In today’s Apple 2.0 blog at Fortune, Phillip Elmer-DeWitt has rounded up the latest rumors on the unicorn-like Apple tablet device. Read Apple tablet set for spring launch for the details. This is the first collection of tablet rumors that include details of what the cash flow deal will be with publishers for ebooks, and the numbers are right in line with our agency projections for the past two years.
Currently the Kindle Portable Bookstore device has kept 65% of the retail price for e-books giving authors ultimately only 15% of 35% for electronic editions of their works. That’s a 5% royalty on an ebook sale where no physical product is involved. It has always been our agency position that authors should get at least 33.5% of the retail price of an ebook sale, sharing a third each for Publisher and Retailer. The Fortune story also quotes a Wall Street Journal story that Simon and Schuster and Hachette are holding off on e-books, you can read that through Fortune or here.
Today’s e-book market is the wild west with publishers making corporate edicts that they must control e-rights, will never revert titles kept available on some spinning disk somewhere and offering a pittance to the authors. The publishers are not totally at fault; they are greedy but they didn’t think up this mess alone. E-book channels are murky and schoolyard bullies who make devices and try to sell electronic books either demand large shares of the cash flow or tie the works to their proprietary devices. The agent’s and author’s business challenge has been to cope with publishing deals in which we are offered 10-20% of the “net” when the net is computed behind a closed door that even the publishers cannot always see behind. The Apple model should clarify things a lot.
More as we learn it.