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."