A Good eBook Royalty Deal from your Print Publisher?

IN THE last blog post I explained about what authors can expect to get in terms of royalties from a couple of major eBook retailers: Amazon and Smashwords.  Basically Australian authors will not get less than 34% of the sale price no matter where the purchaser is located. If someone from North America or Europe purchases your eBook then it will be between 50%-85% of the sale price.

Now these numbers may change if Amazon sets up a local presence in Australia, as is rumoured, and then Australian authors may get 70% of the list price when Australians purchase their works from Amazon. We’ll see.

But in this blog post I’ll talk a little bit about what traditional publishers are typically offering to Australian authors in their print and eBook publishing contracts.  My father, Robert Macklin, a distinguished Australian author, has let me check out a few of his recent publishing contracts.  They don’t make great reading from the perspective of the author.

The Australian Society of Authors (ASA) crafted a free information sheet  a few years ago outlining what local authors should seek when negotiating their print/eBook publishing contracts.

The ASA suggests that a good deal for an author is 35% of net receipts of a 60/40 (publisher/retailer) split. Let me break that down. So if an eBook has a list price of $20.00, the retailer will take $8.00, the publisher will take $12.00 and out of the $12.00 the publisher gets, the author will get $4.20. So the author will receive 21% of the list price. 

Just to remind you of the previous blog analysis, when you publish directly to Amazon or Smashwords (BWM Books will of course help you) , you will never receive less than 34% of the list price.

Commonly, however, authors are getting between 15% and 25% of net receipts from their traditional publishers.  Furthermore,  I’ve seen some tricky legal clauses which make it very difficult for authors to ever get back the rights to publish their eBooks themselves or at least to review eBook rights after a period of time.

When negotiating a contract the ASA recommends 10 tips. I’ve pulled out what I think are the most important.

1. Retaining e-book rights. You don’t have to absolutely and in all instances bundle e-book rights in with print book rights. Authors are now, like never before, able to self-publish or utilise service providers such as BWM Books to publish, market and promote their eBook titles. This is a strong negotiating position to be in. However, if you sign a contract for a print book only, also make sure that any Competing Edition rights clause doesn’t prevent you from signing an e-book separately.

2. Argue for a limited electronic rights term. It is inadvisable to sign a publishing contract with ‘all-time’ implications for the e-book. Argue for a limited electronic rights term of, say, three years, with a periodic review at 12 months, and stress the fact of uncertain publishing and market conditions surrounding e-books.

3. What are you getting per book? If you are offered an e-book royalty of 25% of net receipts – a common offer – or something else, you’re entitled as a matter of ordinary commercial courtesy to know what it means in dollar terms per unit sold. What will you earn per copy/download? If the offered contract doesn’t tell you, ask the publisher. If the publisher can’t or won’t tell you, don’t sign. Furthermore, ask when and where your eBook is going to be published.

4. No ‘subsidiary’ rights.  In terms of publishing agreements and licensing of rights, you should assert that full e-book royalties are a primary right, alongside standard royalties for print books. They are not ‘subsidiary’ rights. Not a kind of ‘sub-license’.

5. Territorial rights.  If your publisher contracts for a print book and also wants world rights for an e-book, ask them why, and how exactly they intend to stage publication so as to exploit these rights to your advantage.

6. Seek advice from someone who will put your commercial interests first.