From romance author Jackie Barbosa:
It can’t have escaped too many authors’ notice that most of the major publishers are opening digital-first/only romance lines. Harlequin was first out of the gate with Carina Press, but now we have Avon jumping into the game with Avon Impulse and Random House with Loveswept. I’m sure the other major houses can’t be far behind. There’s a lot to be said for the digital first/only publishing model in this age of shrinking shelf space and expanding digital book sales. Why shell out for a print run when orders for print books are declining and you may even take a bath on the book if one of the big boxes (Walmart or Target) decides not to stock it?
. . . .
But there’s a catch, and it’s a big one, in my opinion. With the exception of Carina, it appears that these new digital lines being created by the major publishers are picking up books and authors for these new lines with no advances and a royalty rate of 25% of net. (The royalty rate sometimes steps up to as much as 50% of net after a certain number of sales, but these sales numbers are usually in the 10,000+ range.)
Now, 25% of net is pretty standard when you sign with a major publishing house, but usually, you’re getting that lower rate in exchange for print exposure AND an advance. The publisher is making a significant upfront investment and taking the lion’s share of the risk in traditional print deals, both because they’re giving the author a guaranteed minimum royalty payment in the form of the advance and investing in the print run and print distribution, not to mention the possibility of returns. From a business perspective, it’s reasonable for an author to take relatively low royalties in exchange for a guarantee that, even if the book tanks, he/she will never receive less in payment than the advance.
. . . .
Let’s see if I have this straight, shall we? You are not going to pay me an advance for my book, so you are not going to guarantee me a minimum payment. In addition, you won’t be investing in a print run or physical distribution for my book, thereby significantly cutting your production costs. But, because you are (Insert Big 6 Publisher Name Here), I should be happy to accept the exact same royalty rate for my books as authors who are getting both of the benefits? Hmmmm, forgive me if I’m not impressed.
And here’s the real kicker–the way I see it, within five years, most romance will be published as digital first. If print is available, it will probably be POD. And this will be true of books put out by the Big 6 publishers. Unless a book is “big enough” to be stocked in Walmart/Target, it’s not going to HAVE a print run. That’s just the reality of what’s happening to the book market.
Link to the rest at Jackie Barbosa and thanks to tip-machine Jenny for the tip.