Constance Hale’s update on e-books

From the writer's perspective: everything you need to know about digital books (and booklets) {This article is an update of a post originally written by Sarah Baker in April 2010. Into it is added information from other posts on this site, as well as reporting done by Kailani Moran in 2014. The publishing landscape is changing fast. I'll try to keep you posted on important developments.} Electronic rights form the chaotic bazaar of book publishing. Here authors barter with agents, agents haggle with publishers, and publishers brawl with e-retailers. Everyone is vying for his or her claim on the best pomegranate. This frenzy, and a barrage of media attention, has left most people involved feeling confused. Agent Laurie Liss, vice president of Sterling Lord Literistic, says, “I have never felt such a divide between publishers and agents as there is now about electronic rights.” And Mark Gompertz, executive vice president of digital publishing at Simon and Schuster, acknowledges an “anxiety on the publishing side, too. We’re on the threshold of something new.” So what should a writer know in a labyrinth of twisting alleys and ad-hoc product stands? Here are some key terms and general guidelines to the unstable warren of the U.S. market. E-book According to PC Magazine Encyclopedia, an e-book is “the electronic counterpart of a printed book, which can be viewed on a desktop computer or a portable device such as a laptop, PDA or e-book reader.” In January 2014, the Pew Research Center reported that between the end of 2012 and the beginning of 2014, the percentage of adults in the U.S. who had read an e-book in the past year expanded from 23 to 28 percent. Along with this growth in readership, the past year and a half has brought some new trends in e-publishing. (Read on.) E-reader The Free Dictionary states that an e-reader, or e-book reader, is “a small, portable device onto which the contents of a book in electronic format can be downloaded and read.” Although there are more then two-dozen different brands of e-reader available, the most popular are Amazon’s Kindle, Sony’s Reader, and Barnes and Noble’s Nook. Then there’s Apple’s iPad Tablet, which gives you all the apps of an iPhone as well as all the words of Ulysses. Enhanced e-books These are e-books with bells and whistles. Think of a DVD—you get the movie plus the option to watch cuts or interviews with the director. An enhanced e-book could include audio, a video interview with the author, passages cut from the final text, slide-shows, or illustrations. You might even be able to click on a recipe, or a footnote, that takes you to a full citation. Enhanced e-books are interactive e-books. E-singles The "singles category" acts to fill the gap between full length e-books and short stories or magazine articles. Singles include works of fiction and non-fiction, usually between 5,000 and 30,000 words. Sites such as Atavist and Shebooks provide e-singles for purchase, usually priced under $5. Laura Fraser, co-founder of Shebooks, a platform for women writers and readers, describes her site as a boutique where all e-singles are carefully curated. Amazon also sells e-singles through Kindle Singles. Extending her analogy, Fraser says Amazon and some other venders are more Walmart than boutique, in that they focus on broad inventory without worrying so much about a particular taste, sensibility, or reader audience. Jim Giles, the co-founder of the e-singles site Matter (now incorporated into Medium, Twitter's long-form site), there is no advance/shared revenue system, because the content is offered free. Authors get paid a flat fee on publication, much like at a magazine. Giles adds:  “We've been hearing that non-fiction singles are not doing well. The excitement produced by some early hits (e.g. "My Mother's Lover," by David Dobbs, which sold 75k) hasn't panned out." Caveat scriptor. Subscription services A recent development has been the introduction of book subscription services such as Scribd, Oyster, and Entitle. In these models, companies work with publishers to allow subscribers pay for access to a library of existing e-books. Oyster offers 100,000 titles, and announced in January 2014 that it has raised $14 million in funding. How big is the e-book market? After a few years of rapid growth in double and triple digits (Sarah Baker's original post highlighted a 176.6 percent increase between 2009 and 2010), the rate of e-book sales appears to be slowing down, but this doesn't mean that it's a small market. As reported by Digital Book World, figures provided by the Association of American Publishers show an increase of 2.2 percent to $983.6 million during 2013. The AAP report only takes into account publisher sales; self-published e-book sales could be rising. According to a Wall Street Journal article in January 2014, 32 percent of Amazon's weekly 100 top selling e-books in 2013 were self-published. (See below for more on self-published e-books.) And the worldwide market for e-books is growing. In January 2014, Simon & Schuster reported that international e-book sales were growing at a higher rate than U.S. sales. The publisher also sold e-books in 200 countries during 2013. What should I be aware of in my contract? Get an agent or have a publishing lawyer check over your contract. “You wouldn’t have your spouse pull your tooth for you,” says agent Wendy Strothman. That isn’t just a plug for her industry; contracts are confusing and if a professional looks at them, you’ll sleep better. Some things to look for in particular:
  1. If you have been previously published, now is the time to check your contract to see if you control e-rights, says Liss. In other words, be on top of it.
  2. For new contracts, “publishers will demand e-book rights. “No book publisher will allow e-book rights to be retained by the author,” adds Strothman.
  3. Double-check the reversion of rights clause and insert a minimum number of annual sales for a work to be deemed “in print,” suggests The Author’s Guild.
  4. Agents and publishers are in battle mode over enhanced e-books and there is no standard yet. A big question is whether they will be classified separately from regular e-books. Many publishers want these rights, but most agents are trying to retain them.
  5. Read the fine print regarding the format of book. If the publisher is considering publishing straight to e-book, you want to be aware of that.
  6. Don’t rush into anything. The e-book market is uncertain and changing.
Authors really need to be aware of things like this, and we are our own best advocates. I got a high royalty for  Sin and Syntax e-books, because e-books weren't really an issue when the book first came out in 1998. When I got the contract for the all-new, 2013 edition, I noticed my publisher was trying to lower the royalty for e-books and my agent hadn't noticed. I said that that would be a deal breaker. Random House caved. For me it makes a difference of potentially thousands of dollars per year. What royalties should I expect? At first, most publishers were offering rates of 25 percent of net receipts for e-books. As e-books have become more popular, those rates have slid down (see my own story, above, where the publisher wanted to make all royalties for the paperback 7.5 percent.) The Author’s Guild suggests ways to protect you if industry standards change: First, because the market is changing so quickly, you can refuse to lock yourself into a rate. Try to obtain the unconditional right to renegotiate after a period of, say, two years. Second, negotiate for a royalty floor. Insist that your royalty amount for e-books will never fall below the royalty amount for the hardcover edition of your work. Royalties for digital singles are even more in flux—and they may be called "revenue share." The publisher often pays a low advance (which has to be earned back by sales before the author makes any more money). Then, once the advance has earned out, the publisher and the author share earnings. Shebooks, according to Fraser, pays a small advance, usually $500-1,000, against a 50-50 revenue share. In other words, Shebooks and the author split the revenues after a download fee, and once the author's advance as been earned back by the publisher. Do books ever go straight to e-book? You can self-publish straight to an e-book. The advantages are obvious: no rejection letters from editors, no distribution costs, no royalties to an agent. Plus, you’ll get marketing for you or your business. The disadvantages are that—unless you are a jack-of-all-trades—you must now pay someone to copyedit, proofread, design your cover, market, advertise, and publicize. And you don’t have the advice and expertise of editors and designers. There are many sites on-line that offer self-publishing services including Amazon.com and Lulu.com. Or you can set up PayPal on your own Web site. Publishers have started publishing a few books straight to e-book. For more on self-publishing, see Sarah Baker on do-it-yourself-books. What’s the lowdown on the pricing of e-books? Sarah Baker's original story gives you the full history up to April 2010. In 2012, Gianmaria Franchini detailed the issues of price-fixing in e-book sales. Since Franchini's update, Apple lost the trial, discussion about pricing models has died down, and e-books continue to rise in popularity. But are the titanic struggles between Amazon, legacy publishers, Apple, and Google over? Stay tuned. Are there any pitfalls to e-books? There is still a prejudice in the critical world for hardbound books. If a major publishing house, and a respected team of editors, has laid down the bucks to put your book out in cloth, that still means something to some people. So some writers prefer not to go straight to a an e-book. Piracy is a big pitfall. If you are self-publishing and want to make sure that nobody steals your content, copyright every page or install PDF security features. If you are working with a publisher, check with them about protecting your content. The other pitfall? Things can go wrong, Orwellian wrong, like in 2009 when Amazon removed 1984 from people’s Kindles. The last word The offerings at the e-book bazaar change daily—new vendors, new products, new prices, and new customers. Thank goodness the food bazaar stays familiar. Forget enhanced pomegranates. The fruit is magical just the way it has always been.

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