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Current platforms offering as much as 70% to Authors is great and them letting anyone publish books is even better.

We’ve seen a jump from 8-15% royalties to 70% royalties and from publishing a book (and getting it to readers) being really difficult to being quite straightforward – All in 2 short years.

You could attribute it to a variety of reasons –

The Internet, eReaders, eBooks, the Kindle, Sony, Competition from Nook, Threat of competition from the iPad.

However, before going into that it’s worth wondering why authors seem to be blind to the 70% option. 

Why are authors still happy to get 15% or 25%?

The majority of published authors are happily ambling along with a royalty rate from decades ago.

What makes authors so amenable to being exploited?

1. Developers get 70% from Apple and still complain that Apple takes weeks to review their apps.
2. Bloggers complain non-stop that their blog (which is free on the Internet) sells for $1 and they only see 30 cents.
3. Sellers on eBay complain about the listing fees and the miniscule commissions eBay gets.
4. Meanwhile authors happily take 15% (or 25% for ebooks) and thank their lucky stars.

Perhaps it’s a function of being used to 10% royalties for so long. Perhaps its inertia.

How essential are Publishers now?

At some level authors have to be seeing the changes around them – What do they need Publishers for?

1. Publishers are no longer gatekeepers. 
2. You can set-up your own website and sell directly to readers.
3. You can sell in the Kindle Store and the App Store and perhaps in the iBooks Store.
4. Print on Demand is making it more and more possible to print and sell books on your own.  
5. eReaders are exploding and readers are coming online to search for books.  
6. You can use Twitter and Facebook and Forums and social media to reach readers. 
7. You can start your own blog and have an ongoing discussion with your readers.

What’s left are three key elements -

1. Financing authors.
2. Book creation expertise.
3. Book marketing expertise and budget.

Publishers can add a lot here – However, is that amount of value worth them getting all the control and giving authors just 15 to 25%?

eReaders and eBooks have made 90% revenue-share a possibility

Two of the biggest reasons Publishers have lost their power are eReaders and eBooks.

1. eBooks take away the advantage Publishers have with physical distribution, retailer tie-up, and so forth. 
2. Publishers’ economies of scale become much less relevant.
3. eBooks greatly reduce the amount of risk involved in bringing books to market - negating probably the biggest contribution of Publishers.
4. eReaders create a direct channel to the reader – a direct channel that Publishers do not control. 
5. eReaders allow for getting books instantly and from anywhere – weakening stores and distributors.
6. eReaders let authors reach readers instantly and cheaply.

These changes transfer more and more power from Publishers to readers and the platform companies.

Only three relevant parties – authors, readers, and enabling platform

If we can figure out a way to spread out the marketing, financing, and book expertise between authors and the platform we can eliminate Publishers completely.

Think about it -

1. The writer who reads the book. 
2. The platform that enables the book to be sold to readers (including informing them it exists and book recommendations).
3. The reader who reads the book. 

That’s really all we need.

At the moment that’s exactly what’s happening with indie authors. There is currently nothing except the book platform between indie authors and readers.

How much should the platform get?

The current 30% is fine. Books are a $25 billion business just in the US. If we assume books are a $50 billion business worldwide that means -

1. Once eBooks reach 50% penetration, companies that are the platform for eBooks will be earning $15 billion a year.
2. The competition will be brutal and it’ll force companies to offer more and more services for less and less of a cut.
3. We’ll hit a stage where the platform offers just 10%.
4. 10% seems low until you realize that 10% is still $5 billion a year.

The promise of that $5 billion to $15 billion a year is why Apple, Google, and lots of other companies are jumping in.

Are Authors scared to accept they could be getting 90%?

Are there reasons Authors are scared to accept they could be getting 70% or 90% of book sales?

1. Quite honestly, it seems a bit too good to be true. Going from 8-15% to 70% is literally getting your salary quadrupled. 
2. It’s all very sudden.
3. Most authors are familiar with a world where they had very little power and consequently very little share of revenue. It’s a drastic change that a company lets you publish without restrictions and also gives you 70% of revenue.
4. Perhaps authors don’t want that much money – Perhaps there’s some artistic handicap that prevents them from thinking commercially and accepting they should be making money.

Not sure why it is but Authors seem really reluctant to ask for a larger share of profits.

What about Publishers – are Authors scared to lose Publishers?

Are there good reasons Authors would still want Publishers?

1. The Prestige of getting Published. 
2. All the help and hand-holding. 
3. Letting Publishers focus on the non-writing parts of a Book.
4. Having someone to blame if their book doesn’t succeed.
5. Having a partial prize (getting the book published) if their book doesn’t become a bestseller.
6. The advance and the financial stability that provides. 

Publishers take care of a lot of things authors don’t want to bother with or are wary of.

Perhaps there’s a 10% share for Publishers in addition to a 10% share for the platform.

Are Authors simply overwhelmed?

Eventually there will be brutal competition and earnings will come down. However, there will be a transition period where authors will be earning 3 or 4 times what they were earning in the past.

That’s one heck of concept to grasp. Imagine finding out tomorrow that your salary is 4 times.

That might help explain why authors are happily accepting 15% and 25% when they could be getting 70%.

Filed under: books Tagged: | 70% royalties, reality for authors