Guaranteed: E-book Royalties Will Rise When Publishers' Hands Untied

I don't know if people still make pinkie bets, but when I was a kid that's what we called friendly wagers with no money at stake - just the satisfaction of being right. And I'm making a pinkie bet right now: If publishers can untangle themselves from the current e-book pricing model that ties their hands with a $9.99 ceiling, author royalties will rise. Any takers? Warning - before you extend your pinkie, you must know that I never bet on anything I'm not absolutely certain about.

Currently the e-book royalty offered to authors by five of the Big Six is 25% of the publisher's net receipts, and Macmillan's is even lower. Indeed, it's the lowest in Big Publishing: 20%. And because it is, Macmillan has attracted less support from the author community for its facedown of Amazon than it would otherwise receive. Here for instance is a line from a Silicon Valley blogger that called Macmillan "evil": "they're trying to force all ebook vendors to adopt the new contract, while forcing authors to accept a below industry average (20% vs. 25%) on ebook royalties."

If, as a result of negative publicity, Amazon relents on its rigid pricing formula, e-book revenues will increase and it will be so much harder - indeed, it will be intensely embarrassing - for publishers to continue parceling out the mingy royalty they now proffer. How much higher will the royalty go? Publishers will kick and scream over every point they have to give up, but in time someone will blink and go to 50%, and the rest of the industry will follow.

You can bet the house on that, but I'll accept a friendly pinkie.

Richard Curtis (who is happy to disclose that E-Reads pays 50% royalty to its authors, and has paid it from Day One, 2000).