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Friday, June 21, 2013

Digitally Speaking: Why Writers Should Self-Publish Rather than Use a Digital Publisher

E-Writers better off
to go it alone
Simply stated, when a publisher digitally publishes a book vs. hardcover publishing, his profit margin per book actually goes up; but, guess what? The author's royalty per book goes down :(

This begs the question: should authors get a higher eBook royalty rate?

Check out the table below for a detailed financial analysis revealing publishing profit margin between the two book formats:

Note: The third column reflects the e-book agency pricing mode.

"This chart illustrates very clearly something that agents have been arguing for several years now, and that publishers have been saying just isn’t true: that their savings on printing, binding and distribution make up for the lower revenue from lower e-book prices– and that increased profitability is coming entirely off the backs of authors." Brian DeFiore

One interesting point to note is that if an e-book author self-publishes his take is the entire 70% of the unit book price ($10.49 in above sample). 

Writers just can't seem to trust publishers - even when publishers go to e-books, they are still trying to screw with the writers.

Do Authors Deserve a Higher eBook Royalty Rate?

Publishers Marketplace covered an “investor day” report at News Corp. (subscription only link) where investors got a closer look at the profit margin for digital books at HarperCollins.
Over at the AARdvark blog, DeFiore and Company founder Brian DeFiore shared the most important stats (chart embedded above): a “$27.99 hardcover generates $5.67 profit to publisher and $4.20 royalty to author” and a “$14.99 agency priced e-book generates $7.87 profit to publisher and $2.62 royalty to author.”
We have all heard the additional argument: that for a very large percentage of authors this is irrelevant since their advances don’t earn out– effectively raising their per unit royalty. That may be true, but it logically leads to what seems to me the most unfair aspect of all: That, therefore, the only authors that are financially punished by this system are the ones whose books perform very well. The ones whose books earn out. The big name authors and the celebrities whose books don’t perform to expectation are untouched; the author who gets a reasonable advance and whose book sells much better than expected are the ones who suffer the greatest loss.
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