Authors Guild Denounces “Inadequate” E-book Royalty Rates That Favor Publishers

July 15, 2015

The Authors Guild’s Fair Contract Initiative, an outreach effort to “restore balance to the author-publisher relationship,” reported “inadequate e-book royalties” that unfairly favor publishers, according to Publishers Weekly.

“At the heart of our concern with the unfair industry-standard e-book royalty rate is its failure to treat authors as full partners in the publishing enterprise,” one of the Guild’s statements reads. “This will be a resounding theme in our initiative; it’s what’s wrong with many of the one-sided ‘standard’ clauses we’ll be examining in future installments.”

The Guild’s analysis showed that while authors receive about 50 percent of profits on their print books, they only earn 25 percent to publishers’ 75 percent for e-book profits. This imbalance stems from a watershed moment in 2004 when Random House, which had been paying 50 percent of e-book revenue to authors, changed its rate to the 25 percent level, the Guild reports.

The report acknowledges that Amazon has put pressure on publishers’ profits by seeking discounts on e-books; however, authors, as a group, are struggling to make ends meet. Writing-related income has decreased between 24 and 30 percent over the last five years, and furthermore, authors who have been writing for between 25 to 40 years have seen the greatest decrease in income, from a median of $28,750 to $9,500.

“While there are many reasons for this decline in income,” reads the statement, “unfair terms in publishing agreements don’t help. Notably, during the same period, publishers’ revenue has seen steady annual growth. There’s something very wrong about that disparity.”

The Guild has called for a 50-50 split in e-book profits, because “the traditional author-publisher relationship is essentially a joint venture.”

“We hope that established authors and, particularly, bestselling authors will start to push back and stand up to publishers on the royalty rate—on behalf of all authors, as well as themselves.”


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