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Wylie: 50% royalty rate ‘to be the norm'

Literary agent Andrew Wylie believes a 50% digital royalty rate will become widely accepted by publishers once the digital "shake-out" settles down.

Speaking to The Bookseller from the Frankfurter Hof, Wylie said digital publishing should be a more profitable means of publishing and some of that profitability needs to reach the author. "Publishers should pay a 50% digital royalty and digital distributors should not be charging 30%—zero would be attractive," he said.

Publishers had tried to control their costs during the rush to digital, leading to many holding a firm line at 25% of net receipts, Wylie said, but there were indications that this was beginning to change.

"Publishers were suitably careful about how they covered their costs in that transition period, but after the shake-up—which is probably still a point in the future—it will become obvious that a higher digital royalty is appropriate. It is happening a little now and it will come to be the norm," he said. Wylie said the launch of his own digital imprint, Odyssey Editions, a year ago had had "an effect" on these negotiations.

He conceded that with 20 titles at launch it was not going to be a business. "What we were trying to do with Odyssey was to demonstrate to publishers the likelihood of disintermediation if the digital piece and the print piece were not kept together. It had an effect, and it depends on who you were as to whether it was the desired one or not."

He was, however, critical of agents entering into 50:50 deals with authors over digital publishing. "One of the appeals of digital is that authors should make more money, not pay their agents more," he said.

Wylie's view of digital royalties echoed those of agents speaking at one of the pre-show digital conferences. David Miller from the UK's Rogers, Coleridge and White literary agency said he had seen some "slippage" in the UK over the 25% digital royalty rate. "I've negotiated some better rates, and publishers are beginning to run a little faster, and we are getting those conversations going, particularly where an author has an extensive backlist, or where the author has earned out."

However, during a discussion held at the fair on Wednesday, HarperCollins chief executive Brian Murray said authors were getting a better digital royalty than on print. He said: “When we looked at our print royalties, we saw they averaged about 16%-18% so we knew we could afford to pay a higher royalty rate. That was almost a 40% increase in the royalty rate."
 

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Let me just revise this article a little bit and see what folks think:

AUTHORS: 3% AGENT COMMISSION 'TO BE THE NORM'

Authors believe a 3% agent commission will become widely accepted by authors once the representation "shake-out" settles down.

Speaking to The Bookseller from the Frankfurter Hof, the authors said print and digital should be a more profitable means of publishing and some of that profitability needs to reach the author. "Publishers should pay a 50% digital royalty and agents should not be charging 10-20% of that-—zero would be attractive," they said.

During the rush to get noticed by publishers, many authors held to a generous line of 10-15% of an author's receipts, the authors said, but there were indications that this was beginning to change.

"Authors were suitably careful about how they covered their costs in that transition period from self-published and subscription publishing models, but after the shake-up—which is probably still a point in the future—it will become obvious that a lower agency commission is appropriate. It is happening a little now and it will come to be the norm," the authors said. The authors said the launch of agency's such as Andrew Wylie's years ago had had "an effect" on these negotiations.

Considering creating a digital book is a one time fee, the royalties should be close to 90%. The good news with self-publishing an digital or paperback book is that the royalties are 100% and distribution costs are 0-5%. Seems like a no-brainer to me

This is a specious argument because the agent's job doesn't change one iota. While electronic publishing virtually eliminates many of the costliest aspects publisher's and distrubutor's business, there is almost nothing that changes about the traditional author-agent model if electronic publishing is pursued through the normal channels. Agents (at least good ones) still find and cultivate talent, pair it with the right publisher, negotiate of a publishing deal, and see to the finer points of publication and life of a title long after it's hit shelves, or in this case, servers, so what actually changes that would warrant a drop in the standard commission?

Great comment, Snow. And you are quite right.

Clay, the costs of warehousing, shipping and printing are removed but only on the digital version. The print version still incurs them. Would agents and authors be prepared to take a lower royalty on print sales to allow for the proportionately increased costs on those sales? Print runs will decrease in size as ebook sales grow, meaning it will cost more to produce printed books.

If agents want increased ebook royalties then they may have to consider reduced print royalties.

Not that they will.

And anyway, when is the last time any of Wylie's clients actually got paid a royalty? Massive unrecouped advances all over the place.

Let me just revise this article a little bit and see what folks think:

AUTHORS: 3% AGENT COMMISSION 'TO BE THE NORM'

Authors believe a 3% agent commission will become widely accepted by authors once the representation "shake-out" settles down.

Speaking to The Bookseller from the Frankfurter Hof, the authors said print and digital should be a more profitable means of publishing and some of that profitability needs to reach the author. "Publishers should pay a 50% digital royalty and agents should not be charging 10-20% of that-—zero would be attractive," they said.

During the rush to get noticed by publishers, many authors held to a generous line of 10-15% of an author's receipts, the authors said, but there were indications that this was beginning to change.

"Authors were suitably careful about how they covered their costs in that transition period from self-published and subscription publishing models, but after the shake-up—which is probably still a point in the future—it will become obvious that a lower agency commission is appropriate. It is happening a little now and it will come to be the norm," the authors said. The authors said the launch of agency's such as Andrew Wylie's years ago had had "an effect" on these negotiations.

This is a specious argument because the agent's job doesn't change one iota. While electronic publishing virtually eliminates many of the costliest aspects publisher's and distrubutor's business, there is almost nothing that changes about the traditional author-agent model if electronic publishing is pursued through the normal channels. Agents (at least good ones) still find and cultivate talent, pair it with the right publisher, negotiate of a publishing deal, and see to the finer points of publication and life of a title long after it's hit shelves, or in this case, servers, so what actually changes that would warrant a drop in the standard commission?

Considering creating a digital book is a one time fee, the royalties should be close to 90%. The good news with self-publishing an digital or paperback book is that the royalties are 100% and distribution costs are 0-5%. Seems like a no-brainer to me

Great comment, Snow. And you are quite right.

Clay, the costs of warehousing, shipping and printing are removed but only on the digital version. The print version still incurs them. Would agents and authors be prepared to take a lower royalty on print sales to allow for the proportionately increased costs on those sales? Print runs will decrease in size as ebook sales grow, meaning it will cost more to produce printed books.

If agents want increased ebook royalties then they may have to consider reduced print royalties.

Not that they will.

And anyway, when is the last time any of Wylie's clients actually got paid a royalty? Massive unrecouped advances all over the place.