davefreer ([info]davefreer) wrote,
@ 2009-07-02 17:56:00
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e-books and royalties.
It appears the tree of greed and short-sighted insanity is well watered right around the world. Here we have car prices going UP - an average of 11.3 % I believe as sales fall throught the floor. Or as for e-books (http://www.ereads.com/2008/10/random-house-changes-e-book-royalty.html). Sigh. Firstly as demand is increasing, it means you can bring your prices down, secondly, as some of the major expenses - namely, printing, paper, warehousing, physical distribution and RETURNS - are not a factor. Costs actually compare VERY favorably to the costs for other media, and therefore the rates of payment to authors and costs to public could both be very much improved. Fortunately Baen so far anyway have no part in this, and I hope they keep it that way. They pay a better % too.

The shortsighted result of this is very obvious -- already established well-known authors are thinking... well, they could really do this without the publisher. Instead of accepting 12.5% and falling... they could have 50% and pay some editor to work for hire and pay a cover artist (and get to CHOOSE their cover art), and get off-site storage for next to nothing, and probably come out with say 45% of the take. The next move I predict from publishers is going to some form of 'only we have the rights to sell your e-books in perpetuity', especially aimed at smaller authors and newbies who are in a poor position to resist. I hope we get some form of authors' collectives next to cut retail and advertising costs.

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[info]reverancepavane
2009-07-04 01:13 am UTC (link)

It's interesting to note that the 30% fee charged by One Book Shelf (http://www.drivethrurpg.com and derivatives) is already starting to push a number RPG publishers into doing it themselves (using Plimus and similiar e-commerce systems), despite OBS being the "Amazon" of the RPG e-book industry.

It seems to be a natural evolution. And with the small "gene-pool" and embedded-niche of the RPG industry, we are seeing the results of the new media far faster than in mainstream publishing. With the ready availability of short-run and on-demand printing for small physical print runs, the collapse of the traditional distribution and retailing channels made moving into electronic publication a no-brainer for most companies (and a large number of enterprising amateurs*).

Readers/collectors remain informed by a corresponding growth of electronic fan and review sites, as well as publisher blogs. It seems to be working, although it will be interesting to see what the results of Wizards of the Coast/Hasbro removing D&D from the electronic arena (for the stated reason of rampant piracy); a lot of people found having electronic copies of the rules very convenient.**

* Used in the sense of "someone who does it for the love of it" rather than simply as a job. Many amateurs in the field are more professional than the professionals. Then again, I don't think anyone is going to become rich working in the non-electronic gaming industry.

** Although truth to tell, WoTC seems to be suffering the malaise of the record companies and wondering why all these other companies were able to spring up in their wake and grab the money that should rightfully be theirs. Again, it's an attempt to try an maintain an income stream in the face of new media using old policies, rather than attempting to exploit the opportunities that it provides. Their competitors, born after the paradigm shift of the web, were able to do so far more effectively. Unfortunately the reactive flailing of the dinosaur hind-brain is, I believe, going to cost them a lot of inertia (it's already damaged many of the relationships they were hoping to foster).



Edited at 2009-07-04 01:14 am UTC

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[info]davefreer
2009-07-04 08:34 am UTC (link)
My feeling is there is a balance between author hassle-factor and profit that they have to get right. At a guess, to make much the same profit as they do now, and be acceptable to the authors, that's going to be a royalty of around 30-35% on a book being retailed by someone else, selling say 10K, at $5. The effective 12.5% Random house is proposing there is... well, sure to lose them all their best selling authors, as soon as e-books get to 1/3 of sales. Of course the bigger the numbers or the less paid for retail space, the bigger that royalty needs to be. Retail's percentage probably needs to come down too, as storage and shipping costs are VERY much lower for e-books. Possibly the answer simply moving publishers off paying authors royalties entirely, and them accepting a flat basic cut (to cover the costs), and a percentage of the gross thereafter. ie, Authors paying publishers a work-for-hire fee with a royalty cheque for them afterwards remoming the risk for publishers, but as a result cutting the percentage they can earn.

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[info]newjerseybadger
2009-07-04 01:49 am UTC (link)
I've wondered for a while now, why small-sale authors don't hire editors for a percentage of the gross, then publish on Lulu or something similar. Or contract with small-run shops like NESFA Press for the printing and shipping. I don't pretend to understand the infrastructure and cost accruals involved, though, so I've mostly kept my yap shut. The Webscriptions/Lulu models seem so obvious that it mystifies me why everybody isn't doing it.

Dave, keep us up to date on where this takes you. And consider Lulu? I prefer buying Webscriptions but I'll take a flyer on hardcopy if you decide to go to a print-on-demand for something that doesn't get picked up by a publisher.

--Phil

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[info]davefreer
2009-07-04 08:10 am UTC (link)
Phil -all that's holding back the dam right now is the exposure issue. Realistically only medium/larger publishers can get your book into retail display space and keep it there. Lulu or Amazon or any other online bookstore that attracts a lot of traffic can't really do the browse and display bit yet. However, when you get to 1/3 + of your sales happening outside of traditional brick and mortar stores - where the author is going to get 8% of the gross - if the author is able to keep that 1/3 of the market without being in brick and mortar, and get 24% or more of the gross (with that number dropping the more of their audience they can take along) the more likely it gets. Once again, it doesn't take a rocket scientist to figure that this really applies to the top edge of he industry, with a well established publisher independent web-presence. Scalzi, Doctorow, Stross spring to mind, although quite a few others - Eric for eg, could do it. I'm not, personally or immediately thinking of doing anything (yes I have some stuff I can't sell). But I will do my best to let everyone know if it happens.

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[info]qbzzt
2009-07-05 01:28 pm UTC (link)
The problem with e-publishing is that it is too easy. As a result, there's no filter. I would you know if you're buying "The Forlorn" by a new author called Dave Freer, or "The Book of Meh" by a wannabe called Ori Pomerantz?

Until enough readers are networked in a way that lets them share recommendations for their favorite sub-genre, we'll need publishers to provide this initial filter.

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[info]davefreer
2009-07-05 01:35 pm UTC (link)
(grin) as a title, The Book of Meh is enough to get me curious enough to pre-order. You're right Ori. That's why it will only work with reasonably established authors, unless some other 'filter' comes along.

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[info]cordova829
2009-07-05 04:41 pm UTC (link)
The short-sightedness you mentioned also brought about the near collapse of the RIAA. It's also why current MBA students in America helped bring about the economic collapse. Short sighted and only interested in the now, and not concerned about the future performance. It's why I am not a fan of quarterly reports dictating the markets.

Oh, and I posted a link to this from my website Dave. More publicity for you.

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[info]davefreer
2009-07-05 05:05 pm UTC (link)
Thanks. The RIAA idiocy is what they should be using as a grim example in MBA courses. And the should make all them read and show comprension of BOTH of Adam Smith's books. (I have always regarded The Theory of Moral Sentiments as more important and fundamental to An Inquiry into the Nature and Causes of the Wealth of Nations - although most people only know of the second book and somehow conclude that it said greed was good and that it undpinned capitalism - which is bizarre to put it mildly - parts of the book are considered fundemental to the theory of free markets, but Karl Marx also drew extensively from it.)

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Adam Smith
[info]seaboe
2009-07-06 05:13 pm UTC (link)
Did you know that Steven Brust is reading The Wealth of Nations and analyzing it sporadically on his blog? The site is the Dream Cafe.

Seaboe

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Re: Adam Smith
[info]davefreer
2009-07-06 05:44 pm UTC (link)
I'd recommend the first book first. The language is like wading through soup, but one thing that stuck out to me was that Smith was a keen observer of reality, and drew from that. People tend to assume he wass being prescriptive, whereas actually he was descriptive (he was saying people should be serving self-interest - he said people did, and you could make that work to economic advantage. I don't agree with everything he concluded, but enlightened self-interest (where that self interest is shaped by society's mirror - which in turn can be shaped) should be the most long term workable and successful of systems.

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