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Saturday, July 9, 2016

What’s A Fair Royalty Rate For Authors?



A little over a year ago the Authors Guild initiated an effort to win greater digital royalties from book publishers.  In its letters to publishing houses it asked that standard contracts reflect at least a 50% royalty rate on net e-book income, instead of the typical 25% found in current agreements.  The letter also demanded that book publishers give the publishing rights back to writers once it stops supporting a book.  Their letter said authors “should not have their hands tied with non-compete and option clauses that can make it impossible for them to write new books without delay.”

The May 2015 “Fair Contract Initiative” sounds ideal but so far there’s no apparent breakthrough in the way publishers conduct business.  The Authors Guild has been meeting with publishers to advocate for authors and present its demands.

Something significant would have to happen in order for the majority of the major publishers to cough up money or show flexibility in its control of an author’s work.  As long as the Big 5 keeps merging other presses into its fold, their power grows over authors and literary agents.  Until an independent publisher not only offers a great royalty rate but can deliver enough sales for it to mean something, the Authors Guild may feel a chilly reception.

The Authors Guild uses strong language on its website when asserting its intentions and values.  It says:  “Times have changed in the book world, but the ‘standard’ publishing contract has not kept up with the times.  Today’s standard book contract is filled with terms, conditions, and language that would be recognizable to authors of a century ago, a remnant of a by-gone era when e-books, print-on-demand, deep pricing discounts, and online booksellers weren’t even a gleam in the eye.

“At the same time, new overreaching clauses have been added to insulate the publishers from any potential loss, placing all risk on the author.  Yet, today’s authors are often asked to sign these standard agreements “no questions asked,” and if they question author-unfriendly terms, they are often told the clauses are 'not negotiable.'”

It’s been a battle forever in book publishing, where authors say they deserve a bigger share of the profits and publishers push back talking about costs, risks, losses.  Maybe the best solution is for authors to receive things on a scale, so everyone’s treated fairly and there’s an incentive for success.  For instance, why not have the royalty increase based on how many books get sold?  Instead of an author getting 25% for ebook sales, fill contracts with bonuses, such as:

If ebook sales exceed 5,000 copies, the royalty on copies 5,001 + will pay out at a 50% rate.  This type of scale has been done on paper books, where once a threshold is met, the royalty jumps up.  This way publishers are in a position to make sure they recoup costs and at the same time reward successful authors.

There should be bonuses for awards won, hitting a best-seller list, and for reaching any other relevant benchmark.  At the same time, in cases where authors do not receive an advance or a very small one, their royalty rate should  start out at higher rate because they too are taking a risk of being with a publisher who isn’t showing real support for the book.

Author contracts need to have language about PR and marketing.  That’s really what sells books and unless the plan is quantified and detailed into the contract it's as if no plan really exists.

Publisher-author contracts have improved over the years and more writers are educated on the terms of their agreements than before.  Writers have more options to choose from in terms of how to get published.  Whatever the royalty rate, publishers and authors must see each other as a strategic partner and not an adversary.  The goal is to sell lots of books because then everyone wins.

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Brian Feinblum’s views, opinions, and ideas expressed in this blog are his alone and not that of his employer. You can follow him on Twitter @theprexpert and email him at brianfeinblum@gmail.com. He feels more important when discussed in the third-person. This is copyrighted by BookMarketingBuzzBlog © 2016

1 comment:

  1. As long as you're suggesting incentives and benchmarks, let's also talk about how different books demand different amounts of work in terms of design, editorial, production, publicity. The blanket X% of net might work if retail prices are in proporiton to the work that goes into a book, but many retail price ceilings are set by the marketplace.

    A work of text only, no maps or images or how-to charts and graphs and bullet lists, and no sidebars, takes a lot less work than a cookbook, say. Or maybe not, if the author's text needs serious repair.

    Once we introduce a variable in one place, it opens up the entire discussion: how should books be priced, who gets paid for what, should we eliminate SRP and go to net pricing entirely?

    It doesn't make sense to me to look at this single issue in isolation from the rest.

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