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Show Me the Money: Royalties, Rights & Riches for Indie Authors

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The Indie Way with Erika Liodice

I made my independent publishing debut back in 2011, and if this journey has taught me anything it is that realistic expectations are critical to a productive, rewarding experience. Back then, “indie publishing” was still relatively new and largely untested. Indie wunderkinds, like Amanda Hocking, were making headlines for earning millions overnight. Many authors flooded in, hoping to cash in on the Kindle gold rush. Some did very well and others ended up disappointed.

Since then, we’ve all learned a lot about the independent publishing space, and it’s become a legitimate way for writers to make a name for themselves and reach readers. We’ve seen the arrival of career indies who are in it for the long haul as well as traditionally published authors who have crossed into hybrid territory to reap the benefits of both models.

But for writers who may be considering their options, it’s still not clear what one can realistically expect to achieve with independent publishing. Fellow Writer Unboxed contributor Donald Maass, president of the Donald Maass Literary Agency in New York, sent me a list of questions he frequently hears from authors who are considering going indie. Today, I’m going to address three questions that pertain to royalties, rights, and riches to help the undecided gain a realistic view of this path. As a point of comparison, be sure to check out Kathryn Magendie‘s recent post “Royalties: What This Writer Made, Once Upon One Time” for a candid view of her experience with traditional publishing.

Before we dive in, I should mention that I’m not a lawyer, accountant, financial advisor, or literary agent, so read the fine print in your contracts and user agreements, and seek professional counsel when needed.

  1. When an author publishes through a self-publishing platform, what share of revenues is paid?

Royalty structures vary by platform. The author’s cut is typically determined by the book’s list price, its physical attributes (which impact production costs), and distribution model. Let’s take a high-level look at how several key publishing platforms currently structure their royalty models:

  • Kindle Direct Publishing (KDP) enables indie authors to publish and sell ebooks and paperbacks directly to millions of Amazon customers. Authors generally earn royalties equal to 35% or 70% of the ebook’s list price minus the distribution cost (which is determined by the ebook’s file size). Whether you earn the 35% or 70% royalty rate is dictated by KDP’s List Price Requirements. In a nutshell, if your ebook is listed at $2.99 USD or more, it qualifies for the 70% royalty rate; a list price less than $2.99 USD qualifies for 35%. Learn more about KDP’s ebook royalty structure.
    • KDP also provides authors with the option to distribute their Kindle ebooks exclusively through Amazon by enrolling in a program known as KDP Select. When you enroll your ebook in KDP Select, it is offered for free to readers who subscribe to Kindle Unlimited (KU), a premium, all-you-can-read subscription service, as well as the Kindle Owners’ Lending Library (KOLL), which is available to Amazon Prime members. Participation in KDP Select will increase your royalty rate to 70% and make your title eligible to receive a portion of the KDP Select Global Fund each month. Since the KDP Select subscription model offers your ebook free of charge to subscribers, royalty payments are based on the number of pages each customer reads in your ebook for the first time, no matter how long it takes. In exchange, authors agree to a 90-day exclusivity period, during which they cannot sell the ebook through any other platforms. After 90 days, you can re-enroll or “go wide” by selling your ebook in other marketplaces. Learn more about publishing ebooks through KDP Select.
    • If you’re publishing a paperback, KDP offers a fixed 60% royalty rate, less printing costs (determined by page count and ink type). If you enable Expanded Distribution, which makes your paperback available to booksellers and libraries through distributors, the royalty rate is 40% of the book’s list price effective in the distribution channel at the time of purchase, less printing costs. Learn more about KDP’s royalty structure for paperbacks.
  • Barnes & Noble Press allows indie authors to sell hardcovers, paperbacks, and ebooks directly to millions of Barnes & Noble customers on bn.com. Authors earn 55% of list price for print books published directly through B&N Press or 40% of list price for titles published with a competitor and distributed to bn.com. Ebook royalties vary by price range and whether it was published directly or through a competitor. Here’s a breakdown:
    • List price: $0.99-$2.98 USD, Royalty = 40% (direct), 35% (competitor)
    • List price: $2.99-$9.99 USD, Royalty = 65% (direct), 70% (competitor)
    • List price: $10-$199.99 USD, Royalty = 65% (direct), 35% (competitor)
    • Learn more and try B&N’s royalty calculator.
  • Apple Books for Authors is used by indie authors to publish and sell ebooks through Apple Books. Authors earn 70% of the list price, regardless of price point, with no delivery fees or exclusivity requirements. Learn more about Apple Books royalty structure.
  • Kobo Writing Life (KWL) makes it possible for indie authors to sell ebooks and audiobooks directly to over 10 million people globally who read with a Kobo e-reading device or app. For ebooks, authors earn 70% of list when priced at $2.99 USD or more. For audiobooks, authors receive 32% of the list price for subscription purchases or 45% of list for a-la-carte purchases, provided it’s priced at $2.99 USD or more. KWL does not require authors to sign exclusivity deals. Learn more about Kobo Writing Life’s royalty structures.
  • Google Play Books enables indie authors to make their ebooks available to more than 2 billion Android users globally. Authors earn 70% of the list price on ebooks sold to customers in more than 60 supported countries. The default revenue split is 52% for partners who have not accepted Google Play Books’ updated Terms of Service (TOS) and for ebook sales in certain countries. Learn more about Google Play Books’ royalty structure.
  • Audiobook Creation Exchange (ACX) is a marketplace that connects authors, literary agents, publishers, and other rights holders with the talent to produce an audiobook, including narrators, engineers, recording studios, and other producers. It empowers rights holders, such as indie authors, to choose how to produce an audiobook (do it yourself or work with a producer) and where to distribute it. Whether you produce your audiobook through ACX or show up with prerecorded files, your royalty options are 40% for exclusive distribution (limited to Audible, Amazon, and iTunes for an initial term of seven years) or 25% for nonexclusive distribution, which enables you to go wide. Learn more about ACX’s production earnings and costs.
    • A Royalty Share deal is an option for rights holders who want to work with a producer through ACX but don’t want to pay the production fee upfront. Instead, the rights holder and producer split the 40% royalty from each sale, providing each with 20%. To enter a Royalty Share deal, the rights holder must select exclusive distribution. If the rights holder opts to pay the production fee upfront, he or she can collect full royalties and choose exclusive or wide distribution.

If you don’t want to sell directly into the channels above, you can use a distribution platform with broader reach. Each has its own way of handling royalties:

  • Smashwords offers global ebook distribution to major retailers and public libraries. Authors earn 60% of the book’s list price from major ebook retailers and up to 80% when the book is purchased through the Smashwords Store.
  • Draft2Digital (D2D) is a global ebook distributor that takes 10% of the book’s retail price for each sale. It offers a free manuscript conversion tool, enabling authors to transform their manuscript from a Word document to high-quality ePub and .mobi files that will work on any e-reading app or device as well as print-ready PDFs to use with print on demand (POD) services. For added convenience, D2D recently unveiled payment splitting, making it easier for authors to collaborate on projects without having to worry about managing royalties. Learn more about publishing with Draft2Digital.
  • IngramSpark brings global ebook and print book distribution under one roof, connecting your book to over 40,000 libraries, major retailers, and independent bookstores in person and online. Unlike many other platforms, Ingram Spark charges a setup fee ($25/ebook title, $49/print book title, or $49 for both when they are uploaded at the same time). In terms of royalties, authors are paid 85% of the net revenue received by IngramSpark for every ebook sale, regardless of the reseller. Compensation for hardcover and paperback copies is calculated according to trim size, interior color and paper quality, binding, cover, page count, list price, and more. Use Ingram Spark’s calculator to estimate how much you’ll earn on your print book.
  1. What happens to subsidiary rights such as audio, translation, and movie/TV? Do the click agreements give control of those rights to the platform?

Subsidiary rights refer to all other forms of your book besides printed and digital. They enable your book to be recorded as an audiobook, translated into foreign languages, adapted for film or television, and more. “Subrights” represent additional revenue streams for indie authors, so it’s important to know who controls them. [Read more…]

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