Finally, a Big 5 publisher raises digital royalties (but there’s a catch)

Digital royalties have been one of the major sticking points in the debate over traditional vs. self-publishing, with many people (even from the traditional publishing world) arguing that big publishers should raise digital royalties on ebooks to at least 50 percent. Nonetheless, until now, publishers’ standard royalty on new ebooks has been stuck at 25 percent.

That changed somewhat on Thursday, when for the first time a big publisher made a step toward increasing digital royalty rates. HarperCollins announced on Thursday that it will offer authors who sell their books directly through its website, HC.com, “an additional 10% net royalty on print, ebook, and physical audio products.” So the standard royalty on ebooks sold through the site would increase to 35 percent and the standard royalty on hardcover books would increase to 25 percent.

HarperCollins relaunched its website this summer and is encouraging more authors to sell directly there.
HarperCollins relaunched its website this summer and is encouraging more authors to sell directly there.

“While our first priority is to sell books through as many different retail channels as possible, we are pleased to provide this platform for our authors who want to sell directly,” Brian Murray, HarperCollins president and CEO, said in a statement. In a veiled reference to the ongoing dispute between Amazon and Hachette and/or foreshadowing of similar disputes between Amazon and HarperCollins, he said, “Our authors can also be certain that their books will always be available to consumers through HarperCollins, even if they are difficult to find or experiencing shipping delays elsewhere.”

Many authors and agents will see this as a step in the right direction, but not generous enough: Many have argued for standard 50 percent digital royalties, since a publisher’s cost does not increase incrementally when another ebook is sold. Furthermore, sales through HarperCollins’ website are likely to make up only a very small percentage of an author’s total book sales, meaning the royalty increase wouldn’t necessarily account to much.

Nonetheless, it’s a step and it’s not difficult to imagine it expanding. Now let’s watch and see whether other big publishers do the same thing.