Author Royalties in the Hot Seat

That may be, but e-book rights also represent "a gigantic moving target," says Ethan Ellenberg of The Ethan Ellenberg Literary Agency in New York. "On the one hand, there is a concern about the nominal royalty—what will we be paid on each 
individual unit sale? And that royalty is up in the air. It's being negotiated in dozens and even hundreds of publishers."

Smaller, direct e-book publishers, 
especially in the romance area, are paying as much as 37.5 percent to 40 percent, 
Ellenberg says, while traditional publishers are "all over the place"—from 25 percent (Random House) to the same as paperback royalties (Harlequin).

The trend among traditional publishers has been to pay authors "a bit more" for e-books, he says, though it is universally true that electronic rights have been part of the equation for more than a dec-
ade. The biggest shake-ups in new purchases of books have come when a title has already seen considerable success as an independently published book, and 
e-rights are bought by publishers as a secondary buy.

With traditional distribution channels for print books currently under siege in a changing retail landscape, publishers are understandably worried about the precedent set with any e-book deal, Ellenberg says. "Some of the most aggressive players in the e-book market don't share our concerns or our economics. Amazon is a good example, because Amazon wants to drive you through a gigantic Web site that sells everything from air conditioners 
to toys."

The Audiobook Precedent and Experimentation
With retail price pressure on conventional books sales increasing (as seen in last year's "price wars" between Amazon, Target and Wal-Mart), publishers are loathe to give up profit margins on emerging products. Still, a precedent does exist for the current situation of e-books entering (and shaking up) the mix: audiobooks.