You are viewing your 1 free article this month. Login to read more articles.
Macmillan US has introduced a news standard lower e-book royalty rate, in the latest move by a publisher to establish economically viable rates in the face of increasing e-book sales but falling prices. The German-owned company has developed a new boilerplate contract with authors that would give them a standard royalty rate of 20% of net receipts on e-book sales, a rate that is 5% lower than most other US publishers.
In a letter to agents sent Monday, John Sargent, chief executive of Macmillan US, wrote that a new standard contract would set a "single royalty rate, based on the amount received by the publisher" for "all exploitation of the content of the book in digital form". The new contract would also pay higher rates for books sold direct to the consumer, 10% to 15% of net receipts compared with 5%.
The new rate was first revealed publicly by US agent Richard Curtis, yesterday (28th October). He wrote on his blog: "Agents are poring over a new contract boilerplate issued by Macmillan, parent company of St. Martin's, Farrar Straus and Giroux, Henry Holt, Picador, and Tor among others." He added: "The e-book royalty will come as the biggest surprise to e-book royalty watchers, as it goes contrary to the trend (which some think is a polite word for something darker) among major publishers to pay 25% of net e-book receipts to authors. Unfortunately, Macmillan offers even less than that - 20%.
"It will be interesting to see if Macmillan will hold the line at an e-book royalty below that of its playmates such as Random House and Simon & Schuster, who in the last year have reduced their e-book royalties to 25% of net receipts. It will be even more interesting to see if the agents fall into the trap of accepting 25% as the "standard" e-book royalty. Who says that's all it should be?"
The debate will be keenly followed in the UK, where the">http://www.thebookseller.com/news/100318-soa-to-recommend-authors-seek-h... Society of Authors is to recommend to its authors that they seek higher royalty rates, to the dismay of many publishers. Random">http://www.thebookseller.com/news/92411-random-house-digs-in-over-e-book... House UK has already been criticised by agents for seeking e-book royalty rates that some regarded as lower than standard.
Currently, the Society of Authors guide for e-books says authors "should receive at least 25% [royalties], preferably 35%, rising at an agreed level of sales. Some publishers offer 50% of net receipts, most others offer 15% to 25%. Resist anything less than that." General secretary Mark Le Fanu said the society was reviewing its general stance on e-books, and that 25% was not "good enough".
Speaking to the New York Times, Paul Aiken, executive director of the US Authors Guild, said that Macmillan was anticipating a time when Amazon, Barnes & Noble and other e-book retailers would try to push down wholesale book prices. "This is Macmillan’s attempt to pre-emptively squeeze authors."