Thursday, October 20, 2005

Royalties and sales

I was perusing a new e-publishing site, Ocean's Mist Press, and was interested to see they have a sliding scale for royalties. Their base rate is 40%, but if a book sells a hundred copies, the rate goes up to 45% (for the books sold past the first hundred), and if it sells five hundred copies, the rate goes up to 50%. I haven't seen an e-publisher do that before. (Slightly OT, e-publishers still typically sell fewer copies than New York books, in my experience, but bear in mind that if an author makes two dollars per book, five hundred copies will earn a thousand dollars. Particularly for novellas, the amount earned per word can actually wind up being higher in e-publishing than in traditional publishing, though of course it all depends on sales.)

E-publishers generally give higher royalty rates to help compensate for lower sales, which helps attract authors. This is why I'm finding it hard to understand the furor in the e-publishing community over Harlequin's royalty rates for ebooks. The Smart Bitches mentioned that Harlequin is getting into selling ebooks and paying a royalty of six percent. This has caused a lot of outrage among some e-published authors, but I really don't understand why. Harlequin doesn't need to attract authors. They have authors coming out their ears, metaphorically speaking. And they have pretty darn good sales to begin with.

I gather some e-published authors think this is going to cause e-publishers to drop their royalty rates in the long haul. I'm not sure that's going to happen, though. What Harlequin does is more or less irrelevant to small presses, just as what small presses do is more or less irrelevant to Harlequin. In a way, small press e-publishing and New York publishing are two different worlds. Those worlds intersect more and more often as small presses break into the stores, and as authors choose to write for both, but they're not the same, and I don't see why Harlequin's lower royalty rate should have any effect on the e-pubs. After all, it's the high royalty rates that encourages authors to write for e-pubs, so if one house lowers its rates drastically, authors will probably leave for a better-paying e-publisher. The market has a way of dealing with these issues.

And if all e-publishers do choose to lower their royalty rates eventually, it'll probably be because they have achieved higher sales. Which perhaps wouldn't be such a bad thing.


  1. What small presses do most DEFINITELY affect what Harlequin (and other large presses) do -- why do you think so many NY publishers are jumping on the "erotic romance" bandwagon? becuase the small presses and the epubs have made a fortune with it.

    I don't think the royalty rates will alter in teh near future, but it takes a long time to see the effects of something like this. If print sales of harlequin go down, and e-sales go up (say, over the next ten years) than Harlequin authors will be seeing their royalties predominantly come from ebooks. And if they are willing to accept those low royalties for primarily ebook titles, then I think the other epubs WILL follow suit. They won't pay money if they don't have to.

  2. Sounds like Harlequin is keeping their ebook royalties in line with their print royalties. I don't think that companies who publish first in electronic format will reduce their rates. There isn't much justification since they don't have the print costs to contend with. What does bug me is the newly introduced practice of an epublisher requiring authors to pay some of the production set-up costs for print on demand. Ellen, do you have any news on this?

  3. Maybe (though I'm not sure anyone is making a "fortune" in e-publishing, except maybe Ellora's Cave). But Harlequin can get away with low royalty rates because of generally good sales and high prestige. Also, if I want to write category-length romance for a NY pub they're virtually the only game in town. This gives them a bargaining advantage. If I target and sell a Blaze to them, I'm very unlikely to quibble over one clause in the contract. Conversely, if I find that small presses are paying the same low amount in royaltis as Harlequin is, I'm probably going to try to sell to Harlequin rather than small presses-- unless the small presses are regularly selling as many copies as Harlequin is, in which case I probably wouldn't care where I sold it. Which could happen in ten years, I suppose. But right now, and probably for the foreseeable future, e-pubs really HAVE to pay higher royalties, or they won't get the submissions.

    On the flip side, as my e-publisher expands further into print books, I could see my income shift from mostly ebooks to mostly print books. Unfortunately, the royalty rate for print books is a lot lower! And even with the higher cover price, I make quite a bit less per book. So I could sell just as many titles but make less money.

    Complicated world, isn't it?

  4. Mary, NCP doesn't charge setup costs for print. They're only putting their better sellers into print, so presumably they won't wind up gambling their money on books that don't sell (one can hope, anyway!). EC doesn't charge, either, though all their books are going into print. I am aware some e-pubs are doing this, though, and frankly it makes me a little uncomfortable. I avoid any situation in which a publisher wants money from me up front. I guess it's not truly self-publishing, since the author isn't required to do it, but it still bugs me a bit. I don't like to see the line getting blurred between vanity presses and royalty-paying e-publishers-- too many people already equate "POD" with "vanity presses."

  5. My Brava electronic royalties are in line with my print royalties, which, of course, is considerably less than what EC and AQP pay me. I brought it up with my agent (at the time) and was told there was no negotiating that. Personally, I think it sucks. What is their overhead on an electronic book? Not much. In e-publishing, it's the author's job to format the book for the publisher. In NY, they'll have to format it, but that extra effort shouldn't equal such a substantial drop in what I'm paid. JMHO. :)

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