Screen shot 2010-07-26 at 10.05.35 AM.pngFrom the Authors Guild site:

We don’t know the details of the Odyssey-Amazon agreement, but we can make some informed guesses. The agreement is most likely under the agency model, with Amazon paying Odyssey 70% of the retail price of the books. Wylie and Odyssey are together taking a typical agent’s commission as compensation: 10 or 15% of the 70% received from Amazon. In round figures, this means that the author receives 60 to 63% of the retail price of the book.

For comparison, a typical contract with a traditional publisher pays e-book royalties of 25% of net proceeds. If the e-book is sold under the agency model, the author’s share is 25% of 70%, or 17.5% of the retail price of the book. After the agent’s commission, the author receives roughly 15 to 16% of the retail price of the book.

For a $9.99 book under the Odyssey-Amazon agreement, the author would receive royalties of $5.94 to $6.29 per book, net of all commissions. For a $9.99 e-book under a typical contract with a traditional publisher sold under the agency model, the author would receive royalties of $1.49 to $1.57, net of all commissions. The difference is about $4.50 per unit, a 300% increase in author income.

The Authors Guild clearly doesn’t like the Amazon arrangement, by the way, as can be seen from the article posted right after this on their site: Wylie-Amazon: Publishers have largely brought this on themselves. Amazon exclusivity is a major concern. That article makes four points: 1. it applauds Wylie for facing down Random House on ebook rights, pointing out that Random House already lost this battle once; 2. feels that there are serious potential conflicts of interest when an agency acts as publisher; 3. Doesn’t like the exclusivity part of the agreement and feels it gives an already too powerful Amazon more power and 4. feels that publishers have brought this on themselves by being so stingy with ebook royalty rates.

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