Monday, July 27, 2009

Sharing Digital Revenues

Digital books are not just about ebooks podcasts, online, they are merely the delivery formats. It’s about how we acquire, develop, market, promote and sell rights. We have long argued that ‘digital publishing is publishing’ and the need to look not just at the end format but at all aspects of the life-cycle from the author to the reader. Today we see many grappling with some these wider aspects of digital publishing and an environment, which for many sectors, will have to support both physical and digital side by side for as far as we can envisage.

Last week The Bookseller reported on the issue of royalty rates on ebooks and the apparent impasse that Random have with many in the over their claimed lower rates.

The question is not whether the rate should be ‘x’ or ‘y’, but what is the appropriate model to be adopted today for digital rights and how is it likely to change over time. There are a number of points we should also acknowledge:

First, a royalty deal struck today may not pay out for maybe two years yet in that time the digital market may have shifted significantly. The digital market is not stable and out of the control of any one party. Best intension and what appears a good or fair deal today is vulnerable to outside forces.

Secondly, digital pricing is all over the floor, a true dog’s dinner! Some want to align ebook pricing to the physical, others use them a promotional leaders, others such as Amazon are trying to create a price point independent of RRP. In a world where the net receipts are vulnerable, many will opt for royalties based on them, but for the author a percentage of net can mean a percentage of little.

Thirdly, the new retail entrants are often trading on fixed ‘value share’ terms, so a percentage share on royalty makes sense, but in these cases the percentage should often rise not fall.

What is clear is that we have a timeline issue which means what we know, or can predict today, is almost certain to change tomorrow. This surely demands, that digital rights should be at least revisited on an agreed schedule and not fall into a perpetual licence contract. Should a term time right on digital align to a term time right on physical or even visa versa? In a world of Print and digital on demand some would suggest that rights don’t revert, but given that precise shift surely its time to ensure that licences are term based and not dependant on inventory movements and ‘reprint under consideration’.

We see no real alternative to individual digital licences based on channels and revenues. The alternative could be digital falling into the special sales route where the deal may be more important than the royalty earned by the author. The physical world has different channels and it is fair to envisage the digital one will be no different. However, the channels and revenue models will be different and aligning these to the physical may be at best, unwise.

Finally, we would like to throw in what some may regard as totally inappropriate. In a digital world where stock is effectively on consignment and every sale is a real cash generating sale why not pay the author their royalty in real time? Some will argue that advances etc need to be covered before royalty trip in but should that apply to digital and is it so sacrosanct?


Anonymous said...

The entire publishing model is slipping through the fingers of those who have controlled it for so long and ultimately caused it's demise.
Now authors are finding alternatives where they do not have to get the greedy bastards involved who have dictated how much an author can earn, if anything, where their work is sold and to whom.
Now an author can go it alone and have a chance of earning a living through their effort and hard work. 'The industry' is desperate to retain some sort of regulation/strangle-hold on those who have for far too long given it it's living. Well it's all changing. Good bye the old ways, welcome in the new.

Martyn Daniels said...

we unfortunely can't edit words so the deemed profanity in the comment stands as given.