I took this post from author Dave Freer, a man I highly respect. It discusses his opinion of e-books and the current royalties situation. It is very informative and, I believe, help prevent authors from getting shafted whenever an e-book is released. I’m a fan of the Eric Flint model… cheap, non-DRM formatted e-books for someone to share. Hell, if someone loves the book after getting it for free, there’s a decent chance that the person will buy your next book. Or better yet, pay for the paperback version of the e-book. Or *gasp* buy the hardcover.
You cannnot distrust your consumers. You have to entice them. They owe you nothing, after all. You write and publish to entertain them. This is how the RIAA isolated the music industry from reality.
Dave Freer writes at http://davefreer.livejournal.com/99217.html:
It appears the tree of greed and short-sighted insanity is well watered right around the world. Here we have car prices going UP – an average of 11.3 % I believe as sales fall throught the floor. Or as for e-books (http://www.ereads.com/2008/10/random-house-changes-e-book-royalty.html). Sigh. Firstly as demand is increasing, it means you can bring your prices down, secondly, as some of the major expenses – namely, printing, paper, warehousing, physical distribution and RETURNS – are not a factor. Costs actually compare VERY favorably to the costs for other media, and therefore the rates of payment to authors and costs to public could both be very much improved. Fortunately Baen so far anyway have no part in this, and I hope they keep it that way. They pay a better % too.
The shortsighted result of this is very obvious — already established well-known authors are thinking… well, they could really do this without the publisher. Instead of accepting 12.5% and falling… they could have 50% and pay some editor to work for hire and pay a cover artist (and get to CHOOSE their cover art), and get off-site storage for next to nothing, and probably come out with say 45% of the take. The next move I predict from publishers is going to some form of ‘only we have the rights to sell your e-books in perpetuity’, especially aimed at smaller authors and newbies who are in a poor position to resist. I hope we get some form of authors’ collectives next to cut retail and advertising costs.