Romance, Historical, Contemporary, Paranormal, Young Adult, Book reviews, industry news, and commentary from a reader's point of view

Do Exclusive Publisher Portals Make Sense?

Note: I mentioned below that several ebook vendors were having big sales this week including BooksonBoard.   I read the BoB promotion to require a minimum of $100 to get the 50% rebate.   This is not accurate. There is a 50% rebate/reward for each book purchased through today regardless of what you spend.

Arstechnica, one of my favorite tech blogs, had an article up last week about EMI’s decision to open an EMI only music store. Ars argued that an EMI only music store was doomed to fail for two basic reasons

  1. most music customers don’t know the label of their favorite musician
  2. music buyers want to find their favorite music easily and in one place. “Research has shown that when consumers are looking for music they want it all in one place.”

These assumptions don’t necessarily carry over to the niche romance ebook reading market. Ellora’s Cave has a brand name in erotic romance of which most ebook readers are aware. For several years, EC was really the only game in town and thus it made sense to drive readers to its exclusive portal. But the ebook market and ebook publishing has evolved since 2001, the birth of Ellora’s Cave. There are over 60 epublishers in business today. Fictionwise, eBookwise, BooksonBoard, eReader, Mobipocket, All Romance eBooks, and Kindle serve as legitimate retail outlets for ebooks.

There is a push from major forces in the entertainment industry such as Amazon and Sony to increase ebook reading. Even the iPhone has created still another avenue for ebook readers. But Amazon, Sony, iPhone, Fictionwise, eBookwise, BooksonBoard, eReader, Mobipocket, and others have one thing in common. They still do not sell every ebook published today.

Part of that is due to self imposed limits. For example, Fictionwise “partners with publishers who can provide 25 or more titles by at least five different established, professional authors.” But some of the problem is that e-publishers are self limiting. Ellora’s Cave, for example, does not list its titles at any other vendor. The only way to purchase EC books is directly from the EC site.

EC’s webtraffic, according to one independent metric, has a ranking of 55,719. Fictionwise.com has an Alexa rating of 30,164. In a google search for “romance ebooks”, All Romance eBooks shows up first. The first epublisher to show up in that same google search is Alinar Publishing followed by Liquid Silver. I browsed through the first ten pages of search results. Ellora’s Cave didn’t show up. Neither did EC show up on any of the paid advertisements that appear on the right hand side of the search results

What about the search term erotic romance? Ellora’s Cave is missing from the first page of those search results. Hot romance reads? New Concepts shows up. Sexy romance reads? Amazon. BDSM books? Nope. BDSM romance books? Nope (DearAuthor has the second link on this search result).

Erotica ebooks is the first search where EC appears and it’s the very last of the front page search results. Liquid Silver shows up before EC. How about “romantica ebooks” since EC has trademarked that term? Diesel eBooks, an etailer, shows up first.

Apparently part of the reason that EC books do not appear on websites like Fictionwise.com is due to the fact that these e-vendors take a high rate of the royalty.   Fictionwise, it is reported, takes 50% of a small print publishers royalty. If a publisher’s contract does not take into consideration third party retailers, then the publisher’s cut is reduced decreasing its willingness to see sales escape from its exclusive portal.   But the question is really whether the loss of sales from lack of widespread distribution is made up by increased royalties at the exclusive portal.

Obviously, that is not an answer that I can give hard numbers to as I don’t have sales figures from Fictionwise and an ebook publisher to compare.   Anectodotal evidence given in this thread suggests both that authors are better off being sold through a publisher’s exclusive portal and that the widespread distribution means better sales overall.

I can say from personal experience that I would buy more Ellora’s Cave books if they were made available at Fictionwise or some other retailer and it is because, as stated in the ArsTechnica article, I like a one stop shopping place.   More and more e-vendors are building up loyalty programs to encourage readers to buy from one store. Fictionwise has its micropay rebates.   BooksonBoard and eReader have reward dollars.   These programs are designed to reward customer loyalty by giving back a percentage of a sale to use toward a future sale.

Further, e-vendors offer sales and loss leaders to encourage more purchasing.   Fictionwise has its weekly 100% micropay rebate offers whereby you get the entire book’s purchase price rebated back to you in the form of a credit to be used later.   Currently Fictionwise, eReader, and BooksonBoard* are offering 50% rebates on their entire catalog of books.

No epublisher’s exclusive portal offers these constant discounts, not even Harlequin who does offer the occassional coupon.   These vendor promotions do not decrease an ebook author’s royalty as the promotions are absorbed by the vendor.   But sales and promotions do increase reader purchases.   How many Ellora’s Cave authors are missing out on sales at these vendors during these promotions?   That is true for any number of epublishers who don’t have their entire catalogs on these e-vendor sites.   (I.e., Josh Lanyon’s book, Death of a Pirate King, still is not in the Fictionwise or BooksonBoard catalog).

K.Z. Snow commented that epublishers might strike a balance by driving traffic directly to the publishers exclusive portals for the new releases and allowing the old releases to gain new readership by allowing those to go to the third party vendors.   I think that is what is happening with Lanyon’s book. But for this one reader, I won’t be buying the book from Loose Id’s site.   I’ll wait for it to show up at Fictionwise where I am flush with micropay rebate dollars I’ve earned from previous purchases.

When EC was the only erotic romance epublisher in town, selling your books only at Ellora’s Cave made sense. Seven years later, does exclusive publisher portals mean more money or lost sales?

*The 51% rebte applies for purchases totaling $100 or more.   For those who do not like the rebates and rewards programs, the normal straight discounts will return after this program ends.   BooksonBoard also allow readers to get Rewards Dollars on purchases made exclusively with Rewards Dollars, a double-dipping option not available elsewhere.

Jane Litte is the founder of Dear Author, a lawyer, and a lover of pencil skirts. She spends her downtime reading romances and writing about them. Her TBR pile is much larger than the one shown in the picture and not as pretty. You can reach Jane by email at jane @ dearauthor dot com

54 Comments

  1. Alessia Brio
    Oct 12, 2008 @ 06:16:23

    As a reader, I want that one-stop shop. I buy ALL of my non-romance/non-erotica ebooks and SOME of my romance/erotica ebooks from Fictionwise. That micropay rebate is a HUGE incentive for me. I have to REALLY want an ebook to go to a publisher’s exclusive portal. That doesn’t happen very often. I just don’t want to mess with another account, another password, and another place that stores my personal information.

    As an author/editor, I’ve found that readers who really want my work will go to the publisher’s site during the first week of release, then direct sales drop WAY off. When the book hits Fictionwise a week later, all the readers who aren’t (yet) rabid fans pick it up there. My sales from third party distributors are consistently better, especially backlist titles.

    Same with print & Amazon, really.

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  2. Shiloh Walker
    Oct 12, 2008 @ 07:47:10

    This is something that’s been discussed among EC and its authors. I understand the desire for having titles available elsewhere. And likewise, I can tell you I cringe when I hear that p[laces like Amazon and Fictionwise want to take a 50% cut from my royalties.

    This wouldn’t be bad if it opened the door to new buyers, but I think there are concerns that established buyers would start going to the other portals and THAT would hurt. I don’t know if there would be enough sales on the other portals to make up having my earnings cut into.

    I’m hoping there are options yet to be explored.

    Perhaps if more readers were to make EC aware of their wish to see EC titles at other sites, they might be more open to it.

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  3. Jayne
    Oct 12, 2008 @ 07:55:13

    Well, I just dropped over $100 at Fictionwise. A) I managed to clear out a lot of my wish list (lurve! that feature) and B) I loaded up on a lot of micropay dollars for future purchases.

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  4. GrowlyCub
    Oct 12, 2008 @ 08:17:32

    Pros of Fictionwise:

    rebates and micropay,
    wish list,
    bookshelf (books can be downloaded forever),
    ability to download a book in several different formats (if it’s multi-format)

    EC and other exclusive portals tell you you are out of luck if something happens to your copy/computer.

    Cons:

    reduced royalty for authors,
    most books cannot be printed,
    read aloud is often disabled,
    FW sells DRM’d books

    Jane, I was interested to see you say that the current 50% FW promo does not affect author royalties, but is absorbed by FW. I was told by authors whose titles are listed on FW that they see only their cut from the actual dollar figure that FW charges for the ebook on the day of sale. Maybe I misunderstood?! Maybe they did?

    If it’s indeed the case that FW absorbs the promo and rebates, I’ll feel better buying there, which I have not on occasion because I wanted to make sure the author got the highest cut.

    I have to admit that my direct portal ebook buying has pretty much completely disappeared lately because the prices have become so unbelievably inflated (overall I’m buying fewer ebooks as well).

    e-Publishers keep claiming they are charging at or below comparable print titles, but that’s just not true (my benchmark are Silhouette/Harlequin word counts/category title prices).

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  5. Peggy P
    Oct 12, 2008 @ 08:19:08

    I’m like Jayne – I just loaded up at Fictionwise and you can’t beat this sale right now. I’m eagerly waiting to read Josh Lanyon’s newest Adrien English story but that’s the keyword, waiting, until it’s available at Fictionwise. I don’t feel like setting up an account at Loose ID for this one purchase.

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  6. Teddypig
    Oct 12, 2008 @ 08:36:51

    Add to the list that Fictionwise allows people to buy eBooks for their friends.

    If the ePub allows it, they provide multi-formats of the eBook in the purchase something I have noticed several ePubs HAVE STOPPED allowing which irritates me to no end.

    I think the major point is that Ellora’s Cave has no experience in providing these services or the type of customer service I expect even on their own site but they are talking about taking 40%.

    I hear people debating the fact Fictionwise wants up to 50% royalties for providing all these unique services that attract customers willing to shop and try out new authors.

    Fictionwise frankly does it better than even Amazon.

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  7. Emmy
    Oct 12, 2008 @ 08:44:45

    I just want to get quality products for less money. If I have to spend 3 hours walking around different shops at the mall, I do it. If going to an outlet is faster, that’s where I end up.

    It’s the same thing with books. If I can get them for less on Amazon or Fictionwise, that’s where I go. However, I have multiple ebubs bookmarked and I’m just as happy to go there for books. I spend a lot of time browsing the ‘coming soon’ areas anyways, and tossing things into wish lists for later purchase on release dates.

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  8. cecilia
    Oct 12, 2008 @ 09:06:01

    Jane, I was interested to see you say that the current 50% FW promo does not affect author royalties, but is absorbed by FW. I was told by authors whose titles are listed on FW that they see only their cut from the actual dollar figure that FW charges for the ebook on the day of sale. Maybe I misunderstood?! Maybe they did?

    Technically, they are charging the regular price – in other words, the person buying it pays the full price. They just get a credit in Micropay for the 50%. I assume that this is what FW is absorbing. (In August, they had a special for the 5-year Buywise members of 100% rebate on all their books, and I doubt that their whole catalogue of authors were getting zero royalties for all those books.)

    Personally, I’ve been buying more and more from FW and less and less from the e-pubs individually. For one thing, because of their specials, I have an electronic TBR pile of about 40 books, and a few hundred Micropay dollars. I can definitely wait for books to appear at FW, and the convenience of using the credits for small purchases is not insignificant.

    The difficulty of finding EC via Google was interesting, but I would wonder how many people would look for them that way. That is, how many readers of e-book romance don’t already know about them? For myself, they were how I discovered e-books in the first place. I ordered an EC tree-book because of an Amazon recommendation, and then read their blurb about e-books at the end. And my life of impulse book purchasing officially began.

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  9. Teddypig
    Oct 12, 2008 @ 09:23:29

    Oh and Fictionwise takes paypal!

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  10. Emmy
    Oct 12, 2008 @ 09:26:42

    I ordered an EC tree-book because of an Amazon recommendation, and then read their blurb about e-books at the end. And my life of impulse book purchasing officially began.

    That’s pretty much how I found ebooks too… except I was spending days at Borders, way back when I was a broke student and using Borders and their coffee shops as my own personal library. Loved sitting in their comfortable chairs all day sipping macchiatos and reading books I couldn’t find at the library.

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  11. Keishon
    Oct 12, 2008 @ 09:47:33

    Like Jane, I am flush with micropay dollars and a hat tip to her for giving us the heads up about this Fictionwise 50% off sale! I still can’t clean out my wishlist since over half is in mobipocket format(grrr). As to shopping at other venues, I find the checkout process a headache. As Jane mentioned in her article, I’m a one stop kinda girl. I like all purchases at one place where I can spend my micropay money, honey.

    Have a good day all.

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  12. Jane
    Oct 12, 2008 @ 09:47:56

    @cecilia: yes, my understanding is that the vendor, be it Fictionwise or BooksonBoard, absorbs the promotions and that the author is paid a royalty on the retail price, not the discounted price.

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  13. MB (Leah)
    Oct 12, 2008 @ 10:24:16

    What I’m a bit confused about is if the original publisher, like Samhain, is the one who takes royalty cut when selling through sites like Fictionwise, or if the author does as well?

    If I buy direct from the publisher, doesn’t the author get the most amount of their royalties? I was under the impression that the author’s royalties are cut if their books are sold through Fictionwise and such.

    I’m one of those people who would like to support new, or barely established authors by buying direct through the publisher even though it is a pain to have all of these accounts and will cost me more.

    Another reason that I buy direct is that most epubs I buy from offer non-DRM formats. Whereas, Fictionwise sells books I want, but in formats I can’t use on my eBookwise, which is weird because eBookwise is a Fictionwise company.

    That said, of course I much prefer one-stop shopping and have no problem about buying books of more established authors in this way. Mostly though, I skip over Fictionwise for the reasons I gave above.

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  14. Anion
    Oct 12, 2008 @ 11:20:05

    What I'm a bit confused about is if the original publisher, like Samhain, is the one who takes royalty cut when selling through sites like Fictionwise, or if the author does as well?

    If I buy direct from the publisher, doesn't the author get the most amount of their royalties? I was under the impression that the author's royalties are cut if their books are sold through Fictionwise and such.

    The author takes a HUGE cut, in my experience (I don’t know if the publisher does or not). A single book sale on Fictionwise earns me pennies, as opposed to a single book sale on the publisher’s site which might earn me a dollar or more.

    I don’t have any of my old royalty statements from the publishers who sold my books on FW, but I remember very clearly being absolutely stunned by how little money I actually made vs. the number of books sold there.

    ETA: Some of my mmp books are also listed on Fictionwise, and I’m perfectly happy to have those titles there, as my publishers don’t have an ebook portal of their own (afaik). It’s not that I hate Fictionwise, at all–I’m very happy my mmp books are available as ebooks and Kindle books because I want people who prefer ebook to be able to read them, and it’s a kick to be a Fictionwise bestseller even if it doesn’t mean much in terms of sales. :-) It’s simply that for ebook-exclusive titles I make a lot more in books sold on the publisher’s site, so don’t like the idea of my ebook-exclusive titles being on FW.

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  15. Angelia Sparrow
    Oct 12, 2008 @ 11:29:20

    I’m looking at a contract right now.
    I get 35% royalties on the publisher site and 25% on the distributor sites.

    What does this mean?

    I’m checking Fictionwise and running the numbers for my second-best seller these last 14 days (the first is an anthology). This piece has been a steady seller for the last year and a half. If it was publisher-site only, I might sell one or two a quarter this late in a story’s lifespan. I sell about 10 a quarter through distributors. I make 50c/copy, as opposed to 69c from my publisher’s site. In short, I’ll take the extra $5.

    The breakdown goes like this:
    $3.99 cover price (up 4c from pub site)
    2.00 to Fictionwise
    1.00 to publisher, who pays the editor and cover artist
    .99 split between Naomi and myself.

    Ellora going through distributors would cut the royalties some. But since distributors more than double my sales, I’d be willing to take the cut.
    35% of 700 books? ($1100) Or 35% of 700+25% of 1000? ($2200). (1000 is a projection based on comparisons with Phaze numbers)

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  16. Robin/Janet
    Oct 12, 2008 @ 11:44:01

    I am not really concerned with making sure the author gets a bigger royalty cut when I decide where/how/in what format to purchase a book; I don’t think that’s my burden to bear as a reader. I FAR FAR prefer purchasing books from a site like BOB or Fictionwise than from a publisher’s website. And because I have so many books to read currently, I am even less interested in searching out books on publishers’ websites, even if I am hankering for a certain book (I often end up waiting until the book lands on BOB or Fictionwise). If, for example, EC starts etailing other publisher’s books, I will not be more inclined to purchase there.

    In book buying, I want some combination of convenience and price most. One stop purchasing, desired formats, competitive price, first and foremost, rewards program next. Ultimately, of course, authors and publishers have to make up their own minds about whether to sacrifice more royalty money for potentially higher sales. But I tend to believe that most readers are more loyal to their own priorities than to any given publisher or author, and that limiting sales options and forcing readers to split their attention contradicts the reader’s basic self-interest, and perhaps, the authors’ and publishers’, as well.

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  17. Anne Douglas
    Oct 12, 2008 @ 12:36:25

    I can give an exact example of the differences for the authors:

    Position Vacant sells for 3.99 at Loose Id and FW. If I sell a copy at Loose Id I make $1.40. At Fictionwise $0.45. These numbers come right from my last Statement. I make a percentage of what ever LI gets from FW, NOT the full face value at FW.

    (Since many ePublishers do use the EPIC contract as a basis here is the basic clause from EPIC’s site:

    For readable digital formats: Publisher will pay Author a royalty, in U.S. dollars, of ____% of the U.S. Retail Download Price, for sales of the Work at the publisher’s website. For digital books sold through outlets requiring distribution discounts, Author and Publisher will divide the net price after discount equally between them.)

    Now at this point this particular story outsells LI’s site (been avail nearly 2 years so it’s very much into the longtail there) so yes, FW makes me more(been available about 6-9mths)

    Like Robin/Janet, until I became an author I really didn’t give two hoots about ‘where the author made the most money’, it wasn’t even on the radar, so I totally understand that side of the argument, and in fact I don’t believe it really is something the reader should worry about. Although, all you readers who do, thank you, as my author side does worry :)

    So, to secondary retail or not? Personally I don’t mind doing a little window shopping, so it’s a mix of FW and Publisher websites that I trust. But from the author perspective I think I like the idea of having the first 3-6mths on the pub website, then the re-release on FW. It makes me more money.

    At this point though I’m not a dedicated FW/ARe etc girl – but now that I have a Sony reader, and I’m at a point where my book buying budget is no longer at 0, I might well be :)

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  18. Jane
    Oct 12, 2008 @ 12:48:22

    @Anne Douglas – I don’t doubt that you are correct that you make royalty based upon what Loose Id makes. It’s just that I don’t know that makes much sense for the author. I understand taking a lower percentage royalty off the retail price but not changing the royalty based on the amount that the publisher takes in. It’s a way of shifting all of the risks, again, from the publisher to the author and in exchange for what?

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  19. Lynne Connolly
    Oct 12, 2008 @ 13:09:44

    I like LI’s idea of selling exclusively from the site at first, then moving to other vendors.
    One of the things about the EC books is their exclusivity, and I have to say that my EC sales are holding up very well – they must have a core group of buyers who visit on release days, because my EC sales are still higher than the sales at other houses. I wouldn’t like to lose that exclusivity, but it would be an interesting idea if they put older books on other sites, after the initial rush of buyers.

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  20. veinglory
    Oct 12, 2008 @ 13:12:44

    I think distributors are fine, but I still make the lion’s share of my money from epublisher’s own site sales. Romance readers are still, it seems, very brand oriented. So being an effective romance publisher still largely means selling for the publisher’s site. I think Loose Id’s plan of splitting the difference (delayed release off site) is the best of both worlds.

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  21. Anne Douglas
    Oct 12, 2008 @ 13:17:12

    Jane: If I understand you correctly, you are asking if it makes viable monetary sense to an author to be filtered through a secondary retailer? No, it really doesn’t, as I understand it. I make much more selling directly through the initial retailer. (Which is the reason I like the idea of releasing to secondary retailers 3-6mths after original release)

    But then, 35% of 0 is 0, and 50% of the net/gross proceeds from a secondary seller might be a third of what I’d get directly, but it’s a third more than getting nothing. (okay, I suck at making mathematical analogies…)

    It also gives you greater exposure, and that is one of those things that is sort of a bit priceless – a bit like goodwill, totally intangible, but very crucial to your success.

    So what it comes down to is for the reader, secondary retailers are good. They get their books for cheaper and potentially in one place, but they might have to wait for them. For eAuthors at least (I can’t comment on Trad pub contracts) secondary retailers are bad for their bottom line, but in terms of exposure to new readers are worth it.

    Total sideline and total publisher pimping – LooseId has a ‘club’ like FW where you can buy in to receive a 10% discount on all your purchases. So you don’t HAVE to go to secondary retailers to get percentage off benefits in some cases.

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  22. Robin/Janet
    Oct 12, 2008 @ 13:32:51

    I have a question: do traditional (New York) print authors make different royalty rates depending on where their book is sold?

    I get that the royalty system is now set up to give authors a smaller royalty on books sold at other distributors, but, like, isn’t that the publisher’s doing? And, like, couldn’t they restructure things so that authors got the same royalty on books no matter where they’re sold? I realize that would mean less money for the publisher per book on books distributed elsewhere, but in the current scenario it seems that the publisher is protected far above the author to the point where the author is basically being penalized twice. That is, authors are penalized in terms of royalty rates for sales on secondary distributors and in terms of the potential audience they might gain by having their books more widely distributed. And yet the publisher loses very little, comparatively speaking.

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  23. veinglory
    Oct 12, 2008 @ 14:25:41

    If a distributor takes 50% I think it makes sense for publisher and autohr to split what remains by the same proportion as from own site sales. I mean the publisher needs to make their money for the whole thing to work–and the profit margins aren’t that enormous even for big NY presses.

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  24. Robin/Janet
    Oct 12, 2008 @ 14:49:02

    If a distributor takes 50% I think it makes sense for publisher and autohr to split what remains by the same proportion as from own site sales.

    This is between the author and the publisher, IMO. What gives me pause is the way that the disadvantage to the author is, IMO, sometimes passed on to the reader vis a vis subtle (and not so subtle) pressure to support the author’s royalties by purchasing from the publisher’s site. IMO the reader should *never* have to bear the burden of the author’s deal with the publisher. Never.

    Also, simply looking at this from the perspective of an outsider, I can’t help but question the way that authors view the distributors as the problem here. Again, isn’t this all part of the negotiation process between author and publisher? Publishers want the most money possible, and authors want the most money possible, and they negotiate to — hopefully — optimize both their interests. So IMO it’s not that distributors want to or are cutting into the royalties of authors but that authors are making deals with publishers that cut into those royalties should the author seek wider distribution and — ideally — more profit from their books via that distribution.

    And when it comes down to the deal publishers strike with distributors, again, this is a contract issue, as well, one that publishers seem more than willing to burden their authors with by passing it on to the author (who then must appeal to the reader). Authors may have no say in the deal publishers strike with secondary distributors, but they sure as heck have a say in the deal they strike with publishers. And I can’t help but wonder whether authors being less willing to accede to these deals might incentivize publishers to either make better deals with distributors or make better deals with authors — deals that focus more on profit through broad distribution than through the publisher making more on the author by restricting access to the book. This might require epubs to reconsider their own business models, but maybe it’s time for that, too.

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  25. GrowlyCub
    Oct 12, 2008 @ 15:08:13

    Robin wrote:

    IMO the reader should *never* have to bear the burden of the author's deal with the publisher. Never.

    I think this is the first time I am disagreeing with Robin, grin. I do agree with the idea that I shouldn’t have to worry about how much the author takes home, but:

    I’d make the analogy of folks buying books at their Independent bookstores instead of chains or online. When you do that you pay more (like when you buy directly from an e-pub), but you also support variety, small presses, mid-list authors and those indie bookstores (aka small businesses) that way.

    start tangent/ And I’m most certainly worried about what these huge publishing conglomerates are up to. They sure as hell are not fostering mid-list authors nowadays. I wonder what they’ll do when the Roberts, Pattersons, Clancys and Kings of the world die. Who will the new bestsellers be? More Stephenie Meyers? shudder/end tangent

    Yes, I want to save money and I do it for the most part, but there are occasions where other considerations make it worthwhile to spend a larger amount upfront in goodwill (and I mean that in the economic definition of the word, not between me and authors) and towards the future.

    If Anne or Jules make only a third from FW sales and the higher sales there do not offset the difference in royalty amount, and they stop writing as a consequence, I’m the poorer, even if I’ve spent less money at the beginning.

    Should I have to think about that? Definitely not. Do I? Yes, occasionally, and then I mosey over to FW anyway because I just can’t refuse those savings, grin.

    Just playing devil’s handmaiden here. :)

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  26. Robin/Janet
    Oct 12, 2008 @ 15:39:33

    I'd make the analogy of folks buying books at their Independent bookstores instead of chains or online. When you do that you pay more (like when you buy directly from an e-pub), but you also support variety, small presses, mid-list authors and those indie bookstores (aka small businesses) that way.

    I think the indie bookseller analogy is problematic unless the goal is to keep the bookstore in business. In terms of supporting small presses, etc., again, that may be the case, but that’s support of the publisher, not the author. As for the oft invoked contention that it’s the indies who carry the midlisters, I can tell you that isn’t the case where I live. I adore my indie bookseller (which is actually a local chain of moderate prominence), but I don’t go there for Romance because that’s not what they carry predominantly (let alone the midlist authors). I have a far better chance of getting the midlisters on Amazon, frankly.

    If Anne or Jules make only a third from FW sales and the higher sales there do not offset the difference in royalty amount, and they stop writing as a consequence, I'm the poorer, even if I've spent less money at the beginning.

    If you are strictly looking at this within the author-reader relationship, then indeed this seems to be the case. And obviously, readers make decisions all the time that IMO we shouldn’t *have* to (or we compromise among several competing areas of self-interest to make the best choice for ourselves). But IMO that’s another indication that things are out of balance. Now it may not always be that buying books from FW or BOB IS in the reader’s self-interest. But if you take the royalty issue as a litmus, IMO you have to take one more step back, to the deal the author strikes with the publisher. Are reader interests being protected, per se, under this system? I’m not talking about the handful of authors any one of us might want to see keep publishing, but about the overall interests of readers. For example, is the author you want to see in perpetual contract more likely to be so because you go the extra mile to the publisher’s website to purchase a book or because she’s getting more mainstream success from exposure in a highly trafficked secondary distributor?

    Also, as we’re told over and over again, these contracts are filled with negotiable terms, and authors can negotiate virtually any term. Now, let’s say that an author makes a deal with a publisher that’s really a bad deal for said author (I’m speaking generally here, not necessarily in terms of distribution), and the only way for the author to come out okay is if the reader acts affirmatively on behalf of the author. Readers may be persuaded to do this, but should we have to? If an author makes a bad deal with a publisher, is it really in the best interest of the reader to try to offset that bad deal? And at what point is our individual effort no longer enough to offset the implications of that deal?

    It strikes me that in too many instances the publisher ends up sacrificing the least because authors and readers are *so willing* to compromise more, believing we have no other choice. And maybe we’re all making some bad deals when we don’t have to, in the hopes that our interests will be protected when they may not be at all.

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  27. Elizabeth N
    Oct 12, 2008 @ 15:41:24

    After finally getting a PDA, I just started purchasing ebooks this year, primarily through BAEN and Fictionwise. I purchased the FW club and like having rebate money to use for trying new authors. I have found several ebook authors and epublishers through FW (you can search for titles by publisher as well as by author) that I would not have searched for on the web. Once I purchase (and read!) these authors’ backlist of titles at FW, I may then eventually go directly to the epublisher’s site for future titles and ones not available at FW. (although some of the epublisher’s sites that I have visited have left me baffled about their ebook formats and download options, unlike FW). But, without FW carrying titles by these authors, I would not have purchased any of their books.

    As a reader who wants her auto buy authors to do well so that I have more releases to lust after, my priority has been trying to figure out if a first week sale of paper or ebook counts the same toward the possibility of future contracts. From threads that I have read here and elsewhere, it seems that publishers may not weigh ebook sales as heavily as paper, so I still buy a lot of paper. (If this assumption is wrong, please let me know so that I can skip the paper editions) Plus, some of the books I want to buy take time to trickle down into ebook format or my preferred format if I have to buy a DRM book.

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  28. RfP
    Oct 12, 2008 @ 15:43:42

    Parts of this profit-tree sound much like the way films are distributed in waves to opening-day, first-run, second-run, and bargain cinemas. As an audience member, I don’t have a problem with weighing impatience against money. I do much the same with hardcover books, paperbacks, library books, and used books: some are worth paying a premium to buy NOW, some I can wait for, and some I won’t invest in unless they’re close to free (or I succumb to impulse). So if books were sold initially through an exclusive site, then farmed out more broadly, that would feel like a familiar scheme.

    Granted, some of my attitude is because I read a lot of older books. I eagerly await some new books, but they’re not all I read, so I have plenty of distractions while I wait for the paperback edition. So I may not be the ideal customer, profit-wise: I don’t buy “first run” for everything, though I’m often part of the long tail.

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  29. kirsten saell
    Oct 12, 2008 @ 15:56:21

    Differing royalty rates are the norm for print books.

    With print, you may see something like this:

    Regular sales, 10% on first 20 000 copies, 12.5% on next 20 000, and 15% thereafter.

    Discount sales, if the discount is 50% or more, royalty of 50% of the regular royalty.

    Export sales, 10% of what publisher receives.

    Remainder sales, if sold below cost, royalty of 0%.

    Etc, etc…

    Readers should not feel guilty about buying a $5 hardback at a discount bookstore–even though the author may receive not one dime from that sale.

    That said, I also buy direct from the publisher if I can.

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  30. Anion
    Oct 12, 2008 @ 16:13:44

    Just as a bit of clarification, the royalty rates Kirsten quotes above are standard for hardcover. Mass market paperback starts around 7-8%; trade paperback 8-9%. :-)

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  31. kirsten saell
    Oct 12, 2008 @ 16:20:38

    Also, I don’t know if you’d see any remainder sales with mass market–they probably just get turfed in the landfill.

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  32. DS
    Oct 12, 2008 @ 16:27:37

    Mass Market Paperbacks show up remaindered in mall outlet stores, dollar stores and buyout stores. A slash is usually made through the bar code inside the front cover and they generally sold for $1 to $2.

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  33. Teddypig
    Oct 12, 2008 @ 16:54:12

    Again, isn't this all part of the negotiation process between author and publisher? Publishers want the most money possible, and authors want the most money possible, and they negotiate to -’ hopefully -’ optimize both their interests. So IMO it's not that distributors want to or are cutting into the royalties of authors but that authors are making deals with publishers that cut into those royalties should the author seek wider distribution and -’ ideally -’ more profit from their books via that distribution.

    Robin,

    My inner business demon, if I were an ePub (Ya ha deedle deedle, bubba bubba deedle deedle dum all day long I’d biddy biddy bum… oh sorry) would be to take into account what you as an ePub make total if you were to only sell eBooks through say Fictionwise or Amazon Kindle etc etc and set the money the author receives to be a flat rate of that total across the board on any sale so sales made on the ePub’s site are basically giving the ePub the gravy but the author does not see that because he gets a flat rate of what he makes on any sale.

    Cushion the whole deal up front in the contract to account for any loss with the total distribution of the eBook through the secondary market and the author or the reader sees no difference and it is only felt by the ePub then no issues arise. The author makes the same anywhere and the ePub makes more from their own site.

    Do you think that would that make everyone happy?
    That scenario could mean possibly less money total for the author from the whole deal might bring less pressure for everyone where the sales actually occur.

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  34. Jane
    Oct 12, 2008 @ 16:55:12

    mass markets aren’t remaindered. Unsold mmp are stripped and returned for credit.

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  35. Ciar Cullen
    Oct 12, 2008 @ 17:46:48

    In this economy? In any? Are most readers going to care where the money goes–to the publisher, the reseller, the author? I watched my niece buy two crateloads of books at a giant flea market this weekend (a few by folks who have been reviewed here and have commented here), and I’m certain it didn’t occur to her to question whether or not the author was making no money because of her buying habits. It’s like trying to get folks not to buy goods made in China.

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  36. DS
    Oct 12, 2008 @ 18:48:14

    Thought this was interesting. Robert J. Sawyer wrote:

    Now, let’s try to parse that out. Most Tor hardcovers have a cover price of US$24.95, and on copies sold in the US, authors get 10% of that on the first 5,000 copies (which is $2.50 a copy), 12.5% on the next 5,000 copies (which is $3.12 a copy), and 15% on anything over 10,000 copies (which is $3.75 a copy). The deal is similar with all other commercial SF publishers.

    Here’s the link.

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  37. Jane
    Oct 12, 2008 @ 18:51:19

    DS – the thing is, though, that the author is getting varying percentages based on the retail price, not the money that Tor gets after the distributors take their cut. That’s a huge difference.

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  38. Robin/Janet
    Oct 12, 2008 @ 19:08:50

    It seems to me that there are just so many possible ways to rebuild this beast, whether it be, as TP suggests, through a flat rate royalty across the board, through a staggered rate based on sales numbers regardless of venue, through a staggered rate that incorporates a certain number of copies sold via a distributor (i.e. if an author’s books at FW outsell those on the publisher’s website by x%, the royalty rate increases), etc. The whole ‘let’s split what’s left over after the publisher already gets paid’ thing just seems so strange to me. Especially when you factor in the no advance policy, which one must consider in print book figures.

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  39. Shiloh Walker
    Oct 12, 2008 @ 19:30:33

    I don’t think a reader should worry about my income, as long as they are being legal about their book habits…ie: not pirating my ebooks. Of course if they are pirating, they don’t care, but that’s a whole different issue.

    I do think my publisher and I need to worry about the money, though. If there are certain avenues that could expose my writing to more readers, I’d want to look into it. But if it seems that new exposure could actually hurt my income, I don’t want to go that route. I can’t write as much if I have to go back to work to supplement income.

    Hopefully there’s a middle ground…getting the books out to more, yet not in a way that would cut into my income. I do like the plan somebody mentioned, keeping all new releases sold solely on the publisher’s site and then releasing thru etailers. It sounds like a good model to me.

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  40. Anne Douglas
    Oct 12, 2008 @ 19:33:07

    I think this could be considered one of the areas where ePublishing differs from traditional. Not in the contract so much, but in the delivery of the actual item. I can see that for an ePublisher releasing at a secondary retailer could be the equivalent of a trad publisher selling into a discount sales venue.

    I would like to know what the straight comaprision of apples to apples of eBook rights from epublishers to traditional publishers in this instance. Comparing eBook to print book I don’t think is quite valid, as after all, a print book would not be sold through FW and the distribution trail is quite different for a print book. Do the trad publishers that do have their own eBook store fronts consider FW a secondary retailer or a first level one on par with say, Barnes and Noble?

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  41. DS
    Oct 12, 2008 @ 19:59:48

    Sorry, I should have remarked my comment from Sawyer’s blog OT. I was just interested in the difference between the romance figures and the sf figures since they shift at very different points.

    Also what I see as paperback remainders are in fact unsold copies, hurts, and printing errors not returns.

    I shouldn’t post when I’m also trying to do two other things, it makes me incoherent.

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  42. Teddypig
    Oct 12, 2008 @ 20:23:40

    I am no expert but I keep thinking that eBooks are still way too young to be set on one path or have the same old model where the ePub relies primarily on their own web site to make sales which may be showing an inherent weakness here.

    A new ePub starting out could potentially focus sales almost completely through what is considered the secondary market Fictionwise and BooksOnBoard and Amazon and iTunes now or many of the other eBook retail options and by using a royalty rate based strictly off that and leveraging these off-site distributors as their primary sales actually become in some ways more financially stable and more importantly adaptable.

    Let’s face it creating and maintaining your own website and services as good as Fictionwise or Amazon??? I mean in my mind that is the same as a small print publisher trying to make a retail book store as good as a Barnes and Noble.

    I wonder if that is actually worth the time and effort now if these other secondary markets are increasing their customer base when you as a good ePub which none of those retailers are need to focus on providing good editing and good covers and most importantly good writers?

    Maybe we will see a newer lighter weight ePub model that would be more likely to follow any new trend, be more aware of how to elevate sales on the secondary market and benefit from adopting any new hardware formats and thus become more prominent than someone relying primarily on their own insular website and their own programming knowledge and their own costly research to make these sales.

    But I’m an idiot what do I know?

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  43. Robin/Janet
    Oct 12, 2008 @ 20:48:10

    Teddy Pig: Reading your comments reminds me of the discussions we keep having about how epresses are businesses and not “families.” Selling books only at a publisher’s website seems to rely on reader loyalty that is, perhaps, more suited to that family culture than to a publisher business model (i.e. readers are, in a way, being asked to pledge loyalty to a publisher and not simply an author). IMO it’s both unrealistic and limiting, both for the publisher and the author. Of course if authors and publishers are happy with the results, then they can certainly choose to keep that status quo. But it strikes me that all the talk about wanting to make ebooks more mainstream is perhaps logically opposed to the exclusive publisher sales model.

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  44. Anne Douglas
    Oct 12, 2008 @ 20:55:26

    I don’t think I would disagree TP, but it would hazard that for some publishers the volume of sales generated at a secondary reseller have not outstripped the numbers from their own site at this point in time.

    That would not be the case for all e Publishers though, and I could see much benefit to them if they can leverage away from the 40-50% cut secondary distributors apparently take. After all if you can sell 1000 books on your own website or sell 1000 books on someone elses website but have to pay them 40% of the profit, why would you? But if you can sell 1000 on your website, but 10,000 on another, of course you would. I don’t know that this is the case (I’ve no idea of volume going through for example FW to know what is valid or not, my personal figures are not far enough reaching).

    As Alessia said in the very first post, this would work extremely well for her. For me at this point not so much, but that might change in the future, who knows.

    Robin/Janet: I can’t talk for everyone else, but I get the feeling that unlike trad pub houses people do react to the ePublisher as more of ‘author’ in recognition. If heard/seen a number of people say they love ‘Loose Id/Samhain/EC books’ the same way they would say ‘I love X author’. But I can’t think of one person I’ve ever had a conversation with who says they love books by random house or Kensington. I know I never cared who published who until I was an author myself

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  45. Keishon
    Oct 12, 2008 @ 20:56:24

    mass markets aren't remaindered. Unsold mmp are stripped and returned for credit.

    And…sometimes sold in resale shops for 50 cents. Notice I didn’t say buy them but see them. Often they are romances but none I’d want to read. I know it’s illegal for them to do that but it happens. How do they get there? That’s anybody’s guess.

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  46. Anne Douglas
    Oct 12, 2008 @ 21:04:40

    Bugger, timer ran out.

    I was going to finish: But I can see that changing as eBooks become more popular and strictly eBook authors become more well known as more than a ‘publishers name’ book, and that could very well turn into changes in the current distribution model.

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  47. veinglory
    Oct 12, 2008 @ 21:06:26

    I don’t think selling by publisher has anything to do with a ‘family’ thing. It dates back to the founding of Harlequin/M&B and related to high volume readers whose intake is far about what any author could provide. So it makes more sense to choose by name of publisher than go by a very long list of authors. It remains pretty typical for romance on and offline.

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  48. Teddypig
    Oct 12, 2008 @ 21:09:39

    make ebooks more mainstream is perhaps logically opposed to the exclusive publisher sales model

    Oh sure, What is so “mainstream” about sales in isolation?
    What is so “family culture” about a publisher that can only get in print a select few authors and everyone else gets what slots are left?

    Those are the things I think about when some of these public quarrels happen.

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  49. Miki
    Oct 12, 2008 @ 22:56:27

    I used to buy from the independent websites, just so I could get the books in HTML and convert it for WHATEVER device I choose to read it on.

    Then I started to compare book lengths and realized the prices charged by most independents are ludicrous for the length of the books! Especially given the variable quality produced at those sites. So I stopped buying new-to-me authors, then I stopped buying all but my most favorite authors, then I just stopped buying at all, unless they showed up on Fictionwise.

    Oh, there were some other reasons in there, too. And I can think of a couple of authors I’ve bought at the independent sites even recently, but for the most part, I buy mainstream publishers these days, and I generally buy those books at Fictionwise, or to a lesser degree, Books on Board.

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  50. ShellBell
    Oct 13, 2008 @ 00:50:18

    Where I buy my eBooks from depends very much on how desperate I am to read the book and how much the book will cost me. If the book is priced at a hardcover or trade price then I am learning to be more patient and will wait until I can receive a decent sized rebate. I prefer to buy from Fictionwise so that I can take advantage of any rebates on offer – hence my annoyance that not all books are released as ebooks on release date and not all ebooks are available at Fictionwise as soon as they are released as ebooks. If Fictionwise doesn’t have the book I’m after then I will scout around other retailers e.g Books On Board, eReader or Mobipocket but once again price and possible rebate will be taken into account. I also do buy directly from Samhain Publishing and Harlequin M&B, as their books aren’t generally available at Fictionwise until at least a week after the release date – and there are a couple of Samhain and HM&B authors that I just can’t wait for!

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  51. Mary Winter
    Oct 14, 2008 @ 03:19:25

    I have to say that first off, I am loving this discussion. Second, as a new epublisher, one of my goals, not only as an author, but also as a publisher, is to make my books available at as many places as possible. Why? Because first of all we’re new. More venues means more visiblity. Secondly, because I want to capture as many readers as possible, and I have heard too many readers say that they only buy from Fictionwise, or they buy from the Kindle store not to listen. And as an author, I know when I get those Fictionwise sales, I’m not complaining. Sure, it’s a reduced royalty rate, but there’s a good chance that these folks might not have wandered over to the publisher store to buy your book anyway, so it’s “free money” in essence. And maybe they’ll love your work enough to head on over to the publisher’s store to pick up the new release.

    I would love it if all my book sales came from my publishers websites. Sure, I get more money. The publisher gets more money. The reader probably will get his/her book faster. It’s win-win-win. But one-stop shopping has its advantages and some of them are pretty big, like Fictionwise’s programs. The stark reality is publishers have to serve customers when and where they want to be served. I know that’s something I’m striving to do, and adding more venues all the time.

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  52. MaryK
    Oct 14, 2008 @ 13:35:22

    You don’t have to buy into the Fictionwise club to get discounts. They have pretty regular sales, and new books are discounted for the first day they’re listed so every week I browse the “new” list when it comes out. I impulse buy like crazy at Fictionwise; and when they have a sale, I go looking for books to buy. Unfortunately, I can’t always find many because I buy only multiformat. It’s a sad thing when a reader trying to spend money can’t find anything to buy.

    I have a wish list for books at EC and Samhain, but I buy them rarely because of the expense and hassle. If these books were at Fictionwise, I’d have long ago tipped the whole list into the shopping cart.

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  53. XandraG
    Oct 14, 2008 @ 22:58:20

    I haven’t seen this come up yet, so I’ll toss it out and say that e-distribution channels like Fictionwise can also be likened to book club channels in print/trad publishing. If I recall correctly, most standard mass-market contracts only award the author something like 2% royalties on “book club sales” versus 6-8% regular retail, and if I remember the reason why it was because the book club, in whatever form, was a single, bulk buyer and got the titles at bulk discount.

    But the underlying thing here is that epublishing is not the same animal as print publishing. Yes, to a reader it’s simply another way to get a book, but from a publisher’s perspective, it’s a whole ‘nother zebra that doesn’t always have parallels with traditional publishing norms.

    Rolling back through the comments, it seems that places like Fictionwise and BOB are considered akin to B&N or Chapters or Borders or another retail brick and mortar outlet, but that analogy doesn’t fully mesh. Traditional publishers function mainly as acquisition and production–they acquire and produce paper copies of stories for customer consumption, but they aren’t set up to act as direct-to-customer retail outlets and therefore require a customer distribution point like a bookstore to get books from printing press/warehouse to customer.

    Epublishers, by virtue of being on the internet, have much fewer physical limitations between them and the customer–the internet isn’t location-specific in the physical sense, and the product really can be sold direct from the virtual equivalent of the warehouse shelf.

    Print pubs have attempted to close their gap through mail-order, subscription, and book-club efforts, but since there’s physical stock moving back and forth, those revenue streams are also cost centers, so the payoff is negligible.

    Retail bookstores operate on a consignment model–they stock the books from the publisher, but only pay for the books they sell, returning the stock that doesn’t (and authors’ royalties are held in reserve against those returns). In return for providing the localized shelf space for stocking, marketing, and distributing the publisher’s books to the customer, the retailer receives the discounted/wholesale price for the stock–somewhere between 40 and 60% off the suggested retail price.

    Now insert a distribution point like Fictionwise, and you have something that’s not quite the same animal. There’s no physical need for a “retail” distribution point because the location is essentially the same for Fictionwise and ePublisher XYZ–the Internet. There’s no need for real estate issues like shelf space, because the virtual world approaches functional limitlessness. However, there’s still the requirement that the publisher offer the distributor a 40% or 50% discount to carry the titles. Or in this case, the distributor takes 40-50% off the top of whatever they make selling the publisher’s books, then passes on the rest to the publisher for distribution among the authors.

    The model is sound for print and physical purposes, but doesn’t fully take advantage of the unique landscape of the online world. I’m not sure it could just yet, as someone has yet to envision a different way of doing things. What I suspect is the current case is that the Publisher builds an audience or a customer base through brand recognition, and Fictionwise or BOB, etc. have customer bases as well. These two sets don’t necessarily overlap much, which is where the biggest value comes in to the author. My publisher (Liquid Silver) holds new releases for two or three months before releasing them to Fictionwise (although I understand that Fictionwise gets the titles up at their discretion, so if there’s a backlog, release of a particular title would be subject to it). We get the same royalty rates for distributors and the main site, but essentially, we get royalties off the price they sell to FW, which is the deep discount, so as an author, I don’t see as much from a FW sale as I do a sale from the LSB site. I do not think there’s much overlap in the two customer bases, which means I as an author get more benefit because I potentially reach two audiences instead of the same audience twice, the second time at a discounted royalty rate. I’ll take those lesser royalties knowing that I’ll reach the people in the “book club” through Fictionwise.

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  54. Teddypig
    Oct 15, 2008 @ 06:21:01

    Now insert a distribution point like Fictionwise, and you have something that's not quite the same animal. There's no physical need for a “retail” distribution point because the location is essentially the same for Fictionwise and ePublisher XYZ-the Internet.

    Well no, the internet is not a single location. You have to find XYZ ePub in order to buy from them. So I may know where BooksonBoard or Fictionwise is but not necessarily know where XYZ ePub is.

    The buying options or security in purchasing can be different. I may trust giving my credit card information or Paypal information to Fictionwise or Amazon but not necessarily trust giving that information to XYZ ePub.

    Then and most important as the comments made here pointed out again and again Fictionwise provides a single point of purchase from many ePubs, they provide discounts, a permanent library service, even a way to download and read some of the eBooks purchased on your iPhone anywhere and finally good customer support which I do not see XYZ ePub doing well or doing at all.

    Why? Because those things cost money and effort to create, maintain, and provide. Fictionwise seems to earning that 40-50% they make.

    Buying from Fictionwise is a totally different experience from buying from XYZ ePub. So either you compete with that or seek to benefit from it.

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