopted the new technology or expects to in the next year or so?

We know this is the future. What we don’t know is when, exactly, we expect this future to be embraced by significant numbers of readers. And, if it isn’t embraced by significant numbers of readers, and soon, technology is unlikely to do much for newspapers.

– Anita Bartholomew

March 6, 2009

Barnes&Noble to challenge Amazon in ebooks

Barnes&Noble is buying Fictionwise, an ebook seller that will allow it to open an ebook store and go head-to-head against Amazon in the ebook business.

It’s a smart move. Amazon just announced that its Kindle application will be available on the iPhone. But Fictionwise, the new B&N acquisition, is already available on iPhones, on which it offers thousands of titles.

And, unlike Kindle titles, which require using Kindle as the application, either on the Kindle device or a supported iPhone or iPod, Fictionwise titles can be read on a variety of applications and devices. That means that there are fewer limits on its expansion. Amazon has tried, in every area where it’s become the leader, to crowd out the competition. When it comes to technology, however, if history is any guide, you want an application to be broadly adopted across platforms, not limited to a few.

February 16, 2009

Coming in January 2010: the Kindle killer

I’m delighted to learn that a new e-reader  is being developed: a super-thin, lightweight device with a large enough screen that you will be able to read a full magazine page without scrolling.

It’s not that I plan to rush out and buy one. I like my paper books just fine. But, if ebooks are the future, I don’t want a proprietary system from Amazon to become the de facto monopoly distribution system.

We’ve seen what happens when Amazon is in position to strong-arm
publishers on traditionally printed
and POD books.

This device will be open source — meaning that you won’t be limited to reading text in a system owned by the e-reader’s makers, which is now the case with the Kindle. It will handle Word, pdf, and other documents, and it will cost about what Kindle costs.


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