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E-book “Sales” and Splits

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In “Why You Can’t Actually Sell an E-book” (May), Mike Shatzkin argues that e-books are really licenses rather than physical objects, and should therefore be treated like the other license-like elements typically found in a publisher/author agreement—serial rights, book clubs, paperbacks (I assume Shatzkin means mass market paperbacks), and so forth. He certainly is right that an e-book is really “a license to access a digital file” and not a thing that gives its owner the right to “lend, give, or resell” to others as with physical books.

But I think he is wrong to say that the publisher/author split should therefore be more like the split typical of other licensed rights in a publishing agreement. To understand what is wrong with his notion, a place to start is with another license-like element in many publishing agreements: movie rights. An author with any bargaining power can usually keep all the movie income. Publishers don’t like this, but the truth is that a book is just a starting point for a movie. Millions will be spent before the film is in the can.

An e-book, on the other hand, is the book word-for-word or an “enhanced” e-book, which is still the whole book but with some fancy stuff added. Every one of those words will have been examined by various kinds of editors at various stages of its production, and the costs of marketing both the print and the e-book editions will have to be borne by the publisher. Far from being a sort of lucky break, which is the case with most licenses granted by publishers, an e-book is an edition of the book itself, the very essence of the publishing process described in the author/publisher agreement.

For the moment, sales of print versions of a title may be able to support a bigger share of e-book income for the author. But to the extent that e-books come to dominate the overall market for books, a 50 percent share of the e-book income for the author will not leave enough for the publisher to do its job. E-books will have to support their share of their publishers’ acquisition, editorial, and marketing expenses, which means the author royalty for them will have to be similar to, if perhaps a bit lower than, the usual rate on printed books. It certainly cannot be as much as 50 percent of the revenue generated.

Curt Matthews

Independent Publishers Group


I don’t disagree in principle. But I’m not sure that what Curt Matthews says is reflected in what contracts say. I wasn’t talking about what was equitable. I was talking about what publishers say and what contracts say.

Mike Shatzkin

The Idea Logical Company




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