Kassia Krozser is at it again on her Booksquare blog. I have to admit that Booksquare is one of my favorites, mostly because it makes me think. Her latest post about e-publishing, e-rights, e-sales, etc., hit some very important points.
Her article talks mostly about Terry Goodkind's decision to place his book's e-rights with someone other than the publisher who he signed his print rights to. At first glance most authors might think, "hey, I should stop signing my e-rights over to my (predominantly print) publisher and get a deal like Goodkind did." My advice: If you can, go for it...but be sure to think about the entire deal, not just the e-book royalty rate.
What am I alluding to? First of all, any book's rights are less valuable to a publisher if they don't include the e-component. For example, let's say I'm willing to pay an author royalty rate of x% for print copy sales and the deal also includes all e-rights to the book. If the author/agent comes back to me and says they want to keep the e-rights to potentially shop around elsewhere, I have to admit I'm inclined to counter with a lower print royalty rate, something less than the original x%. After all, I based my original x% on the assumption that I'm the only publisher promoting, selling and building this brand, where "brand" could be title, author, etc.; the more diluted the brand promotional effort becomes, the less value I see in the deal, hence the lowered royalty rate for print copy sales.
Secondly, I always feel it's important to restate the obvious in these situations. Here's the basic royalty calculation formula:
Author royalties earned = Royalty rate X Net revenue/unit X Units sold
So if I have a 10% royalty rate and the book nets the publisher $10 for each copy sold and we sell 3,000 copies in the period, the author just earned $3,000 in royalties (10% X $10/unit X 3,000 units). Perhaps that other e-publisher will give you a 20% royalty. The question you have to ask yourself is: Will this other publisher move the same volume?
One of the myths of the e-publishing world is that all books are on a level playing field, so you'll sell just as many with publisher X as you will with publisher Y. This simply isn't true, at least not in most cases. This is very similar to the complicated world of Google search results. Just because you love chocolate and you launched a website all about chocolate doesn't mean you'll immediately climb to the top of the Google results for a search on "chocolate."
We're still in the infancy phase of e-publishing, but as this area continues evolving many of the same rules will apply. Marketing and promotion are two keys. When you walk through a physical bookstore all the titles on promotion are the ones that jump out at you. I'm talking about books on endcaps, tables and other displays that really catch your eye. Placement in these slots comes at a price and titles promoted like this generally produce much stronger sell-through results (vs. when they're not on promotion).
You don't have endcaps and tables in the virtual world, but you still have important promotional tools that help boost sales. Just look at any e-retailer's site and you'll see them: Links to related titles, buy X get Y, other customers also like this book, e-mail blasts, etc. The print world has a lot of titles in it but the e-world will ultimately have many more, so without the use of promotional tools how will individual titles rise above the noise?
These things all have a way of achieving equilibrium over time. And since the e-publishing world is in such a state of flux it will be fun watching this equilibrium take place in the years ahead. That said, rather than blindly signing over e-rights to a publisher, it's always a good idea to ask them how they plan to exercise and maximize ownership of those rights for you. It's fair (and wise) to ask your editor/publisher what e-formats will your book be available in, for example. The answer to that question might be even more important than the royalty rate offered...after all, even the highest royalty rate imaginable still produces zero income if the books aren't offered in e-format.
P.S. -- Speaking of publishing blogs... I recently came across two great ones that I wanted to share. The first is by Jeff Rutherford, a publishing PR expert I've bumped into several times over the past year. The second is called View From the Publishing Trenches and is written by publisher/author Walt Shiel. I highly recommend keeping up on both of these wonderfully insightful industry blogs.