There was an interesting article in The Daily Telegraph two days ago about the payments authors receive from the publishers of e-books, as follows:

“Professional writers could become and ‘endangered species’ unless publishers start paying them properly for e-books, the Society of Authors has warned.  The society said lovers of literature would soon be left with less and less quality content.  In an open letter to publishers, the society called on executives to treat authors more fairly, drawing up less punishing contracts and paying them more.  Research has shown that the median income of British authors is £11,000, which the society argues is far below the ‘level deemed necessary for a socially acceptable living standard’.  Nicola Solomon, the society’s chief executive said: ‘Unless publishers treat their authors more equitably, the decline in the number of full-time writers could have serious implications for the breadth and quality of content that drives the economic success and cultural reputation of our creative industries’.  The society calls on publishers to give authors ‘at least 50%’ of revenue from their e-books, as opposed to a ‘mere 25%’, and not to ‘discriminate’ against writers who do not have powerful agents.”

If I look at the 100 Kindle edition paid best sellers on Amazon, the top price is $14.99 (3 books), and the cheapest books were $0.99 (20 books).  There is another list of the 100 Kindle edition free best sellers.  The books selling at very low prices are there because their authors are trying to promote them into best sellers.  This way the author gets ‘fame’ if not fortune.  But if one looks at the best authors, the prices seem to start at $8.99.  There are five J K Rowling books for sale at $8.99.  So, it’s fair to note that authors have some control over the price at which their books are sold as e-books, and, presumably, also some control over their level of royalties.

The problem, it seems to me, is for the relatively unknown author who is trying to make a living from writing good, serious literature.  Let’s say s/he can persuade the publisher to sell his/her e-book at $6.99, with a 25% commission.  If so, s/he will earn $1.75 a copy, and to make £11,000 per year,  s/he has to sell 9,400 copies per year.  This will put his/her book on somebody’s best seller list.  The point is that it is very difficult for a good, serious writer to make a living selling e-books, unless s/he has a best seller.  So, I think the Society of Authors has a point.

What can be done by whom?  I think it’s pretty unlikely that the publishers will all agree to raise their prices enough to give their authors 50% of the price.  They’ll be afraid of losing volume.  Besides, there’s plenty of margin for the publisher in an $8.99 e-book.  Production costs are far less than a dollar, so their major expenses are corporate overheads, author royalties, and advertising, over which they have control.  It’s even less likely that an ‘author’s union’ will be able to force through price increases.

But I think that once an author and a publisher have reached a basic deal to publish hard copies, there’s room for negotiation on the price of the e-book.  This negotiation would recognise the author’s per copy royalty on hard copies, the publishers costs, volume assumptions, and the sensible price differential between hard copies and e-copies from a user’s point of view.  For example, if the hard copy is selling for $17.50, and a Kindle fanatic wants the book, why wouldn’t s/he pay $12 for it, so that the author gets $4 per copy and the publisher gets $8?