Thursday, May 5, 2011

eBooks and Revenue Sharing—50/50 or bust!

I've been reading the Tools of Change for Publishing LinkedIn group discussion for some months and felt compelled to respond to a recent thread started by Steve Weiss at O'Reilly:

Who else is ready to consider to match the 50% royalty model? 

We at WalrusInk ePublishing are going with a 50% revenue-sharing model. (The old vocabulary with royalties, rights, and advances no longer applies, because we don't intend to "own" the IP, which is another story.) It feels fair and it's really easy to calculate revenue, because it shows up in the bank account at the end of every month, we hope. 

The vendor share of eBook sales is pretty standard at 30% of the sale price, though there are a number of extenuating circumstances that muddy these waters. Still, Amazon, Apple, and Barnes & Noble have made this a kind of eVendor standard. For the purposes of rough estimates, most of our books are likely to sell for $10.

$3.00 to the vendor
$3.50 to the author (or authors)
$3.50 stays in the WalrusInk bank account

Is this fair? Who knows? In fact, I'm not sure fairness can be calculated in this way, especially since, at lest for the moment, we're at the mercy of rapidly shifting market forces. But more importantly for the long run, will this allow WalrusInk to survive and prosper as a new venture and will our authors feel sufficiently compensated for their work to want to continue writing for us and to recommend us to their friends?

I suspect we'll be making many adjustments to this model as we publish more eBooks, markets continue to shift, technology changes, and eReading habits take some sort of recognizable shape.

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