From the press release:
In the wake of continuing debate between publishers and authors regarding the establishment of fair and reasonable royalty rates for the emerging E-Book platforms, Hannover House has announced today a new standard rate of thirty percent of E-Book net revenues for authors. This new rate for all Hannover House authors surpasses the current industry standard of twenty-five percent E-Book royalties being offered by most major publishers. Hannover House is the entertainment and publishing division of Target Development Group, Inc. (PINKSHEETS: TDGI).
Initial E-Book releases from Hannover House will launch in June, and include two non-fiction titles from author Barr McClellan, and two fiction thrillers from author Vivian Schilling. McClellan’s “Made in the USA” was published in hardcover format in March of 2010, and his New York Times Bestseller, “Blood, Money & Power: How LBJ Killed JFK,” was originally published in September 2003. Schilling’s acclaimed thriller “Quietus” was originally released in hardcover format in January 2002, and her debut thriller “Sacred Prey” was originally published in September 1994. Both “Blood, Money & Power” and “Quietus” have sold more than 100,000 units each in various print formats, and are expected to be significant sellers again once released on the various E-Book platforms.
“It was important for Hannover House to make a statement that we stand with our authors in support of fair and reasonable royalties for new media formats,” said Eric Parkinson, C.E.O. of Hannover House. “E-Books provide publishers with greater efficiencies and lower costs of production, freight and storage, so it only makes sense that the author’s share should increase, not decrease as other publishers have claimed. If we don’t compensate the authors fairly for these emerging formats, the publishing industry will jeopardize the supply of quality material by removing the financial incentives for authors.”
The launch of Hannover’s initial E-Book titles will be promoted with ads in the New York Times Book Review, Publisher’s Weekly and multiple internet sites targeted to reach avid readers.
“These royalty rates will not jeopardize the profitability of our publishing division,” said Parkinson. “We believe that paying a fair royalty will build author loyalty as well as encourage other, established authors to consider Hannover House for their future publishing needs.”
”E-Books provide publishers with greater efficiencies and lower costs of production, freight and storage…”
Ah, a publisher that finally admits it.
I’m glad that they’re giving their authors more, but that doesn’t help the consumer. Where is the reader’s share of that greater efficiency?
I’ll stick with indie authors, thanks.
I am always mystified by the way Authors accept this kind of standard across the board rate.
If the publishing business was being managed properly and efficiently, the royalty rate should be set differently for each author and for each title. After all the royalty rate should be calculated based on a combination of the risk/reward of that title mixed with the advance being paid.
Established writers with proven track records have proven that the risks of expenditure on their title is very low and therefore they have a right to expect higher royalty rates, unless they are demanding huge advances.
Similarly new writers without a track record are inevitably high risk. This makes expenditure by the publisher on that title equally risky and in the event of sales being successful, the royalty rate deserves to be lower.
I guess the reason is has been accepted is that publishers have been the gate keepers.
But not any more … which makes is amazing to me that with all of the choices now open to authors, why would they accept this kind of blanket treatment ?
Howard – your confusion confuses me. AIUI the level of advance _is_ very variable. It’s much more natural to adjust the advance to reflect this “risk” factor, no?
Not only that, I read that some royalties _do_ operate on a sliding scale. So much for the first X hardcovers, and then raised higher for subsequent sales. So it doesn’t need to be an all-or-nothing affair.
It’s not as if publishers are _obviously_ utterly doomed, and they no longer function as gatekeepers _at all_. 90% of book sales are still of dead trees! And beyond that, I damn well do want _some_ gatekeeping system – maybe you call it a recommendation system instead, but it’s still there. So I think it’s obvious why many authors are sticking with what they know, and waiting to see what happens in the future.
But hey, this is the internet. If you want to spout off, there are no gatekeepers to stop you acting as an illustration that Sturgeons law still applies to this brave new media :-P.
P.S Howard: a tip: your comments would be easier to read if you used paragraph breaks (press enter _twice_).
Hey Alan – I understand perfectly. You have nothing really worthwhile to say, so abuse is your last resort.
Thanks for the formatting advice ! It is appreciated equally well.