Of course, if Amazon did not set the price of the ebooks, it would never make those kinds of mistakes.
Of course, if Amazon did not set the price of the ebooks, it would never make those kinds of mistakes.
My point in posting the link was not to argue about e-book prices. Nor to castigate Amazon. It's to point out re what we were discussing earlier that Amazon's contract gives it total control over what self-published authors are doing on their site and through their apps on other sites and machines. It can re-write the contract terms and the royalties split at any time, set your price to $0 forever, change your cover, vanish your book, etc., and gives Amazon a considerable chunk of control over the author's rights in the property without paying a cent for them and with no conditions.
This is, again, not necessarily an unworkable deal for authors. But it is a deal in which you have no negotiation leverage, very little control and little legal recourse. And it's important when self-published authors are entering into such a contract that they understand this, that they understand the power they are handing over to Amazon and other electronic vendors in doing such a contract. It is important that they pay attention to what in Amazon's policies and statements may change, indicating their arrangement with Amazon may change and suddenly. It's part of being a business person, one who has fewer resources as Jim points out than publishers do when actions work against them. And in the argument that self-publishing lets you keep more money than working with publishers, it's a factor. Self-publishing authors can potentially get a larger cut now from electronic vendors. This could change tomorrow. And even if it doesn't, Amazon's accounting is shrouded in secrecy and certainly not secure. Other companies may be even harder to pin down. So these are factors that self-publishing authors have to realistically calculate when deciding what gambles to take and not take with Amazon and other companies, including POD companies like CreateSpace. Those contract terms are important to pay attention to, and if necessary and possible, may need legal advice.
All valid points but here is the defining issue for myself.
If Amazon does something I don't like - guess what - I can stop using them. I can take my titles down and do whatever the heck I want from that point on.
In a traditional contract...the publisher may terminate YOU at anytime they want, but you cannot sever the relationship. A publisher can price your books at anything they want...you have no say. They decide the cover...you have no say. They decide on the title...well you get my point. From what I've been told all big-six contracts are for the term of the copyright (life + 70 years) and while in the past, they would terminate when they go out of print...the advvent of ebooks may mean that they never go out of print and will be enforced for basically forever.
I'm much more concerend about the terms of a contract I can't leave then one that I have the right to walk away from. But that's just me.
For this example we'll assume the following:
- Trade paperback: $14.99, ebook pricing: $9.99
- Royalty 7.5% on list of print, 25% of net for ebooks
- Percentage of books sold in each format: 30% ebooks, 70% print books
- 30% returns on print, 0% returns on ebooks
- Distribution fees 50% for print, 30% for ebook
- Print cost $1.50 per book, $0.0 for ebook
- $10,000 advance
If someone wants me to run the calculations with different assumptions let me know as Robin gave me a nice spreadsheet where I can play different what if scenarios.
So let's look at a low selling title - say with a print run of 2,000 (1,400 print books (after returns), 467 ebooks). We would have the following:
- $25,648 Total Income
- $ 756 Publisher Share (2.9%)
- $10,000 Author Share (39%)
- $14,892 Costs (printing & Distrbution) (58.1%)
The publisher didn't do too well on this title. But now let's make it a bit more successful and have the book sell 5,000 copies
- $64,120 Total Income
- $16,891 Publisher Share (26.3%)
- $10,000 Author Share (15.6%)
- $37,229 Costs (printing & Distrbution) (58.1%)
That seems like a reasonable success and a reasonable share between the parties. But now lets examine what happens if the author earns out, which occurs at around 8,380 copies.
- $107,465 Total Income
- $ 35,056 Publisher Share (32.6%)
- $ 10,013 Author Share (9.3%)
- $ 62,396 Costs (printing & Distrbution) (58.1%)
Now the publishers "bite" is three times the amount the author makes - and it will just continue to be a huge disparity the more books that sell. If we go up to 15,000 books the break down is as follows:
- $192,360 Total Income
- $ 62,750 Publisher Share (32.6%)
- $ 17,924 Author Share (9.3%)
- $111,687 Costs (printing & Distrbution) (58.1%)
So you can see the "bite" from the profits of the book break down as follows:
- 2,000 copies (low sales) - publisher cut is 2.9%
- 5,000 copies (mod sales) - publisher cut is 23.6%
- 8,360+ copies (high sales - author earned out) - publisher cut is 32.6%
This is the what I was trying to say about how bigger performing titles will provide the publishers with the income to offset the low performing sales. The author will earn significantly less than the publisher for a good selling title, but could earn the lions share of the profits on a poor sellling title.
Last edited by sullivan_riyria; February 21st, 2012 at 05:54 PM.
You can sever the relationship if they don't publish the book within a set time period and from several other clauses. But once you give them the license and they live up to their parts of the agreement on it, you can't just revoke the license because you feel like it. If you could do that, there would be no point in publishers entering into licenses with authors because there's no certainty they'd ever recover production costs because the author would block them selling what they printed or produced in electronic format. (Amazon, by contrast, has no real production costs to lose -- you are the one doing most of the work, etc.) The publishers would just do writer for hire contracts where they own the rights to the work, like tie-ins. You're trying to say that the two types of contracts are the same beast, but they aren't.In a traditional contract...the publisher may terminate YOU at anytime they want, but you cannot sever the relationship.
Because you granted them the license and because you don't work for them or own the publisher. Again, if they let every author control for his or her own book printing, manufacture, pricing, book cover, demand promotion commitments and essentially act as their boss, they would not recover their costs spent on the books and would not realistically be able to operate. They cannot agree for you to be the publisher of Bantam Books, say, if Bantam is publishing your work. Again, you're trying to say that the relationship and circumstances with Amazon and the publishers are the same, but they are two entirely different set of business factors and business arrangements. Bantam is putting out a line of books. Amazon is simply providing a sales platform.A publisher can price your books at anything they want...you have no say. They decide the cover...you have no say.
And again, you don't get to control the price of your books on the Kindle and Kindle Apps -- Amazon does and you agreed that they had this control. As Jim discovered, Amazon could set his price to anything they wanted and he would not get the money back that he lost by having that control taken away from him.
All publishing license contracts are for copyright term. Working with a small press, you get the same deal.From what I've been told all big-six contracts are for the term of the copyright (life + 70 years)
That's one of the things that is being negotiated as the market develops, along with who owns electronic rights from old contracts -- a fight publishers have lost in court so far. But no, publishers will not be able to use the print out of print rules regarding e-books for very long. It's not a feasible system and they are already having to retreat from it. Authors are getting rights to their backlist and self-pubbing them. But it's also not fair to have the publisher do a Kindle edition for a new book and then demand the rights back so that they lose their costs and you take over the Kindle edition they produced on the license. So there are a lot of issues to work out. But again, there are a lot of issues to be worked out with Amazon too, who can essentially hold on to your rights forever because you gave them carte blanche in the contract to change the terms so that they can have them forever if they feel like it.and while in the past, they would terminate when they go out of print...the advvent of ebooks may mean that they never go out of print and will be enforced for basically forever.
But again, you only have the right to walk away from the Amazon contract if Amazon says you have the right to walk away from it. You agreed to a contract with them that says they can change the terms whenever they want and they have better lawyers. The amount of freedom you have is only what Amazon says you have. So you basically have to hope that they don't want to screw you on your self-pubs. Whereas the publisher cannot simply change terms of the contract without your consent. The publisher is restricted, Amazon is not. The publisher has contractual obligations, Amazon has none. The publisher has to offer your product for sale or the contract can be ended, Amazon does not have to let you sell your book on their site but the contract is still in force. The publisher has to invest money into the rights of the license, Amazon gets the electronic rights for free. And while you can probably walk away from the contract with Amazon, it's again dependent on Amazon's willingness to allow you to do so. Nothing is free.I'm much more concerned about the terms of a contract I can't leave then one that I have the right to walk away from. But that's just me.
And for both poor selling and well selling, the publisher takes all the costs of the risk, which are mountains higher than you could manage on your own. That you can go to the e-book market and have relatively low costs and possibly sell large amounts of copies which if the electronic vendors actually pay you for them can result in high amounts, doesn't change the fact that what the publisher is doing with the license costs lots of money. Those are business factors that you can't pretend aren't there. But that doesn't mean that continuing with a publisher in a license arrangement will work for you. What it does mean is that self-pubbing electronically with e-vendors and entering into a licensing partnership with a publisher, big or small, are not the same things and cannot operate the same ways. And it doesn't mean that Amazon can't change its share of monies received for e-book sales whenever it feels like it with your agreement. You have to hope that Amazon keeps the arrangement the same or improves it, or that you can get a better contract with them that gives them less control and flexibility.The author will earn significantly less than the publisher for a good selling title, but could earn the lions share of the profits on a poor sellling title.
Also, $0 cost on e-books for a publisher is wrong. This is a claim that authors make a lot in these arguments, but no amount of wishing makes it true.
Last edited by KatG; February 22nd, 2012 at 12:42 AM.
As to Jim Hines case...it's probably that there was a price match and he just didn't realize that the price was lower somewhere. I also saw this happen when I temporarily lowered a price of one of my books. The issue is it was low for only a few weeks, but one venue (I think it was Kobo or Diesel) actually didn't get the price lowered until weeks later - and after the price had already returned to the higher price. When I saw the price drop I immediately went looking for the low price (as did Jim) and at first I didn't see it. But then I wrote Amazon - and they pointed me to the site with the lower price.
I don't think there is any widespread "stealing of money" there may be individual glitches like the sample being mistaken for a full book but even in that case I would argue the "marketing" aspect of those free downloads more than make up for the lost revenue. The person didn't loose 6,000 sales because it was only because it was free that so many eyeballs paid attention. I don't know how many would have sold "at the full price" but it was an honest mistake.
In the case of Amazon, there is no "contract" you are agreeing to "terms" in using their service, and it is not uncommon for organizaitons to revise terms and have them take effect simply by posting them. It is a common practice, and if you are concerned...well don't use them.
At the time you sign the contract very little is known and you are putting a lot of faith in the pubisher to do things right. If they do a good job, you are in fine shape, if not...your career can be seriously harmed and there is no recourse.
- You set the price and are paid 70% for ($2.99 - $9.99) and 30% outside that range.
- Amazon can and will price match if you have a lower price elsewhere. (I suspect in Jim's case the trigger was becuase of the lowering he did at Christmas and the systems were out of sync from time of detection to taking effect.
- If they lower the price withouth your consent, they will pay you on list price.
Amazon is not on some grand scale going behind authors backs and setting whatever price they want. Yes, they'll sometimes put a book into a promotion, but they will pay full price if they do Yes, they'll do price matching in an effort to have the "best price" on the market and sometimes those algorithms might have a glitch. The language in the terms is limiting their liability when a glitch occurs.
Once again there is no "contract" in force with Amazon.
Which is why I had likened publishing to venture capital in that they are investing significant amounts of cash - and will fail more often then they succeed. As such...when they do get a "winner" they take the lion's share.
He who takes the risks - reaps the rewards, in the case of traditional publishing - it is the publisher, in self its the author. I'm not saying that the publisher doesn't deserve to make this "bigger bite" I'm just pointing out that in the case of a successful book the author's share is dwarved by the publisher's - it isn't a matter of "right" or "wrong" it is the economics of the system.
But in traditional publishing print dominates so the sunk costs are required to produce the print book and then to make a subsidary version of an ebook takes a few hours to do the conversion, a reasonable amount of time for testing. So the additional amount to produce it is VERY small. My wife converts from Word to ebooks in about 1 - 3 hours depending on book complexity.
Overhead costs, (outside of printing/warehousing/returns), should be shared across the formats in the relative % of income produced. So yes ebook costs should take into account the amount of money used to promote the title as a whole.
Last edited by sullivan_riyria; February 22nd, 2012 at 05:45 AM.
Well, the only reason for dealing with a company like Amazon is to get your name out there. And since the only promotion Amazon does is to put your book on the New list for its first three months, simply withdraw it after three months. To keep your name visible on Amazon, you need to release a new book every three months. That may be difficult but that's the way it is. Writers write; you have to be productive if you want to do this full time.
- Kindle deal of the day
- Top 100 under $3.99
- Emails for featured books in a genre
- Emails of "because you bought you might also like"
- Special promotions such as the Summer Sale or the Big List Sale
- Featured "editor picks"
Beyond this there are intrinsic aspects of the site that gets your books noticed. Such as:
- Bestsellers lists by genre
- Books bought by those viewing this page
- Reviews from readers that get books noticed
- Reader forums for discussing books
- Author pages with Bios, videos, books publsihed, tweet and blog feeds
- Author cross sales lists
- Book tagging
- "like feautres"
That's not to say that I don't think you should continue to write - and putting out more than one book is certainly a key to success but I get a great deal more exposure from Amazon than what you seem to indicate.
And what are you chances of getting on any of those lists? Unless you become a Name, it's pretty slime. And if you do become a Name, Amazon would be only one element of your promotions; people could still find your works without Amazon. Have realistic expectations. Thinking your books will make the Top 100 or Featured list will only happen to a select few. For most writers: don't deal with jerks unless you absolutely have to. Not only will it cause you problems, it will degrade your morale. And writing is hard enough without putting up with naysayers.
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