The news today from Richard Curtis’s eReads blog, ‘S&S Follows Random in Reduction of E-Book Royalties’, may have raised some eyebrows. We wondered how the news may be broken to agents and authors. The letter below is purely fictious and is not representative of any letter that may have, or may be sent.
We are all excited about the potential opportunities that digitisation offers the book trade and although sales today are relatively small, we are convinced that through our astute business negotiation we are building digital business models and distribution channels, that will ensure that we get our due return on our huge investments.
As you know we are investing huge sums of money in our digital programs and when we finally get round to digitising the total publishing process this will make us more productive and lower our cost base. We will also be able to digitally promote your works so benefiting all.
We realise that you enjoy bookshop library visits and signings, so we are pleased that these will continue for the physical books. Obviously, many small independents will not be able to sell digital copies and ebooks can hardly be signed, so we are therefore focusing on all the big aggregators, Amazon and of course the new breed of booksellers, Google, Sony etc. These will obvious sell lots of stock, albeit at maximum discount.
You may be aware that some major publishers have just announced, (Simon & Schuster and Random House), that they are unilaterally switching to a 25% royalty on net receipts on digital and audio download sales. This obviously is a greater % for you and everyone benefits. Some would suggest, today's list price has to be inflated to accommodate the increase in discounts being demand by many resellers, but in our case it clearly is not so. We also believe that the digital recommended price should reflect the current edition. This would align the recommended price to that of the hardcover when that is out and the paperback when that comes out. We realise that the consumer may be a bit confused as to why the price of for the same title, in the same digital format, with the exactly the same content, is the same, but they will get to understand its down to marketing and selling it at premium and then discounting it later. We are convinced the big resellers will understand. You may wonder what happens in Europe with VAT and how the recently announced potential drop in tax due on digital copies will affect the price. Many of us today merely deduct the tax of the list and stand this, so any reduction will benefit both of us as we will keep the price the same.
We were sorry that we upset you when we tried to take away the right reversal clause in your contract, but we have help shape and support the historic Google settlement that among other things sorts the problem out and also mops up all those poor lost orphan works. We realise that you may be also wondering about the Google settlement and how it will effect you and why Google is paying a different rate on sales and how they derive the price of your old books that are no longer in print. Don’t worry we will as ever, support your best interests and reflect this in your royalty statement.
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