norman_spinradRenowned SF author Norman Spinrad, two-time President of the SFWA, has a guest post on the SFWA’s blog proposing “a viable and just business model for the ebook age.”

Spinrad sees the current turmoil as being a result of multiple parties each working toward its own benefit at the possible expense of all the others. Tension between writers, publishers, and traditional retailers threatens possible havoc in the market, as in the case of physical retailers slowly but surely being driven toward bankruptcy.

Up to a point greed drives upwards and onwards. But when greeds collide, it’s feeding frenzy in the shark pond unless the players realize that any stable order has to have survival value for the collectivity in question, that null sum games eventually destroy themselves. Which is as good a case for the evolutionary practicality of economic justice as anything fancier ponied up by Karl Marx.

Spinrad brings up the 70%-royalty self-publishing market in Amazon versus the 25% royalty standard publishing contract as an example of such greed: publishers are taking a pretty hefty bite out of e-book revenues in return for doing not much at all.

When it comes to ebooks, once the marketing copies are uploaded to Amazon, Barnes & Noble, and so forth, there are no production costs. No printing and binding costs, no shipping or warehousing costs, no returns, nada. The publisher collects 70% of the cover price, not what in the paper world would be 40% or 50% after the author’s royalties and the discount to retailers. After the set-up of the online sales points, which costs virtually nothing but some computer time and hassle, it’s all pure profit, and everything stays in cyber print forever.

He goes on to plug some numbers in and do some math, and basically concludes that, for best-selling authors with name-recognition, self-publishing will become the way to go, both to earn more money on what you sell and to keep rights to your books (since many publishers’ contracts now define “in print” for purposes of rights reversion clauses as “being available for sale in any form”). And even midlist writers can be lured away.

Spinrad suggests that, in order to keep writers from jumping ship, publishers should raise their e-book royalty rates to 50%, meeting writers in the middle and taking a fairer share of the proceeds—and should also “remember what the job of being a publisher once was and of necessity return to doing it,” giving editors the level of say into book production decisions that they used to have before everything began to be sacrificed to “the sacred bottom line.”

50% of all ebook proceeds, advances up front as before, and some sales floor under which ebook publication no longer counts as “in print.” And who knows, some writers who come up to best sellerdom through this more just system might just feel the sense of loyalty presently in short supply between writers and publishers and stick around for the paper volume rights at least.

If publishers don’t adapt this sort of model, Spinrad suggests, self-publishing is going to eat their lunch in days to come when e-books take a much bigger chunk out of the publishing market than they do now.

3 COMMENTS

  1. I understood that the ebook proceeds are based on NET and pbook proceeds are based on Gross. With agency pricing isn’t it 25% of the 70% that’s left after the “agent” takes 30%? I believe that what he’s asking for is 50% of the 70% or 35% of the sale price. Splitting the pie three ways seems fair to me.

  2. If I were managing a Publishing business I would never apply a flat rate to royalties for my writers. Every writer is a different and distinct product channel, with very different and distinct characteristics, risks, advance costs and potential earnings.
    The balance between advances (loans) and royalty is also a critical risk balance that needs to be assessed according to each writer’s track record.
    Having said that it seems obvious that this daft 25% thing must be on it’s last legs. Not just because of it’s low level, but also because of the way it is calculated.

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