E-Book Royalties: Agents vs. Publishers

Agents and publishers have very different ideas about what royalties for eBooks should be. Agents think that 50% is a fair royalty, while publishers think that 25% is a fair royalty. This finding is according to research from Mike Shatzkin, CEO of the Idea Logical Company and Constance Sayre, principal at Market Partners International. The two presented their survey at the Digital Book World conference yesterday afternoon. Despite the discrepancy, a third of agents claim to have negotiated deals for 50% royalty rates. According to Sayre, a few years ago Random House was offering a 50% royalty rate which may have influenced these numbers.

According to their survey, half of agents think the overall impact of eBooks is favorable for authors on backlist titles and 25% think eBooks are favorable for new books. Publishers aren’t so sure and have yet to answer the question.

Interestingly, 2/3 of agents think that a non-compete clause would not prevent them from doing an eBook outside of a contract. Publishers disagree. “But they are not interested in turning this into a fight, they’d rather negotiate than sue,” said Shatzkin.

The study also found that 90% of agents have author clients who have expressed interest in self-publishing, but publishers aren’t scared. “Publishers don’t think authors want to do the work themselves and they think they have the edge because they have the advance,” said Shatzkin. “Print is still heartiest sales and self-publishing is not good for print.”

I find it interesting that "publishers aren't scared" about authors self-publishing. Maybe that's just big talk and they're actually terrified. An advance is always nice, yes, but the larger the advance, the less chance the author will ever see royalties. In fact, most publishers are making their advances pretty modest these days. So 50% royalties on e-books? I do like the sound of that. 25%? No so much. Because 25% on a high-priced e-book isn't going to make you hardly anything; even 50% on a high-priced e-book isn't going to make you a lot if the sales aren't there. It's looking like authors and publishers may be headed toward an ultimate showdown. The question is, who is who in this clip: