Tuesday, May 10, 2011

What about EBooks revenues repartition ?

In the previous post, I concluded that "readership" would greatly grow with the "advent" of ebooks. But how could that translate into authors revenue ?
First thing, the presentations : On my left side, we have readers, wanting to spend time, and money on books for reading. On right side, we have sellers : publishers(indie or traditional), authors and distributors wanting to make money from it. First of course, publishers choose at which price they set the books, and readers choose to buy or not. If the books are priced too high, readers will be reluctant to spend the money, and hence will limit their spendings. If on the other side the books are priced too low, readers will not be limited by the financial aspect, but by their time constraints hence lost money for the sellers.
So sellers have to price wisely their books, as to reach the best revenue. And yes, the "best price" for different books may be vastly different, while it also may fluctuate in time ...

As "readership" augments, it is clear that total "money" on the table will also augment, but what about the author's cut of that pie ?
First thing, authors are finding out that -- under old style contracts -- traditional publishers get a percentage for work they don't need to do anymore for ebooks. At the same time, they discover that they now have the choice of self-publishing, new works, as well as back-listed books. It seems the "final reseller's" percentage (the last 30%) are mostly there to stay, be it through Amazon, Kobo, or Smashwords.But yes, these companies meet a demand of presentation, distribution, customer's service, reviews and ratings sharing etc. While direct sells from authors website are possible, they are far from the majority, so I think that for a majority, this "part" won't change. However, the rest is devided between the publisher and the authors (for self-publishers that's the same person). By allowing authors to "short cut" the traditional publishers, ebook give more power to authors who will be able to rebalance the "standard" royalties rate from 15% to a much higher value. Of course, self-publishers will stay at 35%-70%, but my take is that for new traditionally published contracts 35% will be reached in a near future.
That means at least twice as much money for the authors (as a group).

As for individual writers, that's an other matter. For now, indie authors are having great days, as Traditional Publishers leave a big part of the field open, by trying to limit the DTB's erosion and pricing their books too high, but they may start to understand the new rules, and compete truly with self-publishers. However, I don't think they'll be able to regain control of the market as before, and that as customers become more and more conscious of the alternatives, (through authors re-publishing their backlist, or jumping ship allready), they will find their "power" dissolve, and finally limit itself to that of providing "a la carte" services regarding editing, covers, marketing etc...

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