Interesting. Amazon's position may not be what Amazon actually intends to get, but simply an initial bargaining position they know they'll have to back down from. The Big 6 are in a really bad position right now. They're being investigated for price fixing, and half of their book sales these days are ebooks, of which Amazon is the largest distributor. If they drop out, Amazon still has a whole market of indie books to sell, which is steadily growing. In fact, I believe I've seen data that a larger and larger share of Amazon's bestsellers are indie, which is probably giving Amazon the stomach to make this move. Amazon may have realized that the Big 6 are becoming historically irrelevant, and will gradually shrink to being just a small part of the market.
If the Big 6 don't renew their ebook contracts, it means Amazon's entire ebook sales will be nothing but indie. That will give indies massively better exposure, and indie authors a lot more visibility, if all the Big 6 books are kicked off the site. Amazon's also probably betting that its indie authors who are selling well using private deals with Amazon may balk at signing weaker contracts with the Big 6 if the old publishers come headhunting. Judging from the book trends I'm seeing, Amazon's making a shrewd move. Talented up-and-coming authors still have an incredibly hard time getting a book contract with the Big 6, and it's a heck of a lot easier to just publish here. Amazon's in the position to do a massive talent grab, not just from a generation of talented new authors, but established writers with back catalogues who don't want to go through all the hassle of getting their back into print with their old publishers.
Amazon's also probably trying to get a good contract for themselves locked into place before more companies plunge into the ebook market. They're probably eyeing Google Player warily, and are watching with great care any steps B & N make with the Nook spin-off, and B & N's signalling that it may start selling internationally.
[i]Amazon's also probably betting that its indie authors who are selling well using private deals with Amazon may balk at signing weaker contracts with the Big 6 if the old publishers come headhunting.[/i]
With Amazon, Apple, B&N, Kobo, et al paying 70% of list, it would be very difficult for the Big 6 to entice very many successful Indie authors away (and they don't really want unsuccessful Indie authors). The 'chiseled in stone' 25/75 eBook royalties schedule, from which the Bog 6 refuse to budge, result in authors getting only 17% (and that's BEFORE you pay the 15-20% agency fees).
Jewelry is often sold for ten times cost. Keystone (twice cost) is considered giving your merchandise away in the jewelry business. The turnover is dismal, though. The grocery business is the opposite, the profit margin is slim, but the turnover is very high. The publishing business is in a world of its own.
Did you know...print contracts only pay 8% royalties? So 30-70% here is GREAT! If you ever get a signed print contract...check it out...only the big names get advance royalties and then it's still only 8% !
[i]Publishing houses actually make a loss on most of the books that they publish, that explains the 85/15[/i]
This is a myth. If they lost money on most books, they'd be out of business. What publishers like to say is that a book didn't 'earn out.' It does not mean that the book wasn't profitable [i]for the publisher[/i]. It means that the book wasn't profitable enough for the author to ever see a cent beyond the advance. The publisher probably did quite well, but the 'didn't earn out' manta allows them to keep author expectations for a decent royalty rate on the low side.
[i]Did you know...print contracts only pay 8% royalties? So 30-70% here is GREAT! If you ever get a signed print contract...check it out...only the big names get advance royalties and then it's still only 8% ![/i]
Typically, newbie authors get 10% on trade paperbacks. Authors with a modest track record can get 12.5%, and mid-list authors can get 15% if they've developed a decent following. On small paperbacks like you find at newsstands, you're right. The rate can be as low as 6% with an average of about 8% for more popular authors. It really depends on what a particular publisher is willing to offer, and what an author is willing to accept.
I agree that 70% here and at most other large retailers is great. I keep wondering what it will take for the big publishers to start sharing the wealth with their authors. Obviously we haven't reached that point yet.
If they drop out, Amazon still has a whole market of indie books to sell,**
Is Stephen King losing sleep over competition from us? I don't think so.
Except for Kindle owners, people don't buy books because they're sold on Amazon. They buy books because they want to read them. If I see a good review for a book in my field, I will look for it on Amazon. If it's not there, I'll look on B&N. But that's the book I'll order, not some vampire chick lit from a self-publisher.
This is why, I suspect, Scribblr won't play with Kindle Select, because he wants his books read by devotees of Nook, Sony Reader, iBookstore, etc.
Very few writers get 15 percent. If they do, it's only after the book has sold X thousand copies; the usually scale on a hardcover is 10 percent, 12.5 percent, then 15 percent.
And that is only books sold through bookstores. When the royalty statement comes in (twice a year, three months after the sales period closes), you will be amazed at how many books are sold overseas, by the publisher's catalog, and through special deals, all of which pay the 10 or 15 percent on money actually received, which works out to 5 or 7.5 percent of the retail price.
Finally, the publisher will hold out a sum against future returns. My most recent royalty check was for a bit more than a thousand dollars, and the hold-back was $1500! Since that book was published in 2007, I have in effect been loaning $1000-1500 to the publisher for five years at no interest.
I've just signed a contract with what is considered a very good publisher. No advance, a royalty of 10% on sales of the hardback, the same on sales of e-editions, and less on sales of the paperback. The royalty is calculated on the wholesale price of the book (which varies, but Amazon is reported to demand a discount of more than 50%). In other words, on a hardback that retails for $30 and is wholesaled to retailers for perhaps $15, I will collect $1.50, payable once a year in annual increments alone (if the book is published mid-year, I will have to wait eighteen months for my first royalty check). The contract makes no mention of withholding sums for possible returns, so I'm presuming it won't be done.
I may be a poor negotiator, but I have good reasons for signing this contract; all the same, it's not something I will do with all of my work, unless the prestige of the publisher's imprint and the editorial and design work and promotion the publisher does make up for the ungenerous terms I've accepted. We'll see.