Recently, Wylie created a significant stir by turning over exclusive e-book rights to twenty backlist titles by stellar names (Bellow, Ellison, Naipaul, and so on) to Amazon for sale on the Kindle, their first availability in the digital age. Wylie was doing his clients a baffling disservice. Yes, Kindle currently dominates the e-book market, but to grant exclusive rights to a single retailer carries a range of downsides for authors. Amazon's standing today already is challenged by Apple, Barnes & Noble, Sony, and soon, Google. I don't know what terms Amazon gave Wylie, but limiting accessibility of backlist classics showed a clumsiness that seems to undermine Wiley's previous reputation for shrewdness.
But this aspect of the deal is only a relatively small portion of the issue that Wylie has raised. How should publishers and authors split proceeds in the burgeoning e-book market? Not surprisingly, agents (on behalf of authors and their own commissions) think publishers should be expected to pay as much as 50 percent of the net proceeds of sales, because they no longer have paper, shipping, and returns of unsold inventory to contend with. Publishers respond that they still have the considerable costs of acquiring, editing, marketing, and managing their businesses, and that the production savings are less substantial than the agents and authors think they are. This was a predictable tug-of-war. In every creative enterprise, the content provider and their representatives are in pretty much of a constant haggle with the business side that controls distribution over how to apportion revenues.
The reality is that a compromise formula will emerge (and I'm told that serious discussions are under way among a variety of publishers and agents). What seems to be happening is that e-book prices for new books are roughly comparable to those for trade paperbacks--somewhere around $15--and out of that, authors eventually will get in the range of 25 percent, or about $4 per copy sold. The more complicated question is on backlist titles that were written before e-books were a factor, and for which there are fewer marketing and promotion costs to cover. On that score, the authors probably can expect more than 25 percent, but publishers still need to charge each book with a portion of their overhead expenses. Moreover, digital books need to be converted from their analog versions and stored in servers, all of which carries expenses. In any case, the splits--as royalties always have been--are a contentious issue as are the subsidiary rights on foreign sales, audio, and movies.
For the moment, while Wylie has infuriated publishers and done his authors no favors in the Amazon deal, he has brought the issue of e-book royalties to the front rank of digital matters to be clarified, which is actually a plus. As long as I've been in publishing, some agents always have thought that they should deal directly with retailers, in effect taking on the role of publishers. Invariably, the agents and authors realize that supporting books--editing, marketing, promoting, storing--can be expensive and requires the investment of cash, which may not be recoverable from sales if the books don't sell. Agents prefer to collect money on behalf of their clients rather than spend it, which is why, ultimately, they choose to turn over the risks of producing books to publishers. I'm betting that relationship will persist well into the digital age and whatever succeeds it.
The outcome of e-book royalty tussle will be a better deal for authors than publishers would like, and a better deal for publishers than authors (and certainly Wylie) favor. But we can be sure that, whatever the resolution, it is only a matter of time before the next squabble over revenues starts. That's business.