Monday, July 29, 2013

When Amazon cuts book prices, how do authors fare?

As an avid reader, an inveterate "consumer" of books, I welcome lower prices. But when Amazon and overstock.com start slashing list prices of books by 50 per cent and more, I feel driven to give a shout-out to my fellow authors.
That's because most contracts between writers and publishers include a royalties clause that slashes a writer's earnings at a certain discount level.
I know, I know. Writers usually receive only 10 per cent of the list price to begin with: a $30 book earns a writer $3 (applied against any advance, which has to be "earned out"). But when the discount clause kicks in -- for example, on Amazon-style discounts of more than 50 per cent -- then as a rule, whoosh, suddenly the author is entitled to 10 per cent of what the publisher receives.
Consider that $30 book. At best, given the hefty Amazon-style discount, the publisher receives $15 . . . and the writer $1.50. The author's earnings have been cut in half . . . and that, as I say, is best-case.
This explains why, when Amazon tussles with book publishers, authors tend to side with the latter.
[Next day: I love Obama. But on this issue, judging from this development, he has yet to discover the bigger picture.]

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