Pub Rants

eBook Royalty: Another Way To Protect

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STATUS: Not sure what is up with Mondays but they seem to be getting away from me lately.

What’s playing on the XM or iPod right now? CAPE CANAVERAL by Conor Oberst

Most authors, at this point in time, are not interested in walking away from a publishing contract over electronic book rights. The numbers are growing certainly (as we can see that statement to statement) but the numbers, in general, are still very small in comparison to traditional print sales.

Now there are certainly some exceptions. I’m very interested in seeing how it unfolds for author JA Konrath who has long blogged about making a living from electronic book sales and has decided, for his most recent novel, to go with Amazon Encore for the print with the release from Kindle coming earlier. (By the way, Mr. Konrath is embarking on this journey with his agent.)

From what I can tell from my own negotiations as well as from convos with other agents, Publishers are currently holding very firm on 25% of net receipts for the royalty structure. If they are doing an agency commission model (i.e. Apple) they are either not changing their definition of net amounts received in their contracts or they are sticking to the definition that it will be based on monies actually received by the publisher—translation: royalty of 25% of net to author calculated after 30% commission paid to third party (such as Apple). In other words, author is receiving 25% of 70% (not 100%). Reference my earlier blog entry on this topic to get up to speed.

So, if the author does not want to walk away from the offer over ebook royalty (and right now I’d have to say that’s most authors), what does an agent do?

We find another way to protect the author. One method is to include language in the publishing contract that dictates that if industry standard changes in regards to electronic book royalty rates, then the rate can be amended or renegotiated in the future to adhere to new industry standard.

Feel free to add that tidbit to your contracts file.

21 Responses

  1. Mary Anne Graham said:

    I think Joe and his agents are pioneers, blazing a new trail that will soon become an alternative for publication.

    Bravo to Konrath’s agent for continuing to believe in Joe’s book after the bigs turned it down.

    I hope they sell a ton of copies. People who have the courage of their convictions should be rewarded.

  2. Stephanie McGee said:

    I appreciate how well you do at making everything clear and concise. Legalese can get so confusing to me that I really like reading this in plain language that I can understand. The more knowledge we have as authors, the better prepared we are to embark on the publication journey.

  3. Joseph L. Selby said:

    Gotta keep chipping away at that granite. eRoyalties are a really big deal to me, not because what they mean now, but what they’re going to mean five years from now. I only hope that I’m in such a dominant negotiating position that my threat to walk away from a deal over eroyalties would have a genuine impact on the final agreement.

    As it is, I would take a lower advance for better eroyalties if that established a baseline royalty rate for future publications. I consider it a solid investment in my future.

  4. Giles said:

    I am so glad someone out there is blogging about this. I’d be really nervous if I didn’t SEE agents discussing this topic out in the open. It’s bloggers like you that help dispel the myth that you have to get published before you can begin to learn the secrets of the ancient society of the publishing world. 😀

  5. Anonymous said:

    Maybe this has been covered before, but I missed it. Do the electronic royalty payments count against the advance or are they independent of it?

    Dave K

  6. Anonymous said:

    The absolute thievery that is the royalty structure for e-books makes me very hesitant about even trying to get published in the traditional manner.

    As a poster mentioned above, it is not 2010 that worries me. It is 2020 or pick-a-date-down-the-road.

    If I am fortunate enough to get published and do well, I am certainly going to regret agreeing to the 25% or 70% model if 80% of my sales are e-sales. So the publisher saves the cost of returns, printing, warehousing and transportation and I get 25% of 70%??

    Screw job. Nothing more, nothing less.

  7. Erin Edwards said:

    Boy, this really makes me want to make sure I get a tough, smart, agent. Thinking of that little side gate to add when the publishers won’t budge? Golden. I had been wondering if just such a thing could be done.

  8. Erin Edwards said:

    In the next blog I read another *agent* quotes Kristin as an authority on how the film industry defines ebook rights. If that’s not an endorsement of what a leader she is in the field, I don’t know what is.

  9. Anonymous said:

    When a book goes out of print, it usually reverts to the author.

    How does an ebook go out of print?

  10. Lexy said:

    I see value in having an agent. I’m starting to see less in signing away my rights with publishers who don’t appear to respect their consumer base.

    In any case, enlightening post. Encore seems like a good deal; let’s see how it pans out.

  11. Agent Kristin said:

    Anonymous of 2:19

    Two words for you: Sales Thresholds

    In the Out of Print clause is how we protect authors when it comes to ebooks and what constitutes out of print.

  12. Kevin said:

    Do you see the day when writers, especially established writers, will keep the electronic rights and contract directely with disributors/retailers?