Pub Rants

Speaking of eBook Royalty Rates…

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STATUS: Monday madness! Sounds like a new game show. I can’t believe it’s 5 pm already. Lots of phone calls and prep work for my NYC trip in two weeks.

What’s playing on the iPod right now? HEARTS AND BONES by Paul Simon

Which I blogged about a couple of weeks ago, I just received a letter in the mail today from Random House stating that as of Dec. 1, 2008, they’ll be changing their eBook royalty rate policy.

Sigh. Here we go. RH used to have one of the nicer royalty rates in the industry (of the big NYC Houses that is. I think a lot of the smaller, ePublishing houses have more aggressive standard rates from what comment posters have mentioned.)

RH’s standard royalty rate was 25% of retail (as opposed to 15% of retail that most houses use).

Now they are moving to 25% of net amount received. A big difference. Now it’s still on par with what industry “standard” tends to be in New York but I’m still disappointed.

From the letter: “The new rates are very much in line with the ebook and digital audio rates being offered today by our major competitors. Previously, Random House’s digital royalties represented a considerable premium over the digital royalties offered by other publishers. As the economics of publishing in digital formats come into clearer focus, we realize we can no longer afford to offer such a rich premium if these businesses are going to mature and become profitable.”

I was tempted to add some commentary in there but refrained. For me, RH’s generous eBook rate gave them a bit of an edge if all other factors were equal. Well, that’s going the way of the dinosaur.

If you are a new author, chances are good you are going to get the industry standard in your first contract (barring crazy auction and publishers throwing around huge pots of money that is). And if you are an established author (with a solid track record that’s building), well then, all royalty rates are negotiable, aren’t they? eBook being just one of the factors to play with in the deal points negotiation.

11 Responses

  1. AstonWest said:

    The worst part about it is, now PublishAmerica has something else to point at and say “See, we’re just like Random House by offering royalties based on net.”

  2. Haste yee back ;-) said:

    What exactly is 25 % of net amount received?

    What expenditures are calculated then substracted from “gross,” (or retail), to yield – net received?

    How many publishing house slight-of-hand expenses are in the fine print so that a net received royalty looks like death eatin’ a cracker?

    Haste yee back 😉

  3. Anonymous said:

    What’s the point of publishing eBooks with big publishers if smaller ePublishers offer better royalty rates? It’s not as if online sales depend on established distribution channels and retail outlets.

    If you can take credit cards, you can sell eBooks on the internet.

  4. J.C. Wilder said:

    Small press epubs have always offered a much higher rate than NY. The smaller guys usually start between 35 – 45%.

    I don’t see any compelling reason that NY would have such low rates other than to help their bottom line. When you send a book to print, it’s an electronic file (or it has been in my experience with NY) and that very same file can be converted into the standard ebook formats in less than 1/2 hour.

    So where is the overhead?

  5. Linnea said:

    Any time I see the word, ‘net’, I cringe. They calculate net any way they want and pay you anything they want. Small publishers are looking better and better all the time. I started out with a small publisher and after reading about the average royalties for most writers published by big houses I can do better if I stay put.

  6. Twill said:

    anon 8:42 –

    Because the majors are not publishing *only* the ebook, they are publishing the book, but also putting out an ebook version.

    If it ever gets to the point that ebooks are most of the revenue, then your point might be correct, at least for established authors.

  7. Delle Jacobs said:

    One more reason I’m starting to feel sorry for NY published authors. It’s not bad money in e-publishing these days, and it shows in the way the major publishers are jumping into the field.

    It makes no sense at all that big brick and mortar publishers should have expenses that are several times higher than the pioneering e-publishers, who figured out how to make it nicely profitable for them as well as their authors.