Re: Re: consequences of shift to ebooks

At 8:11 PM -0500 1/6/08, you wrote:
>On Sun, 6 Jan 2008, auwg wrote:
>
>> Just guarantee me (and my heirs) a percentage of every sale and
>> keep the company books open for sales audits.
>
>Why not ask for a set amount for each sale? I realize the
>percentage is so common it's hardly worth calling it a standard.
>It's more like suggesting an alternative marks you as weird or
>insane.

OK, the cover price for a book is $14.95. The royalty for the book is 10%. So the author gets $1.495 for each sale.

In this case, there isn't any difference -- the 10% royalty and the per copy amount ($1.495) are the same.

What could change it? Only a change in price.

If the price goes up, then the author is better off -- the 10% actually gives the author more per sale.

If the price goes down, then the author gets less.

But, in the US, how often do prices go down?




Perhaps I'm misunderstanding you somehow, but, perhaps the misunderstanding comes from how royalties are paid. US publishers mostly pay a percentage of the cover price, not of the actual sale price to the customer or retailer.



>But the majority of other items produced in quantity have a
>price, not a percentage. I send 100 items to a business and I
>expect one dollar for each. The business can sell them for $10
>and make $900 - risking that nobody will buy. Or they can sell
>for $2 and make $100, being fairly certain to go through them
>all. Wise customers sell out the latter, later customers may have
>to take the former. Or - they can give away 10 free to the first
>few customers on a Saturday to drive business. They can have a
>50% off sale on Sunday, so its not $10, but only $5.
>
>And for every one, I get my $1. Or more to the point, I get $100
>for the bunch, and I don't care which copy earns how much.


Neither does the author of most US publishers. The author gets the same amount -- 10% of the cover price set by the publisher -- for every sale. It doesn't matter if the publisher gave the wholesaler a 50% discount (near what is normal) or charged a premium.


>
>It works for every other thing in stores. WHY does nobody try it?
>
>Is the value of the work so uncertain that authors can't fix a
>price above zero?

Huh? I don't follow what you mean.

The author sells 1 thing to the publisher -- a manuscript. The publisher then turns that manuscript into multiple copies (a potentially unlimited number, really), that it can sell.

The reason that the author generally wants a royalty instead of a fixed payment is because the number of copies is potentially unlimited. Instead of getting $1,000 for his manuscript, the author gets 10% of the $14.95 cover price for each copy that the publisher manages to sell. The only thing that the percentage does is change the amount per copy IF the cover price changes.



>Do publishers simply hold all the power, and
>simply don't want to change established business practices?

Um, except in the case of the largest authors (those most important to a publisher, the John Grishams, Danielle Steeles, etc.) the publisher does simply hold all the power. The author's only counter-balancing power is the ability to go to another publisher. And since most mid-list and lower authors have a hard enough time getting one publisher to agree to publish a book, effectively the author has almost no power.

BUT, this doesn't change the fact that the percentage of the cover price is better than any system I can puzzle out of what you are suggesting.

Perhaps I'm misunderstanding your suggestion. Can you clarify what you mean? How would the system you are suggesting work?


>Or
>are authors unwilling to lose the chance of being a millionare in
>the event their work is far more popular than they dreamed?
>
>There's a key tie-in to ebooks. I can see the outlines of a pure
>ebook business model that says "pay what you think it's worth".
>Some people will pay nothing. Some will pay lots. The two key
>measures are 'number of copies' and 'total money'. If someone
>wants to read first and pay later, its easy. (It does mean no
>more windfall sales or profits from incorrect readers.)
>
>In such a model, the amount per copy - either a percentage or a
>dollar value - is less important than the total value. Ebooks are
>key here, because they have an low per-copy reproduction and
>distribution cost - especially when paired with a non-monetary
>transaction, which lowers the transaction costs. But the
>percentage model - either as seen for authors or as residuals -
>enforces a system that sets a price per copy, yet impedes the
>development of different and potentially more lucrative business
>models.
>
>:: chris smith ::::::::::::::::::::::::::::::::::::::::::::::::::
>:: nihil tam munitum quod non expugnari pecuna possit - cicero ::
>

Interesting idea.

I'm not sure whether it will work. I do agree that ebooks are important to this idea -- the low per-copy reproduction and distribution cost could make it work.

But, comparing it to a more traditional model -- where each copy is sold for a fixed price -- I suspect most authors and publishers will see greater income from the traditional model than from the model you propose.

To be certain about whether or not it is true, we would have to do extensive tests. I'd love to see the results.

Kent








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