Following on from the Google v Authors Guild settlement, Random has stated that they are going to change how they deal out e-royalties. Instead of basing royalties on the list price, they will base them on the actual net moneys they have received as publisher. Booksquare goes into this really well.
Their reasoning for why they are doing this? – “With the widespread use by consumers of electronic devices such as the iPod, the Amazon Kindle, and the Sony Reader, a significant market for e-books and digitally delivered audio content is finally ready to emerge," the letter stated. "In response, Random House is making major investments in our digital infrastructure and is creating digital files of active titles so that they are available for sales as e-books, as downloadable audio, and for Internet search and discovery."
This all sounds really good and promising doesn’t it? But the new royalty rate for sales will be only 25% of the amount received for all sales. For a breakdown of what authors should expect to get, Richard Curtis has put this in actual figures using a recent Random House contract and it doesn’t look good for authors.
According to his math: ‘A recent Random House contract states that on all copies of a work sold as an electronic book, the royalty will be 25% of the US suggested retail price until the book’s advance has earned out, and 15% of the list price thereafter. Under the current (pre-change) royalty structure, on a book retailing for, say, $10.00, the e-book royalty would be $2.50 per download at 25%, then $1.50 per download when the royalty rate shifts to 15%.By contrast, the new royalty of 25% of the net receipts comes to something like $1.25 per sale on a $10.00 book (25% of 50%).’
While Random’s line is that the new figures reflect the market and the rates offered by their competitors, they seem to be ignoring the big giants – Google and Amazon.
If e-royalties are getting you down though, you could do what Paulo Coehlo does and give readers free copies of his books to download. For him, it leads to an increase in sales of the hardcopy editions. Go figure.

The Australian Writer’s Marketplace is Australia and New Zealand’s only guide to the writing industry. While providing submission and contact details for the print media and publishing industry.

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