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Do Authors Deserve a Higher eBook Royalty Rate?

Publishers Marketplace covered an “investor day” report at News Corp. (subscription only link) where investors got a closer look at the profit margin for digital books at HarperCollins.

Over at the AARdvark blog, DeFiore and Company founder Brian DeFiore shared the most important stats (chart embedded above): a “$27.99 hardcover generates $5.67 profit to publisher and $4.20 royalty to author” and a “$14.99 agency priced e-book generates $7.87 profit to publisher and $2.62 royalty to author.”

DeFiore posted this passionate response:

We have all heard the additional argument: that for a very large percentage of authors this is irrelevant since their advances don’t earn out– effectively raising their per unit royalty. That may be true, but it logically leads to what seems to me the most unfair aspect of all: That, therefore, the only authors that are financially punished by this system are the ones whose books perform very well. The ones whose books earn out. The big name authors and the celebrities whose books don’t perform to expectation are untouched; the author who gets a reasonable advance and whose book sells much better than expected are the ones who suffer the greatest loss.

(Link via Sarah Weinman)

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