Amazon offers Hachette authors 100% royalty
I’ve previously said this:
“Hachette (a publisher) and Amazon (a retailer) are in the midst of a turbulent negotiation. It’s like Godzilla battling Mothra…and unfortunately, in that scenario,we readers are Tokyo.”
Well, there is another group that might be considered collateral damage…authors.
Those aren’t the only ones affected, but let’s focus on that for a minute.
Essentially, fewer Hachette books are probably being sold right now, because they are not as available through Amazon.
Authors traditionally get paid a percentage (called a “royalty”) when a book sells.
It could be a percentage of the purchase price, or a percentage of the list price of the book.
How much of a percentage?
In p-books (paperbooks), a brand name author (Stephen King, Anne Rice) might get 25%, more authors might get 10 to 12%, and it can go down from there.
For e-books, the royalty tends to be higher. Independent authors who go through Amazon get 35% or 70%…the latter if they follow certain guidelines, including the price of the book and participating in Amazon’s special features (like text-to-speech).
In my last post on this:
I wrote about some authors condemning Amazon, and some supporting them.
Well, according to this
Amazon is offering authors a higher royalty while this dispute continues.
Are they going to give these traditionally published authors the same royalty as the indies…35%?
O N E H U N D R E D !
That’s right…Amazon is offering to give the authors every single penny the retailer gets when it sells one of their e-books (published by Hachette).
What’s that dull thumping sound I hear?
Oh, it’s Amazon investors…fainting. 😉
There are costs of sale for Amazon, so they would clearly be losing money on each of those e-books. They have to pay something for maintaining the infrastructure, the administrative cost of collecting sales tax (where they do that), other accounting, providing Customer Service, and so on.
This is getting heated, and public.
has Hachette’s response to the offer (it’s not favorable).
Amazon’s response to that?
I quote in part:
“We call baloney.”
The company that sells
went with a schoolyard epithet. 😉
What do authors think about the offer?
In that same article,
is quoted as saying,
“To take that money would really violate my moral and ethical principle.”
Preston mentions wanting to pay back advances before the author would take any of the millions of dollars this might mean.
Let me explain that part.
One of the big arguments for tradpubs (traditional publishers) is that they pay authors advances.
What that means is that, if they are reasonably sure your book will sell (because you have a solid track record, or are perhaps a celebrity, or they like your topic), they will pay you the royalties first…often before the book is even done being written.
That’s an “advance” on the royalties.
That’s often what enables an author to complete a book.
Let’s say you are a brand name author…you are likely to earn millions in royalties from next book (and the publisher is going to make many times that).
They could give you $100,000 for you to live on for a year to write the book…but you would have to pay them back out of the first sales of the book.
My understanding is that authors are almost never asked to give back an advance even if a book doesn’t sell…but that has happened.
When you publish a book yourself, you don’t get an advance from a publisher.
One new technique is crowdfunding, though.
People pay indie authors in advance for a book…they buy it before it is published.
In exchange, they often get something extra: e-mails from the author, or maybe a special additional short story. There might be a “meet the author” party.
Those early buyers may even pay considerably more than the general public eventually will.
That’s one of the threats to tradpubs.
One thing about which I’m not quite clear.
It sounds like Amazon is proposing that Hachette also give up their part of the book sale in some of the articles I’ve seen…in others, it makes it sound like it is Amazon unilaterally giving up their part.
Obviously, that makes a difference. 🙂
If the book is list priced at $10, we’ll say that Hachette would get $7 of it.
Amazon sells it for $8.
Amazon sends that $8 to the author (under the new proposal).
Do they also send $7 to Hachette?
If they don’t, clearly, Hachette would have to agree…and this letter would put the ball in Hachette’s court.
If they do send the money to Hachette, Amazon directly loses $15 instead of making $1.
Yep…an expensive proposal.
I think there is a lot at stake here.
This could change the landscape.
It might drive authors to do much more independent publishing.
It could cost Amazon a lot of goodwill with the public (although not, apparently, with my readers, based on a poll I did not too long ago).
It could cost Hachette marketshare.
However, on that last point, it’s worth noting that Amazon is going to have to negotiate with the others of the Big 5 publishers. Right now, I’m guessing they may be trying to wait to see what happens with this one. Contracts expire at some point, regardless, so it’s going to happen.
I do find this all quite interesting…but I am looking forward to writing about something else tomorrow! 🙂
What do you think? How will this change the literary landscape…or is it just a bump in the road? Feel free to tell me and my readers what you think by commenting on this post.
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* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. Shop ’til you help! By the way, it’s been interesting lately to see Amazon remind me to “start at AmazonSmile” if I check a link on the original Amazon site. I do buy from AmazonSmile, but I have a lot of stored links I use to check for things.
This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.