Royalties: Less Pomp Better Circumstances
Last April, when Hachette and Amazon.co.uk were having a battle of wills, Mike Shatzkin wrote a post at PersonaNonData regarding Amazon’s threat to use the publishers’ direct-to-customer price as their MSRP, applying its trading terms to that.
Shatkin warned the issue would be a flash point in the future. In the comments, literary agent Richard Curtis, said this would likely lead to publishers driving prices upwards.
Now consider digital goods. It makes tons of sense for publishers to sell ebooks direct. But Amazon is not fooling around either.
As a consumer I want ebooks to be available from as many places as possible. The music industry can teach us why exclusive distribution deals are bad. But will publisher/Amazon competition mean a downward pressure on prices — a race to the bottom? Will publishers hike prices as Curtis suggests? Or will publishers keep prices the same and simply squeeze the authors for more margin?
Hmmm.
Last week Random House changed its royalty structure on digital sales. The author royalty is applied to the amount received from the sale. The price of an ebook is now a floating point in space. Random House is free to manipulate that price to the greatest benefit to its bottom line. As a customer I would worry about inflated prices. If I was an author, I would be worried about my sales volume. Digital revenues will not replace revenue from traditional sales. Is Random House going to price my ebook to sell or are they going to price my ebook to protect their margins? I am not sure.
Curtis originally posted on the topic at ereads.com. Kassia Krozser submitted her thoughts on the royalty announcement on her Booksquare blog. Now Soft Skull’s Richard Nash is making me reconsider everything in his comments to Kassia’s post. In Richard’s words “we’re all feeling our way forward a little…”
[image]
No Comments Yet