Author Questions Royalty Rates on eBooks

There’s an interesting story on the Washington Post website where Pulitzer Prize winning author Michael Chabon discusses the publication of his works as ebooks.  He controls the rights to his earlier works which he has licensed to Open Road Integrated Media.  That entity pays him a 50% royalty rate compared to Random House and HarperCollins who control electronic versions of his later works.  They give him 25%.  As with anyone who understands that electronic editions cost nothing to produce in comparison to print works, he wonders why:

“I agreed to the traditional e-book royalty, which I think is criminally low, because I didn’t really have any legs to stand on. I didn’t want to get left behind in the e-book revolution,” Chabon said recently.

“When it’s comes to royalties on a paper book, that rate (25 percent) is completely fair when you think of the expenses a publisher takes on — the delivery trucks and the factory workers and the distribution chains. But it’s not fair for them to take a roughly identical royalty for an e-book that costs them nothing to produce.”

Neither publishing house would respond to questions.  As Amazon and others court established authors wit better rate deals, the traditional big publishers may find themselves as the farm team to the new major leagues.  It didn’t take some major artists to shun record companies for their own direct Internet marketing opportunities.  The labels had to change with so-called 360 deals for some artists where the labels paid a huge amount up front and got returns from tour and memorabilia sales for the term of the deal.  Authors may not be rock stars, but someone such as Amazon working as an imprint with a different economic model may make life miserable for big publishing at some point.  [MG]