Laura Miller’s 27 March 2014 story on Salon suggests that readers are being deprived of “content” because of the struggle over royalty rates between publishers and authors and agents. But the example given is a bit more complicated than that. If the author insists that Julie of the Wolves be switched from HaperCollins (who have been publishing it successfully for 42 years) to Open Road Integrated Media so she can get a bigger royalty, whose fault is it if HarperCollins insists they want to do it themselves at their standard (lower) royalty — they “owning” the right to publish? We are prompted yet again to resent the iniquity of one of the Big Five fat-cat publishers. But surely the author is the one preventing publication.

Just what royalty rate would be right for e-books? 50% as per Open Road we can perhaps accept as the high bid (though there are of course indie publishing types who think even that rather cheeseparing). The Authors Guild thinks it should be 50%. If I was bidding to publish the e-book edition of an established strong-selling YA book like Julie of the Wolves I might be happy to offer a 50% royalty, knowing that I wouldn’t be encumbered by any cost for getting the book “known” or for developing it from scratch. With a new book, unknown to anyone but the author and partially to my editor, I might find such a royalty a bit too high. Once the book was written I’d have to pay for editing, copyediting, design of a cover, formatting (what we used to call typesetting). That’s pretty much it for an e-book, though of course the retailer is going to take a cut. Maybe I’d think 25% for the author, 25% for me, and 50% for the retailer might be a safer bet. After all the vast, vast, vast majority of new books fail, and who’s to know for sure this one would be an exception. Just because the cost of paper printing and binding is absent from e-books doesn’t mean that the entire amount of the resultant “savings” should be heaped onto the author. Royalty rates are a weapon of competition. If I set my standard rate at 50% I am really competing with my own margins. I expect the discussion will be going on for a year or two, and at the end I’d be surprised if it doesn’t settle down at something like 20% or 25% initially with an escalator clause bringing it up to 50% after X thousand sales.

The familiar argument that e-books are costless appears again in Ms Miller’s piece, though it is just not true*. There are always costs which need to be recovered. If we are on a slope which leads to 90% of books being sold as e-books, it would be a red-faced, red-ink-soaked publisher who had agreed to allow a 50% or 70% royalty on them from the get-go. We live today (and maybe will for ever) in a hybrid world where the needs to be a printed edition as well as an e-book edition. Demanding a higher royalty on one edition just means the other one subsidizes it even more. Loading costs onto the print edition — just because up until now that’s how it’s been since most e-books even now are conversions from a pre-existing print edition — is not a reason to continue to do so. After all, the print edition may not sell. Dennis Johnson of Melville House, referring to book buyers’ habit of browsing in physical bookstores to find out about interesting new titles, then going online to purchase an e-book at a lower price, said “Showrooming is real. In a way, the print book is an advertisement for the e-book and the e-book royalties subsidize the expense of getting those print books out to the stores where people can discover it.”

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*Julie of the Wolves may be a relatively cheap book to convert to digital, plus a book which can expect to sell pretty well. But a very different story could be constructed with say Oswald Wynd’s Black Fountains, published in 1947 by Doubleday, and out of print for some time. Obviously no digital files exist – do these folks think they can be created for nothing? The fact that Wynd died in 1998 makes his books (all of them are OP in USA, and only The Ginger Tree seems still to be available in UK from Eland Books) difficult to bring back into “print”. The cost of chasing up heirs and getting rights is probably more than anyone could ever reasonably hope to make from selling his works as e-books.

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