[June 10, 2004] In Wake of Random House Announcement, Authors Guild Presses Members to Negotiate E-Book Royalties Diligently, with Eye on Amazon.com NEW YORK --(Business Wire)-- June 10, 2004 -- The Authors Guild today urged its members to focus on e-book royalties during contract negotiations. The Guild said that Random House's new e-book royalty rates signal that the largest trade book publisher believes that e-book sales will be increasingly significant in the industry. Random House had paid royalties of 50% of its revenues for e-book sales -- the best e-book royalty among major publishers. For book contracts signed after May 31st, Random intends to reduce that rate to, effectively, 30% of receipts for e-books sold at standard discounts to retailers and 15% of receipts for high-discount sales. (Royalties for works that haven't earned their advances will be higher.) "E-book royalty rates will matter -- we want to make sure authors and their representatives are paying close attention, " said Guild president Nick Taylor. "Sales have been modest, certainly not what industry optimists had hoped for in the 1990s, but they're growing quickly, and the reading devices are rapidly improving." The Guild emphasized that this should be a matter for close negotiation with all publishers, not just Random House. Since e-books sell primarily online, the Guild said that authors should take precautions to deal with Amazon.com's dominance in online bookselling and the possibility that publishers will sell large numbers of e-books directly to readers. "Amazon may be able to command steep discounts as the price of reaching its customers," said Mr. Taylor. "Authors have to take care that they don't wind up paying for that." Discounts of 65% often trigger "high-discount" clauses, which shift most of the burden of the added discount to the author by drastically reducing royalties. Authors can avoid this by limiting such sales to those outside of ordinary trade channels. Publishers may also be able to sell in considerable volume directly to readers by giving incentives for e-book buyers to register with the publisher. The publisher could then target offers for specific titles to readers who are likely to buy. The Guild urged authors to negotiate a separate royalty rate for such sales. Guild advisory: http://www.authorsguild.org/news/urges_members_negotiate.htm The Authors Guild (www.authorsguild.org), the country's largest organization of book authors, offers legal advice, health insurance, and website building and hosting to its members. [ Back To TMCnet.com's Homepage ]