MUST READ: A snippet from J.A. Konrath’s latest blog post:
Publishing can survive using this strategy, if authors are gullible enough to keep signing these one-sided contracts. Here’s how:
On a $6.99 paperback, the author makes about 56 cents. That’s close to what the publisher makes, after all expenses. While it is possible for publishers to get into the black before an author earns out her advance, earning out the advance is usually a good indicator the book is making money.
On a $6.99 legacy* e-book, the author makes $1.04 after agent commission. The publisher makes $3.67. So let’s play the advance game.
A publisher pays an author $20,000 advance. Author keeps $17,000 after the agent is paid. There is no paper version. The e-book, priced at $6.99, sells 12,000 e-books in five years, which is what my legacy e-book Dirty Martini has sold.
The author would still owe $7520 on the advance before earning another nickel. In the meantime, the publisher has made $44,000. Minus the $20k advance, the publisher has pocketed $24,000, and still will make money for a few more years without paying the author any more.
If the author self-pubbed his own book at $6.99, and sold 12,000 copies, he would have made $58,880.
If publishers keep signing authors for e-book-only deals, at the current royalty rates, they will get richer than they ever have, at the expense of authors. Before you sign any contract, understand what it means, what you are getting, and what you are giving up.
Read the whole blog: http://jakonrath.blogspot.ca/2012/09/konraths-sales.html
*legacy means big publishers