Back in 2009, e-books accounted for only about 3-5 percent of book sales, so a 25 percent royalty didn’t have as much impact on an author’s earnings. Today, e-books represent 25-30 percent of all adult trade book sales, but the e-book royalty has remained the same for most traditionally published writers.
The Authors Guild, which called the practice unfair, has launched an initiative seeking 50 percent e-book royalty for all traditional authors. The organization’s Fair Contract Initiative is meant to advocate for contractual balance. It said that historically, the author-publisher partnership was equal, with authors earning 50 percent of their books’ profits through a 15 percent royalty of hardcover list price and 50 percent split of publisher’s earnings of paperback, book club, and reprint rights. Authors also generally received a larger share of profits from non-print rights (stage and screen rights) and foreign rights.
The guild called the traditional author-publisher relationship a joint venture. The author writes the book, while the publisher invests in it by providing an advance and support services (editing, marketing, packaging, sales and distribution). “This worked well enough throughout much of the twentieth century: publishers prospered and authors had a decent shot at earning a living,” said the Authors Guild on its Web site.
E-Book Royalty Evolution
From the mid-1990s until about 2004, e-book royalties ranged from less than 10 percent of net receipts to 50 percent. When Random House cut its 50 percent rate substantially, other publishers followed. “By 2010 it was clear that publishers had successfully tipped the scales on the longstanding partnership between author and publisher to achieve a 75-25 percent in their favor,” the group said.
In an article published on the Authors Guild’s Web site, the group used as examples a number of best-selling books to demonstrate their authors’ e-book losses. For example, Kathryn Stockett’s e-book royalty for “The Help” shows a 39 percent loss compared with a 33 percent gain for her publisher.
You can read the Authors Guild’s article, “Half of Net Proceeds is the Fair Royalty Rate for E-Books,” here.
Full disclosure: I’m a member of the Authors Guild.