E-Publishing Opens New Roads and pays Higher Royalty Rates to Writers

There can be no doubt that the changing landscape of publishing is slanting towards giving aspiring writers more hope with each literary throw of the dice.

More opportunities are opening up for them as print and e-book publishers and booksellers jostle for elbow room, or in some cases team up, to secure a foothold in the rapidly-shifting book market.

Jeff Bezos shows the Kindle

One of the clearest signs yet that the market is opening up to allow writers more access is Amazon’s recent decision to allow self-published writers and publishers anywhere in the world to use their Digital Text Platform (DTP) to sell their books via the Kindle.    

The Kindle Digital Text Platform is a self-publishing tool that lets anyone upload and format their books for sale in the Kindle Store.

Amazon has also launched AmazonEncore, a publishing venture through which they use information such as customer reviews on Amazon websites to identify “exceptional, overlooked books and authors that show potential for greater sales.” Amazon then offers to partner with the authors and help them re-introduce their books to readers through marketing support and distribution through multiple channels and formats, including as an AmazonEncore print edition on Amazon websites around the world, as a digital download from the Kindle Store, via spoken-word audio download on Audible.com and in national and independent bookstores via third-party wholesalers.

“Sometimes exceptional books and new authors don’t get the attention they deserve. We’re fortunate at Amazon to have customers who know great books and aren’t shy about telling us when they find one. We developed AmazonEncore to connect readers with great books that were overlooked the first time they were released,” said Jeff Belle, Vice President of Books for Amazon. 

This is a giant leap for Amazon. Fifteen years after starting off as an online bookstore, the company has metamorphosed quite dramatically to become, among other things, a full-fledged publisher and has grown powerful enough to compete head on with the world’s leading publishing houses – and threaten the livelihoods of small indie bookstores around the world. It is estimated that Amazon controls about 90% of the global e-books market and a substantial share of the print book market as well.

From atop their lofty perch they have made another carnivorous grab for market share by offering US-based authors a 70% royalty on sales of all electronic books, provided they’re priced between $2.99 and $9.99, net of delivery costs. There are other strings attached.

The list price must be at least 20% below the lowest list price for the physical book; the titles must be made available in all countries where the author or publisher has rights; they must be included in a broad range of features in the Kindle Store, such as text-to-speech and they “must be offered at or below price parity with competition”.

According to Amazon, delivery costs will be based on file size and pricing will be $0.15/MB. “This new program can thus enable authors and publishers to make more money on every sale. For example, on an $8.99 book an author would make $3.15 with the standard option, and $6.25 with the new 70 percent option,” Amazon explained in a press release.  

Vice President of Kindle Content, Russ Grandinetti said, “Today, authors often receive royalties in the range of 7 to 15 percent of the list price that publishers set for their physical books, or 25 percent of the net that publishers receive from retailers for their digital books. We’re excited that the new 70 percent royalty option for the Kindle Digital Text Platform will help us pay authors higher royalties when readers choose their books.”

The 70% royalty option is for in-copyright works and does not apply to public domain books published before 1923.

No doubt, some publishers will be tempted to take the bait and use the Kindle Digital Text Platform to sell their older backlist titles to take advantage of the 70% royalty offer – which could bode well for some writers. Although the Kindle is available globally, many users complain that there are still many titles that are not available on the device. By Jeff Bezos’ own admission, Amazon adds digital books to the Kindle on the basis of popularity and their sales rank in print form. Otherwise, the company leaves it up to authors and publishers to put their books for sale in the Kindle store themselves.   

World-renowned poet and author, Nikki Giovanni, a self-professed fan of the Kindle, said in an interview with the Herald Mail that the device did not offer enough titles in African fiction.

“I was going someplace – I think the Caribbean – and I was thinking, ‘Oh, I’ll read ‘Things Fall Apart’ again, because it was the 50th anniversary in 2008. And there you go, you can’t get it,” Giovanni said.

As the complaints increase, showing clearly that certain authors (particularly those outside of North America and Europe) are being marginalized, this could serve as a wake-up call to publishers and booksellers and spur the development of more initiatives aimed at further democratizing the publishing process and expanding readers’ access to a greater diversity of books. 

All the same, Amazon’s generous 70% royalty offer is a striking turnaround for a company which previously retained well over half of the revenues from non-exclusive e-books and was criticized by both authors and publishers.

In a December 5, 2009 interview with the New York Times, CEO Jeff Bezos, disclosed that Amazon normally kept 65% of the revenue from all ebook sales for the Kindle. The remaining 35% is shared between the book author and publisher. He was unfazed by the interviewer’s suggestion that a 65% cut for Amazon was a lot. “You’re an author, what does your royalty check look like? Are your royalties 35 percent?” Bezos countered.

It is quite telling that Amazon announced the 70% royalty option just prior to Apple’s launch of the Ipad. Apple is reportedly offering publishers a 70/30 split for books sold through their iPhone App Store, with certain conditions.

Amazon is also gearing up for Google’s promised launch of Google Editions, an online e-book store. Last October Google announced that they planned to launch Google Editions in the first half of 2010 with about half a million e-books supplied by publishers whom they’re already doing business with,

The Google-hosted e-books will be accessible on any device with a web browser. They will also be available for sale on Amazon.com and BarnesandNoble.com.

Amazon’s 70% royalty option is by no means unique and comes somewhat late in the game. Several e-publishers have been offering authors returns far higher than what was offered by the online giant. Among them is the e-book and print-on-demand publisher E-Reads which has been paying a royalty of 50% of net receipts for e-book sales since its launch in 2000.

POD and e-book publisher BookLocker pays royalties of 70% of the list price on ebooks priced $8.95 or higher and 50% of the list price on e-books priced lower than $8.95. For POD titles they pay 35% of the list price.

Smashwords pays authors and publishers 85% of the net for sales at Smashwords.com or on Stanza, and 81.5% for sales generated by affiliate marketers. They have an alliance with Wordclay, a print-on-demand publisher, to cover the print end of publication and distribution deals with the Sony Reader store and Barnes & Noble.

Amazon is leaving nothing to chance. They have now made their Kindle Development Kit available for software developers, opening the door for new applications to expand the functionality of the device. A number of companies have been experimenting with delivering active content through the Kindle’s browser. Amazon is reportedly working on a new revenue sharing model for developers.

Meantime, Wattpad, a Toronto-based online writing community, social networking site and mobile phone e-book developer, announced that it is partnering with self-publishing and POD provider Lulu.com.

The deal will allow the Wattpad writer community to publish, market, promote and sell print-on-demand (POD) print copies of their works via the Wattpad Marketplace on Lulu.com, a site hosted by Lulu.com.

Wattpad co-founder Allen Lau said, “This partnership will bring the authors of these 300,000 titles an opportunity to monetize their work.”

Anyone can join the Wattpad community and registration is free. Wattpad draws a large international audience. Each month the site attracts millions of visitors and showcases a wide variety of self-published e-books and other literary content. Users can publish whatever they want – short stories and novels, poetry and essays and share them with the community. More than 20,000 text documents are uploaded every day.

Wattpad has also developed an e-book reading application that allows users to read on most mobile phones and smartphones, including Nokia, Motorola, Samsung, Sony Ericsson, LG, , Sharp, Panasonic, Sanyo,RIM BlackBerry and the Apple iPhone.

Following its partnership deal with Lulu.com, e-books downloaded from the Wattpad site will continue to be free. On the Wattpad Marketplace/Lulu.com site, Wattpad-generated e-books will be offered both for free and for sale.

Wattpad has also reached an agreement to release its mobile phone e-book application on Bharti Airtel, India’s largest mobile phone network. The app will be available through the Bharti Airtel Application Store. Bharti Airtel currently has over 100 million mobile subscribers in India.

Additionally, Wattpad announced plans to develop an e-book reading app for Apple’s iPad device.  

Whether the publishing industry likes it or not, free and open access is where the global book trade is heading, propelled by the unrelenting march of digital technology. Writers are being further empowered by social media and blogging, all of which are helping to showcase promising literary works to the world, even helping some authors to build large followings. Increasingly, what stands between them and the achievement of their goals is their knowledge of the book trade and their resourcefulness and creativity.

It appears that Smashwords CEO, Mark Coker had indeed glimpsed the future when he declared that his dream is to “create a future where every author can be published, where every author is given a fair chance to reach their audience, and where every author becomes the captain of their own destiny.”   

For publishers and booksellers in regions like the Caribbean and Africa, it’s left to them to decide how to adapt to the changes. One thing is certain – the economic imperatives of the marketplace, the spiraling costs of publishing, distributing, financing and marketing physical books, and the indifference of their governments are conspiring to marginalize them and even put them out of business.

One response to “E-Publishing Opens New Roads and pays Higher Royalty Rates to Writers

  1. Thank you very much for the insight, this is a resource for all new writers as well as old ones, even publishers. I’ve been enlightened and encouraged with the hope of being in print. Amen…

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