A few great Publisher vs Author vs eBook articles

There’s a certain beauty in the passage of an industry from a state of comfortable inertia to a scene of frenzied and varied attempts for control and then to a tranquil new state that is completely different and yet similar in calmness to the equilibrium of old.

The catch with the current Books to eBooks transition is that we might never leave the frenzy and chaos that is beginning to engulf all of Publishing.

There are some very good articles about Publishing, Publishers vs Authors, and the transition in books out this week. The one common thread is an underlying thread that we will reach a state of sanity. They completely miss out on the fact that the current transition may never exit its current state – Publishing may get stuck in perpetual chaos.

Evan Schnittman on Publishers vs Greedy Authors

It’s a joy to see posts appearing regularly on this blog again and the current post explaining why 50% royalties for ebooks doesn’t make sense makes a lot of sense.

He points out that authors seem to feel that a 50-50 split on ebooks is reasonable because there are few incremental costs in producing ebooks. He then points out, and this is a master-stroke in the way he puts it, that ebooks are competing with print books for readers –

ebooks are competing with print books for readers .

Ebooks aren’t a secondary or tertiary income stream for publishers like subsidiary rights; ebook income replaces hardcover and/or paperback income.That’s right, ebook income replaces print income. 

So if the hardcover is out at $30 ($15 net after 50% reseller discount) and the ebook is available through an agency model at $15 ($10.50 net of agency 30% commission), the publisher is earning $4.50 less for every ebook purchased instead of the print book.

This is a beautiful and valid argument. Except for the little wrinkle that it’s within the confines of a beautifully decorated and endlessly limiting box – the box of Publishers are necessary to publishing (the next article we cover discusses this).

He ends with this intelligent but Publisher-serving argument for why ebook and book rights should be sold together and at something close to the earlier 10% or so royalty rate –

Divide and conquer is a very dangerous game as it tries to create the greatest short-term value for a work by selling off the sum of the individual rights. However, a book’s value is a very gestalt concept.

The whole work has FAR greater value than the sum of the individual rights. Allowing each individual part, or right, to be disaggregated and auctioned to the highest bidder serves only those who make profit from short-term gain.

You do have to acknowledge the basic truth – As its currently structured Publishing cannot support 50% for ebook rights if the market share of ebooks keeps increasing. You also have to acknowledge another truth (one that Publishers are hiding from) – the inevitability that Publishers’ share and the role they play will decline. There will be new Publishers like Open Road that thrive in this environment (more on them later).

What value do Publishers provide?

The Profitable Publisher posts on what authors get from PublishersMoney, distribution, time, and quality.

  1. Money – Authors don’t risk their money and Publishers put up a solid amount of money. A very valid point.  
  2. Distribution – Authors can’t get anything like the distribution Publishing Houses can. This is a good argument that gets weaker as we move towards ebooks. Now, it’ll be more about convenience rather than getting a spot – Since anyone can get a spot in Amazon’s Kindle Store or in the iBookstore.
  3. Time – There are elements of domain expertise and core competence here (both listed in the next list). Basically, the argument is perhaps the strongest and says that authors are better off writing and letting Publishers do publishing – which publishers specialize in and which authors would need a lot of time to figure out.
  4. Quality – This is mostly talking about the finish of the book and it’s a good argument presented poorly. A much better way to explain it would be to put an excellent book cover against a rough one and ask the reader which one they think would get picked up first and which one might never get picked. Add on the fact that a Publisher would ensure users get the chance to look at the book in stores, airports, libraries, and a hundred other stores and you have a very strong argument.  

Here are a few things the post misses – Things that Publishers provide and can be crucial for authors.  

  1. Improves your odds in return for a lower share in profits. Truthfully, for your first 1 or 2 books it’s OK to make just 10% as long as you get the very best odds of succeeding. If a Publisher provides this then go for it. If self-publishing provides this then go for that. It’s the gatekeeping aspect of Publishing that’s a problem i.e. if Publishers don’t choose you don’t get a shot. If you do get through the gate then Publishers might be your best chance at succeeding.
  2. A partial success before actually selling books to readers. It also alleviates the fear of getting nothing for all your effort.
  3. A stamp of being a Published Author – with both personal and branding benefits. It’s great for people’s confidence and it really helps sell yourself down the line.
  4. Belief – It’s a pretty big victory to get a team and in particular to get a team that specializes in books to back you up.
  5. Convenience – The path of least resistance for most authors is to let people do things they are too lazy to do or too scared of.
  6. Core Competence – Authors can focus on what they do best.
  7. Domain expertise – 50 years of experience and 200 bestsellers versus an author who has never published a book. Why mess up your excellent and perhaps only shot at success by compromising on domain expertise?

Publishers are going to be needed in the New Publishing World – It’s just that they are mistaking how much of their importance and power will translate. In a way they are overemphasizing things that won’t survive the transition (gatekeeping, majority of profits, power, traditional way of doing things) and underestimating the importance of things that will (domain expertise, letting authors focus on writing, moral support and survival support, scale, convenience, human nature).

Authors in Australia aim for 35%

Paul Biba at TeleRead talks about Australian authors finally waking up to eBooks and asking for 35% royalties. There’s a letter from the ASA (Australian Society of Authors) –

Right now Australian publishers are offering authors new contracts – or asking them to sign addendums to existing contracts – that pay only 7% to 25% royalties on e-books. That sounds like a lot, but the way online selling works means that it’s a lot less than the standard 10% royalty on a print book.

Angelo Loukakis, the ASA’s executive director, advises local authors of print books that sell as e-books with a list price between US$10 and US$20 to aim for a minimum e-book royalty of 35% of what the publisher receives from the online reseller.

Wonder why they are happy with 35% while in the UK and USA Author associations are recommending 50%?

The post also talks about Borders Australia being ready to release a big ebook store with rights from nearly every Australian publisher and that Amazon and Apple are beginning to work on Publisher deals.

The post thinks that expecting the same dollar amount from ebooks as from paper books is a bit unfair. It then says that physical book prices are falling so authors should get a larger share so they continue to get what they used to. It’s a bit confusing but it seems the combination of falling book prices and the threat of ebooks have combined to make author royalty negotiations very nuanced and important.  

Paul Biba has done an amazing job of keeping Teleread excellent – Frankly, after the departure of David Rothman that seemed highly unlikely but he’s managed it somehow. They also cover the latest move by Open Road which is promising to become a Publishing power house.

Open Road Media making the most of the author-publisher arguments

Publishers need to take a long, hard look at what Open Road Media are doing. They will have to take the same approach to ebook rights at some point of time – They might as well do it now before the Big 6 gets replaced by the Sort-of-Big 26.

Open Road Media will be releasing 10 Iris Murdoch books as ebooks on July 20th (Tuesday – though they are already available as pre-orders at Amazon).

Iris Murdoch (1919–1999) was one of the most influential British writers of the twentieth century. Heavily influenced by existentialist and moral philosophy, Murdoch’s novels were also notable for their rich characters, intellectual depth, and handling of controversial topics such as adultery and incest.

For three decades, Murdoch published a new book almost every year. She was awarded the 1978 Booker Prize for The Sea, The Sea, won the Royal Society Literary Award in 1987, and was made a Dame of the British Empire in 1987 by Queen Elizabeth.

Just recently Open Road Media got the ebook rights for William Styron and published ebook editions of his works. If they keep this up they will be a top level Publisher once the transition to ebooks is done – wish they were on the stock market.

Open Road Media and RosettaBooks and other publishing upstarts might eat up large shares of the market if the Big 6 don’t realize that they have to fundamentally alter their strategy and the way they do business.

5 thoughts on “A few great Publisher vs Author vs eBook articles”

  1. Open Road seems to run by a bunch of smart cookies. There is a real horde of treasure languishing in the used-to-be-a-bestseller box and they have made a great start in securing some of the best for new, switched-on, readers. Bravo!

  2. Would it be acceptable to say then that the practical upshot of all this is that in the transition to ebooks, publishers’ main trump card will be the very thing aspiring authors have always lacked: widespread promotion? Or would it be plausible to suggest that selfpublishers could actually begin to secure a real hold in mass market? …as intriguing as it is foreboding. (posted from my kindle2 btw)

    1. Yes. They still have all the experience and domain expertise and contacts.

      At the same time there are new methods that would come up i.e. social media, getting access to the Kindle Blogs, and so forth. However, that will also very soon get turned into a service provided to authors.

      You’ll be exchanging one very powerful gatekeeper for a far less powerful dominant publishing establishment and lots of companies that specialize in helping authors.

  3. I am a new Kindle reader and I won’t be buying books at the upper levels. If I want to read these books I will go to the library and order them in at no cost.

    I watch for the free or inexpensive ones as I use my Kindle as a means to read in places other than at home and the newness of the book is of no importance to me.

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