E-books are just getting bigger and bigger. Last week it was reported that the New York Times will be adding e-books to its bestseller list. How exactly the Times plans to collect this data, I'm not 100% certain, but it'll be interesting to see. What will be even more interesting to see is whether the list will, at some point, include self-published titles. A few days ago The Washington Post did a very short piece by Andrew Schneider on just what it costs for a bestselling e-book. In fact, here's the entire thing:
Contrary to popular belief, the costs of creating an e-book and a hardcover edition are similar. About 10 percent of hardcover costs go to printing, binding and shipping. Publishers set a retail price for an e-book, and selling agents such as Amazon.com and Apple receive a flat percentage of that retail price. These estimates are based on sales of 75,000. Expenses for a book include one-time costs such as editing and marketing. Many e-books lose money for publishers; e-books that sell millions of copies offset losses from less popular books.
Interesting, no? But if this is the case, then how did Amazon get away with that $9.99 price point for so long? Because Amazon was losing money on every e-book it sold. Why? To sell more Kindles.
Last week the Authors Guild published a piece on e-book royalties for major publishers and what authors earn/lose with hardcover sales and e-book sales. It's definitely worth reading.
Back when Amazon began to offer that 70% royalty on e-books priced between $2.99 and $9.99, I had assumed it was their way of trying to sweeten the deal for major publishers to keep their e-book prices somewhat reasonable. People get upset when a brand new e-book is priced at $12.99, but oftentimes that's practically 50% off the hardcover retail price, so it's strange that they would become so enraged. The reason is because Amazon has drilled it into everybody's head that the standard price for new e-books should be nothing more than $9.99. And with this 70% royalty, then the publisher is making about $7 per unit. And if that's the case, they still think the standard royalty should be 25%! So they must be pretty greedy, right?
Actually, the answer turns out not to be so simple. I'd always assumed the 70% royalties were offered to the major publishers, but from a few conversations I had this past weekend at AWP, that doesn't seem to be the case. Apple's iBookstore offers that to the major publishers (or around that percentage, I think), but not Amazon. I don't know at what level a publisher has to be to not qualify for that 70% royalty. Do small press publishers qualify? Probably. Do self-published authors qualify? Absolutely! After all, it's Amazon's mission to try to steal as many authors away from publishers as it can. And as you've heard countlessly from many writers around the Internet, why not?
So what does this all mean in the end? I don't really know. But obviously things are never what they seem, especially with this evolution of e-books. So self-publish or publish with a traditional publisher -- every case is going to be different. You can't base your decisions on the success (or failure) of others. All you can do in the end is look at all the facts presented and do what you feel is best for you.