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Agents press for e-book escalators

26.04.11 | Charlotte Williams

Agents are anticipating escalators in e-book contracts to become "the norm rather than the exception", as they reported already having negotiated the clause with UK publishers in some cases.

An escalator clause means the royalty rate changes according to the level of sales. One leading agent said: "A number of publishers in the UK and the US are now offering escalating royalties [on e-books] . . . I want to work totally with publishers but I think they should at least be open to an escalating royalty rate on e-books."

He said offering an escalator would be a way of bridging the gap between the royalty rate offered by established publishers, and the often higher rate offered by some specialist digital publishers. He added: "As the sales start to become significant, following the US, it is now becoming a real issue as UK publishers are very keen to publish in digital and increase sales."

Blake Friedmann agent Oliver Munson said: "We've certainly had e-book escalators in a number of contracts, and I expect it will be the norm rather than the exception soon. I can't realistically envisage the much-trumpeted 25% net receipts remaining the benchmark for much longer either."

Sheil Land agent Piers Blofeld said: "I've negotiated an escalator, but not with one of the big four. That would be a huge surprise. Am I confident the publishers will switch? Absolutely."

Meanwhile, Redhammer Management agent Peter Cox said that while he did not know of any major publisher currently doing escalators: "That will change quite quickly, and it's one of the things we'll be looking at when the time comes to review existing contracts. The whole thing is in a state of flux."

But he stressed other factors influenced the value of a contract: "If a major publisher offers a lower royalty than an e-publisher, but really supports the book and sells it more effectively, who are you going to call?"

The Publishers Association and publishers contacted by The Bookseller declined to comment, with those giving a reason, including the PA, citing commercial issues.

This move comes as e-book sales have overtaken trade paperbacks as the biggest category in the US. According to figures released by the Association of American Publishers, e-book sales totalled $90.3m (£55.5m) across the month of March, up 202.3% on February 2010.

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