Organizations that represent authors have been issuing press releases and making dramatic statements that traditionally published authors are an endangered species. The main argument is that publishers are not paying appropriate e-book revenue and this is forcing authors to write more to make ends meet or take on a second job.

Author organizations want higher e-book revenue

The Authors Guild released a statement that was squarely aimed at the American Publishers Association. “What we demand is simple: Publishers need to revise many of their standard contract terms to make them more equitable. Authors should get at least 50% of net e-book income, not a mere 25%. They should not have their hands tied with non-compete and option clauses that can make it impossible for them to write new books without delay. They should not be forced to accept royalties that can decline by 50% when the publisher cuts its wholesale price by a single cent. They should be able to get the rights back when the publisher stops supporting a book.”

“Authors’ income is down across all categories. According to a 2015 Authors Guild survey—our first since 2009—the writing-related income of full-time book authors dropped 30% over that time period, from $25,000 to $17,500. Part-time authors saw an even steeper slide: their writing income dropped 38%.”

The Society of Authors wrote an open letter to publishers in the United Kingdom and pointed to a recent survey that found that the median income of a professional author is now just £11,000, with only 11.5% of UK writers making a living solely from writing. Pointing out that “authors remain the only essential part of the creation of a book and it is in everyone’s interests to ensure they can make a living”, it tells publishers that “unfair contract terms, including reduced royalty rates, are a major part of the problem”.

“It’s a daunting landscape, far more savage and hostile to the author than any we’ve seen before. But one thing hasn’t changed, which is the ignored, unacknowledged, but complete dependence of those great interests on us and on our talents and on the work we do in the quiet of our solitude. They have enormous financial and political power, but no creative power whatsoever. Whether we’re poets, historians, writers of cookery books, novelists, travel writers, that comes from us alone. We originate the material they exploit.”

A Small History in e-book Royalties

From the mid-1990s, when e-book provisions regularly began appearing in contracts, until around 2004, e-royalties varied wildly. Many of the e-rates at major publishing houses were shockingly low—less than 10% of net receipts—and some were at 50%. Some standard contracts left them open to negotiation. As the years passed, and especially between 2000 and 2004, many publishers paid authors 50% of their net receipts from e-book sales, in keeping with the idea that authors and publishers were equal partners in the book business.

In 2004 Random House, which had previously paid 50% of its revenues for e-book sales, anticipated the coming boom in e-book sales and cut its e-rates significantly. Other publishers followed, and gradually e-royalties began to coalesce around 25%. By 2010 it was clear that publishers had successfully tipped the scales on the longstanding partnership between author and publisher to achieve a 75-25 balance in their favor.

Will e-book royalties ever increase?

Publishers now are fairly entrenched with the whole e-book revolution thing and it looks dubious that any body of authors have the power to negotiate better terms.

Some bestselling authors have managed to obtain a 50% e-book split, though they’re asked to sign non-disclosure agreements to keep these terms secret. I have also also heard of authors with strong sales histories negotiating 50-50 royalty splits in exchange for foregoing an advance or getting a lower advance; or where the 50% rate kicks in only after a certain threshold level of sales. For instance, a major romance publishing house has offered 50% royalties, but only after the first 10,000 electronic copies—a high bar to clear in the current digital climate. But overall, publishers’ apparent inflexibility on their standard e-book royalty demonstrates their unwillingness to change it.

