Disclaimer: All of the information below is based on my personal experience and that of my friends. Your mileage may and will vary.
Question:
So do you get the same per book from an ebook sale? I got a kindle for christmas (which I love) and I have been buying all of my books since then on it. Hopefully I am not screwing over the authors.
Answer:
No, I don’t get the same per book from an e-book sale. I get more.
E-books are a very new format for the publishing and the publishers aren’t quite sure where they fit in the grand scheme of things, so please keep in mind that there is probably a lot of variation in the way e-books are treated. Ace, our publisher, files them under Royalties for Other Editions, a category usually containing Audio books.
The royalty is the same as audio as well: 15% of the suggested retail price, with one small caveat: if the Publisher receives les than 40% of the Suggested Reatil Price, the royalty will be reduced by one half of the difference between 40% of the Suggested Retail and the amount received by the publisher, but in no event can this royalty be more than 1/2 of the amount received by the Publisher.
What does it all mean? It means that if the retailer significantly discounts an electronic edition of the book, we help the Publisher eat the discount.
Should readers worry about that discount when buying e-books?
No.
Why not? Because the royalty of 15% at $6.99 means we get a dollar on each book. $1.0485 to be exact. A whole dollar! That’s twice what we get for a dead tree books. Even if the retailer discounts the e-book to nothing, and the publisher’s cut falls to only 20% instead of 40, we get:
Suggested Retail: $6.99
40% (Publisher’s preferred cut) = $2.796
20% (Publisher’s cut after discount) = $1.398
Our cut: $1.0485 – 1/2 ($2.796-$1.398) = 1.0485-0.699= $0.3495
We still get money, and in our case (this is the breakdown for Magic Bites), that money is not that far from our 6% $0.4194 we get for dead tree books.
This sort of discount almost never takes place, btw. I went to super extreme for the sake of example. If the math is too confusing, just keep in mind that each e-book you buy from Ace equals one dollar that’s going to the author. That is pretty awesome.
Below is an example e-royalty statement. Because e-books are released in a variety of formats, each format gets its own ISBN, the identification number of that particular book. This one happens to be for Mobipocket. Click the image for a larger version.
Why are publishers resistant to e-books?
Warning: I’m not a publisher, so the discussion below is just my speculation.
I don’t think they are actively resisting this new format, but rather uncertain of where it fits. E-books brings with it a host of issues.
First, e-piracy. BNAs, like Nora Roberts, have confirmed that e-piracy negatively affects their sales. And I have to say, although I no longer actively pursue e-pirates, I distinctly recall finding a pirated version of an e-book on one of the sites and reading a reply by one of people who stole it. It went something like this: “Holy crap, I had no idea I could get these books for free. I’ve been paying for them. Boy, aren’t I stupid? This is great.”
Grrrr. Look you, I don’t go into your place of work and slap the and steal widgets you’re making. I deserve my dollar, damn it.
Second, price. Remember that price breakdown we did before? The main cost in producing books is shouldered by the publisher, and the printing costs only account for about 10% of it. That means that it’s only a few cents cheaper for the publisher to produce an e-book than to produce a dead tree book. Yes, when we’re talking thousands of units, a few cents can add up, but when it comes to Suggested Retail for each individual book, especially mass market, that Suggested Retail will be about the same for e-books and print books. But when you and I buy those e-books, we get fussy. Why does this book cost the same as the print book? It’s a damn file.
It’s worse when it comes to hardbacks. I am personally not paying $30 for an e-book. And that presents further issues, which have to do with how publishers really make money and is outside of the scope of this discussion.
This puts pressure on the publishers to discount the books, but they still have to somehow make money. There is a limit to how much profit you can squeeze out of something that only priced $6.99.
Third, formats. I have, let’ see, one, two, three… six ISBNs for MAGIC BITES for e-book formats. And most of them don’t sell that well. Adobe EPub, for example, shows 3 units sold. Three. For the total profit of $3.15. Someone at the publishing house had to pay to register this ISBN and spend man hours converting MAGIC BITES into this format and then sending it to all retailers. The publisher lost money on this format. All these different formats mean additional costs.
And that wraps it up for our e-book bonanza.
Ilona: thanks again for another informative post on publishing. It never occurred to me to pirate someone’s book or music. If that makes me stupid, fine. In the meantime, we all get paid for our work (even if it’s not enough – LOL).
Thank you for your post. I am glad you make more money through e books. Anything that keeps you able to write lol =)
What makes me reluctant to try ebooks is that there are too many questions that I don’t think anyone really knows the answer to.
For example:
in 5 years (or even sooner) most of us turbo readers will be able to fill up an e reader x13. What are we supposed to do with our books? Thumb drives and things like that break/crash.
Also will the format of e books now change, and end up unreadable in a few years?
I know you probably won’t be able to answer these questions. The post just made me think of them because I truly do like the idea of an e reader. I just don’t want to waste money on a fad, or something that I will have to upgrade every 2-3 yrs unless I”m going to get my $$ worth.
OKay I will stop my rant now.
Good night,
Anne
on the kindle (amazon e-reader), you can move read books onto an ‘archive’ file that you can access from your kindle. then, if you want to re-read the book you put into the ‘archive’ file, you simply open the file and select the book. plus the kindle holds up to 1,000+ books on the device alone. it’s unlikely you’ll run out of space
OMG wow. Thanks for this explaination, it was very informative and makes me glad I am trying to get all my books in an e-format.
Thanks so much for the information llona! All the hype with ebooks and ereaders lately brings up a lot of interesting questions. We appreciate you taking the time to answer all our questions!
That was very interesting. I would not have guessed you would make more. I love the ebooks, I adore my reader (grins), but I LOVE the feel of the book in my hands, that new book smell. I can see where piracy is an issue. People really don’t see the big picture, one dollar here and there adds up. Well that and that it’s stealing
They need to get together and make it universal, one isbn, but its all about money I guess.
I will definitely consider ebooks more often. Thanks again for taking the time from your busy schedule to answer these questions.
Coming from small press I’m used to royalty rates of 30-35% on gross rather than 10-15%. Once the book is typeset it isn’t that much work to convert it to most e-book formats (at least according to my former publisher). A block of 1K ISBN’s cost a buck a piece so that’s not a great expense. I know that Fictionwise, Amazon, etc take a hefty cut, but there are no returns, no damaged merchandise to deal with. Once that book is sold, it’s gone. I’m of the opinion that NY is slowly dropping the royalty rate because they know this format is going to eventually directly compete with or overtake print books and they want to ensure they’ve got some profit built in for when that happens.
I’m glad to see the prices on ebooks and audios are a little more. Thanks for the info.
Good to know all my ebook purchases make you a tiny bit more
I think that the problem with ebooks and pricing is DRM. Do I want to pay the same for an ebook as a paperback? Right now, not really because according to amazon I don’t own that book, I am just leasing it. For my favorite authors I absolutely do buy them no matter what and sometimes pay more with an ebook than I would for a paperback. Actually this is very frequently the case with a new release going straight to paperback… the kindle version ends up being 9.99 while the paperback is 7.99/6.99. I don’t take issue with that for authors that I love because you guys and your books are worth it.
But I think ownership is the stumbling block…. people want to be able to buy their ebook and read it on any device that they own. They want to feel like they own that copy…. if they do I think people will have less to say about them being priced the same. They probably want to be able to legally lend that copy out to a friend or two like they would a paperback. They want to be treated like anyone else who is buying paperbacks or hardcovers and not assumed that they are going to upload it to a website for 1000s of people to steal.
So many things to work out and I think publishers are failing miserably right now, but I have hope they will figure it out or Amazon will take over the world *evil laugh*
The president of Macmillan was talking about that very subject (along with piracy) at the Digital Book World conference this week. He had seven specific points regarding piracy and # 4 was: Create a viable consumer marketplace without restrictive DRM.
Once you buy the e-book at a fair price it should be yours to do with as you choose as long as you do not sell it to others. On the other, or those who insist on putting up eBay stores and such and stock them with unauthorized copies, IMHO the world should fall in on them.
thank you for the taking the time to give us this interesting info!!!
so, e-books usually earns you more money. nice to know. personally, I’m a fan of dead tree books, but I also have a few e-books on my eee pc. and it would save loads of space if I ordered more e-books *sighs* h2b keeps on nagging
I guess I’ll be waiting for that flexible e-book-reader thingy they showed on a fair recently.
That you get more royalties from ebooks is good to know. Nearly all of my purchases are now in ebook format unless I intend to get a signed copy or a first edition. Storage issues and all that.
“The main cost in producing books is shouldered by the publisher, and the printing costs only account for about 10% of it.”
It seems like eBooks would still work out better in the long run, in terms of cost to the publisher and for the author. In theory, there is no reason for an eBook to go out of print. The total costs of making the dead-tree version would continue to go up over time and eventually the stores would run out of copies whenever they decide to stop printing. The cost for producing the eBook would be more of a one-time cost, and more easily recovered.
I do love my kindle but I agree Tiffany D above. What happens to my eBooks when the format changes in the future? I will still have my old Kindle of course, but if it dies? I would hope that Amazon, or whoever, would covert the old formats to the new formats but I guess that is something to deal with when we get there.
Though I do like having an actual book in my hand, one of the reasons I got the kindle is to save space (and trees I guess). I have 4 bookcases overflowing with books (which I am NOT looking forward to moving when I get a new house) and I really don’t have room for more.
Regardless, thanks for the article, it was very informative. : )
(Also, my statements above are just guesses, I have no actual knowledge of the eBook business)
Thanks for this. I have an ereader which is great for using on the train, buses or on holidays etc. But they’ll never replace physical books for me. Some of the prices for some ebooks are a bit ridiculous!
I regret that you do not get paid as well for the physical books versus the ebooks but I love the feel of a real book in my hands and get great satisfaction when I look at my full bookshelves or hand a book to my daughter that I read at her age. I would even be willing to pay extra, an “author tax” if you will, to keep the physical books in the market!
I think you should buy books in whatever format you want. Thank you for buying them!
I’m a dead tree enthusiast. I spend so much time in front of the computer I really don’t want to read my books in any way that smacks of work. I adore curling up on the couch with something alcoholic at my elbow and fall into that hole in the page. I will listen to audio books, but then I get impatient to see how the book ends and get the paperback anyway. Most of my books come from the library except for certain authors (like the ones upon whose blog I am commenting). If I fall in love with an author I buy their books religiously. If not, they’re from the library until they make that leap. The majority never do.
I’ll be intrigued to see how the new iPad does for book sales since six major publishing houses are working with them to sell their offerings at $14.99 ea. Of all the e-readers, Apple would be the one to lure me to the darkside even if they don’t have cookies.
I’m a dead tree lover. I’ve tried some e readers and I get a headache using them.
I need a HUGE one. The size of my monitor.
E piracy is so wrong. I have a friend who is now in serious trouble for music and video piracy.
What’s sad is that he still doesn’t get what the big deal is. Hopefully by the time he pays all the financial retribution he’ll have gotten a clue.
There is something special about having an actual book in your hand, isn’t it? I love both.
[...] This post was mentioned on Twitter by kindlevixen, Publisher Guide. Publisher Guide said: On Ebooks | Ilona Andrews: Someone at the publishing house had to pay to register this ISBN and spend man hours.. http://bit.ly/9W9YHi [...]
I buy most of my books as ebooks now. So good to know you make more money . The only downside is I miss the pretty covers
. I wish the kindle had color screen.
Thank you for the informative post. I have tended to grumble about the cost of e-books being the same as a paper copy and your cost breakdown (in the earlier post) is the first proper explanation I have seen.
I’m a bit narked about e-books at the moment because it seems that Penguin have followed Grand Central and other publishers and have cracked down on e-books being bought outside the US. I’ve tended to buy from Books on Board but when I tried to pre-order Archangel’s Kiss it isn’t available in my country (UK). I checked other Ace, Roc and Berkeley titles and none of the ones I tried are available in the UK now.
Sorry you won’t be getting a dollar from me for Magic Bleeds just the 62 cents!
:;Bows::: Thank you for the 62 cents! I appreciate your contribution to feeding my babies.
Seriously though, I don’t understand the ebooks/dead tree book mentality. Books are books. No need for one format to be exclusive.:)
The world rights distribution when it comes to e-rights is very confusing to me. I don’t know enough tosay one way or the other why they are doing the thi9ngs they are doing. I do know that the contracts are extremely specific as to where they can sell the books.
YAY!!! I got a kindle for X-mas and i was worried that the authors might not get their cut. Not anymore!
(by the way; buying brand new E-books from amazon only costs $10 or under vs. $30 retail price)
That is a whole another topic and I am not touching it atm.
actually that isn’t entirely true… usually when a books moves to the best seller list it is less than $9.99….. but a brand new book can still be more than that. I paid $15 for the kindle version of Charlaine Harris’ last sookie stackhouse book because I didn’t want to wait for it to hit the best seller list
Most paperbacks do start out at 9.99 or under tho… its usually the hardbacks that you find higher.
Thank you, Ilona, for that breakdown on ebook costs and author royalties.
I do want to add something to those who worry about access to their Kindle books. One reason why I will never get a Kindle is Amazon’s ideas of ownership and access, in addition to their other problems. 
I always buy my ebooks from other sources and when I do that book is mine and stored on my computer/reader and is not able to be deleted or affected by any other person or company. 
They are MINE!!! LOL
oh so thats how it works.
i recently received an e-reader as a gift. even though i already own all 3 books in the KD series, i bought the digital versions of the books as well so i can have it in my e-reader. your posts regarding the $$ factor gave me new insight into the world of publishing/authors. i had no idea…
Thanks so much for the recent posts on the details of publishing and such. I’m a little less clueless–on that topic, at least. So good to hear that you’re making money on ebooks. I became a Kindle addict after getting one last April, and I was concerned that the authors weren’t getting their cut. Now I can feed my obsession without that fear.
Interesting post.. I would love a e-reader or one of those sweet Apple Notepads that are about to come out. … I don’t know if this is weird or what, but I have a 5 shelf Book case and for me to put a book on said bookcase I have to really like the book and think that I will want to read it again in the future… I go to the bookstore, a lot. So it would be nice to have them on a little e-reader instead of getting stuffed in a Avon box and getting forgotten until I donate them to GOODWILL… But for books that I seriously love, I would still buy the dead tree book.(sorry trees) I get attached to them! My BFF says “it’s weird” She picked my “Magic Strikes” off the shelf the last time she came over and I practically ripped it out of her hands ” NOT my Ilona Andrews!” “Here! How about this A. Lincoln Bio?” (GRIN)
Great post!! This really opened my eyes as far as epublishing vs print. I had no idea the costs were basically the same for the publisher. I personally don’t have a reader so I don’t purchase e-books. I’m old fashioned and love the feel of a real book in my hands!!
Read with interest all of the comments on ebooks…I too was a sceptic but got a Sony touch for Xmas (well a bit before Xmas to be honest) & I LURVE it. It is just so convenient! I am currently lugging around over 100 books with me wherever I go and they all fit in my (admitedly large) handbag!
Must admit tough, that I don’t like the confusing variety of formats and the zoning restrictions that mean I still need to buy Ilona’s books made from dead trees rather than pixels (or whatever ebooks are made from)….takes a bit longer for them to become available in the UK & who can wait?
I’m glad to see more authors talking about e-books, because it seemed to me that authors either ignored them or had an irrational dislike of them. So far, I generally only buy ebooks from Baen, but I’ll have to look at Ace’s ebooks (Just looked, prices seem pretty reasonable, now I have more stuff that I need to buy, yay). I’ve seen varying opinions on DRM, but I personally believe that for the most part, people that pirate books probably don’t buy very many books in the first place (not saying they don’t buy any, because that would obviously be untrue, why would someone pirate something they didn’t want), and unlike stealing a dead-tree book it doesn’t represent a copy that now someone else can’t buy. E-books really do represent more profit all around in the long run, so I think they should be catching on faster. I do not, however, like Amazon’s approach to E-Books. They can just take your books from you, and have done that before when they realized THEY made a mistake. (Anyone tries to take my dead-tree books and they’ll have a fight on their hands)
Just a thought about e-book piracy. I’m “pirating” e-books. There is more than one reason why i do it.
1. I cant wait 4 or 5 weeks until the book shows up here in Europe. I’m too impatient …
2. Buying it as e-book is seldom an alternative. In most cases it is impossible to figure out if there is a DRM on it or not (sorry DRM is a no-go. I wan’t to read my books on whatever platform I want). –> BTW if there is no DRM on it I buy the e-book
3. There is so much trash in the world I just DL randomly books, scan trough a couple pages and if it is not my taste, I delete it. I would not consider this as pirating. It is more like going in a book store checkcing out if the book is good and buying it.
I found “Magic Bites” by pirating the book (I even don’t remember how and where I found it) … guess what? Now I have all three tree-books in my shelf
–> Ilona A. sold 3 books just because a dude posted an e-book somewhere and stumbled over it.
At the end it boils down to one single fact: if the author writes a good book people are buying it. Because they feel the author deserves the money.
I gotta tell you Max, I think you’ve got a lot of balls to come to an authors site and brag about downloading their book for free. I get your rationalizations but if it was me, and I was Ilona and her husband, adn I’d worked my ass off for possibly a year to create it, and I was judged by my publisher for every book sale as to whether I’m worth keeping, and then people steal my work…I wouldn’t like it. In fact, I’d probably write you a hot little letter. When you see how little the authors are getting (basically between .50 and 1.00) a book, and then people are stealing it as free downloads, it is pretty despicable. (I miss that word, people don’t use it much anymore….maybe I’ll bring it back).
I get that you now went out and bought the paperbacks and wow! Bully for you. You stole something, and then you put it back and then you went to the store and bragged about how you stole it.
In reference to Ilona’s original post, I don’t have an ereader yet, I’m hoping to buy one in January, but I bought the first three books via diesel ebooks as an adobe pdf, I see now they don’t have book 4 in that format, probably because of it being such a pain to get an ISBN for something you only sell a handful of. I am bummed though, I’m such a new fan of the series, I’d only bought one ebook before, I just burned through all 3 of the Kate books in 3 days doing instant PDF downloads. I love the feel of a good book in my hands and hope that never goes away but wow…the convenience of downloading a book without going to the store or waiting for it to arrive….It’s been a rush. I’m definitely a new ebook convert.
(PS. I went back through book three right after finishing it, and typed in the word Curran and did a search and then re=read all of their scenes together….yum.
Guess I’m driving to borders tonight to buy book 4. Cause I’m a Kate Daniels addict now. There I said it.
Thank you, Ilona, for giving a cost analysis of publication costs for dead paper books. I’ve not yet taken the plunge into e-books (it’s on the Christmas wish list), but I had been under the assumption that e-book publishing was less expensive than dead paper formats. One thing I failed to realize is that with each e-book reader, there’s a new format; the industry needs to create a standardized format for everyone to use. The problem being, of course, that no one wants to pay patent fees for a specific e-reader format (and there are advantages to having your own system to prevent sharing between different e-reader brands).
The amusing thing is, even when I do get an e-book reader, I’ll likely still buy your Kate Daniels books in print; I’ve already got four of them, and the bookcases would look incomplete without the rest of them. (Even if it is so overloaded with paperbacks (two deep per shelf) that I need to buy yet another bookcase…).
Take care.
Rob H.
Huge Kindle fan since April this year as I have 23 boxes filled with books in my garage, and huge book shelves completely overloaded with books (again). And whereas it is great to go into a bookshp, browse dead tree books, leave again after a successful hunt, and enjoy the feeling of the book. It is equally great not to travel with 31 books in a suitcase for 3 weeks holiday (and have you know who bitch and moan all the time about the weight), and to be able to order the sequels not even 1 minute after you finished the very first one.
Oh, and not to forget. Did anybody ever try to read a book lying on the side? Yeah, way easier with a Kindle
And no, I would never pirate a book. Somehow that would be like stealing a dead tree book. Don’t see the difference.
Casey
I would love to buy this book as an Ebook. Really, I would!
I have a dead-tree copy, and I have copies of the previous 3 books in the .mobi format.
I was an early adopter of the e-ink technology: I love my Cybook.
But!
I live outside of the US. So my money is no good. I cannot legally purchase Magic Bleeds, nor register to download a copy of Magic Slays.
I know that the publisher sets the geographic restrictions, but is there any reason why you can’t follow Lois Bujold’s example and self publish on Amazon UK, so that those who want to can give you £££s?
Hi Funny,
I’m so sorry. Let me paste for you from our contact page:
Our UK publisher is Orion Book (Gollianz.) Click this link to see our page there. As of April 1, 2011, Gollianz purchased the rights for the first 3 books in Kate Daniels series and released them with UK covers, also providing e-versions of the books to UK audience. For MAGIC BLEEDS and MAGIC SLAYS to become available in e-format, Gollianz would have to purchase the rights to those books.
We are so sorry, but we can’t release e-versions of these books on our own.
________
I am guessing Ms. Bujold (who is supreme in all respects, I met her and totally fan girled) has e-rights to her books. We don’t. We have a choice: if we release the books in UK in e-format, we can kiss the print contract goodbye, disenfranchising a lot of readers who only read on paper. Our best bet is to wait if Gollinacz decides to purchase the rights to additional books.
If they don’t, then we will look into releasing e-versions.
I have to admit, I am one of those ‘pirates’ everyone talks about. Where i live, there are no public libraries to check out books from.
So, I download them for free and read them. But unlike most ‘pirates’ if I like the author I am always more than happy to go to amazon or even wal-mart online and order the books for delivery.
Yes, i read the first two kate books for free. and then, I immediately went to amazon and purchased all three of the dead-tree books as well as e-reader rights (Not sure what your profits are for secondary e-reader rights sales) because i felt that the books were worth it.
The problem is…was it clarkes law? that 90% of everything is crap. I made the mistake of buying many well-recommended books (including the more recent books in the anita blake series) That were, honestly, more valuable as grill starter than as books.
So yes, vilify me for ‘stealing’ redeem me for paying, but in the end I plan to keep doing what I have done in the past… let my wallet do the talking when it comes to books. and pre-screen my book purchases, just like i do for netflix and movies.