Royalties – what should you be getting?

So, here’s the thing.  Traditional publishers offer a pretty paltry royalty rate on e-books. The Writers’ Union of Canada argues for 50 percent in their Writer’s Bill of Rights in the Digital Age. But really, that doesn’t often happen.  An agent I know well (though who’ll I’ll not name because it is her business after all) claims that most publisher’s contracts inevitably come in at 25 percent for e-book royalties.  I spoke to a publisher as well who decried the 50 percent saying that while we may insist there’s no storage or printing or shipping costs for e-books, they still spend a lot of “man-hours” on the upkeep of files – changing the metadata through the life of the e-book for instance, which is all important. And I know for a fact that in my contract with my publisher, I get even less than 20 percent.

In the indie world, those kind of numbers are ludicrous.  The major sites – Amazon, Kobo, Sony, Barnes and Noble and Apple’s ibookstore – typically give you 70 percent, keeping 30 percent for themselves.  Of course, you still have to get your books up there in the first place so let me go back to my own little experiment.  Last week, I looked at three companies who convert word files and place the finished e-book, cover and all, up onto the various sites.

Author Solutions was first.  They’re owned, as I said, by Penguin.  The astute writer, might then assume that, if their e-book does well, there might be a big fat contract from the mighty Penguin – soon to merge and become Random Penguin.  That may be true, though if you have a successful e-book – through any channels – the traditional publishers will come knocking, I can assure you of that.  The problem with Author Solutions and their various imprints is that they are very expensive.  Packages here run from around $349 (US) dollars to an unbelievable $4449.  What are they going to do for 4000 dollars?  For that much money, I want a one on one meeting with Disney or Pixar, maybe a photo of President Obama reading my book and Lady Gaga tweeting about it.  In fairness, even the smaller packages here include editing and cover design – two essential components that I’ll talk about in other posts.

I have a friend – Matthew Waterhouse – who put up his very funny memoir and exposé on i-universe – one of Author Solutions imprints – and he was very happy with it.  I mention this book, Konglish: the ultimate survival guide to teaching English in South Korea, because, if you think about it – that ‘ultimate survival guide’ is very good metadata.  He’s focused on an audience of anyone who’s ever thought of teaching English overseas.  Very Smart.

Anyway, Author Solutions is too steep for my blood.  Next on my list was Bookbaby.  They’re the ones with the vast experience in the digital music world and worth a look.  Unlike, the others, their model is an upfront price of between $99 to $249 (if you want help with a cover or editing). The problem is in the fine print.  There’s a recurrent charge of 19 dollars a year after they put your book up – 19 dollars a year, forever, and I have a big problem with that – so I moved on.

Smashwords doesn’t take any money up front.  They don’t do covers or editing or marketing.  They just put your e-book up and take 10 percent of any sales.  It’s a slightly different model.  So, if you’re getting 70 percent through iBooks (and note that that’s the all important site that will do a book especially for the ipad – including enhanced books and book apps), you’ll actually just get 60 percent.  However, with Smashwords, that’s all.  You don’t pay anything else. It’s pretty good, though, one caveat here is their free ISBN number.  If you go with this, Smashword automatically becomes your publisher.  I’m not sure that means much right now – but it might mean something down the road, something your might not want to relinquish, so I was wary.  Others, like Book Baby, charge 19 dollars for an ISBN.  Well, it turns out that, at least in Canada, you can get an ISBN number for free from our government service.  I did it, and it was relatively easy.  I was also advised that you definitely have to have a separate ISBN for an e-book as opposed to a p-book should you wish to produce those yourself as well.  Moreover, you should probably have a separate ISBN for each e-book format (Amazon is .mobi, most of the rest are .epub).

Smashwords has all kinds of analytics once your book is up and selling which is important.  However, they don’t upload to Amazon – which, right now, is the largest book retailer in the world, by far.  For Amazon, it’s Kindle Direct Publishing.  Here, there is no upfront fee and no scooping of royalties (because they are Amazon and they’re already getting 30 percent).

So, this is what I went with.  A solid 70 percent royalty is mine on Amazon through Kindle Direct and 60 percent on the other sites through Smashwords.  An author friend of mine reminded me that this is something you might want to think of, not only  for a new book, but for a book of yours that has now gone out of print or a book in which the original publisher has gone bankrupt (a worrying and increasing trend these days I’m afraid).  Your book is not lost.  You can still take control of it.

I’ve been noticing that, on all the major sites, e-books from traditional publishers are priced generally about 20 percent below their paper counterparts.  Indie book prices are, generally, a lot lower.  That’s what you have to figure out.  25 percent on $15.99 is a tad under $3.99.  70 percent on a $5.99 indie book is $4.19.

So, the delicate dance of pricing begins (followed quickly by the mad stomp of marketing).  That’s next week’s topic.  Leave me a comment if you want to know more.


About gedixon

Author of three books of travel and adventure.
This entry was posted in Authors, Writing and tagged , , , , , . Bookmark the permalink.

4 Responses to Royalties – what should you be getting?

  1. Liz M. says:

    Aaack! Too many decisions, too many pitfalls! Thank you for the rundown, Glenn, very helpful. My own plan is to never actually finish my book and therefore never have to make a terrible mistake with the publishing. And the plan is going very well.

  2. Sabine says:

    Interesting blog about self-publishing an eBook! Do you also have experience with publishing a printed book?

    • gedixon says:

      Yes, I do. One traditionally published book already and another coming out in April. And my own indie published e-book right now. That’s kind of the idea here. I wanted to really compare the two – Indie and traditionally published to just see what the revenues would be and the readership.

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