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Amazon price capitulation good for authors
February 1, 2010 | 10:40 am
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By Paul Biba
It is easy to think that there are only two main constituencies in this ebook pricing war – publishers and readers. But there are the authors too.
Richard Curtis points out that the increased price of ebooks will help authors. Currently most publishers pay a royalty of 25% of net receipts on ebooks. Macmillan actually is the lowest payer with a royalty of only 20%.
Curtis points out that as the prices of ebooks rise it will be harder and harder for companies such as Macmillan to maintain lower than “standard” royalties, and it may even help in raising the standard in the future.
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I don’t think this is even slightly true. Amazon is going to be paying major publishers LESS money under the system Macmillan forced on them, not more. Currently, they pay half the print book’s list price, which typically far exceeds the $9.99 they charge customers. Under the new “agency model,” Amazon will pay 70% of $12.99 or $14.99 (under $10.50 at the high end). It’s a net loss for authors, without even counting Macmillan’s royalty reduction on ebooks.
And who will lose, as Aaron said in another post, is the consumer, who will experience a sharp rise in price, therefore buying less. Which in turn will slow down ebook acceptance. Just slow down, though, only slow down. The road is marked, I believe.
Good heavens, Paul. Why would it be easy to forget that authors have a stake here too?