Author Royalties in the Hot Seat

The result was HarperStudio, which publishes two books a month (70 have been signed and 16 published since the imprint was launched in April 2008) and limits itself to a maximum $100,000 
advance. In exchange, the studio offers a 50/50 profit split.

All of Miller's deals so far are with either proven, prolific authors or new authors with "their own tribe of people they can reach online," he says. These are individuals who feel they should get a bigger slice of the pie in exchange for delivering a guaranteed audience—Gary Vaynerchuk, author of the best-selling social media marketing guide "Crush It!" (one of three best-sellers for the imprint in its first year) is one example.

Miller's approach avoids all the uncertainty and complexity of negotiations over print versus electronic royalties. "For us, it's moot because [whether] audiobook, e-book or foreign rights, it all goes into a shared pool of revenue from which we subtract all our costs and then split the difference," he notes. "So authors who are working with us are getting 50 percent of the profits of e-books as well as all the other formats of the book, a 50/50 split across the board, which helps get you past having to count which splits are better or worse and how you publish the different formats. It tends to take the focus away from which formats are making which amounts of money."

This also means there's no wory about whether e-books should be released before or after print, or which format to stress in marketing. "It makes the e-book a less disruptive technology … so [authors are] more enthusiastic about leading with the e-book or combining it in various ways to use it as a marketing tool," he says.

Naturally, all this makes contracts simpler. Direct costs are taken out before the across-the-board revenue split, and these costs are agreed on ahead of time, including those for book tours and other marketing initiatives. Miller calls this arrangement "a true partnership."