Should My Royalties Be Reduced When E-Books are Sold at Large Discounts?

Q. Should the typical provisions about reduced royalties on copies sold at high discounts apply to e-books?

Answer: No. Unlike print-on-paper books, where each copy sold at a deep discount represents significant expenses incurred by the publisher which pertain specifically to the copy sold (paper, printing and binding costs and, sometimes, shipping and warehouse charges), the cost of creating and transmitting additional copies of e-books sold at a deep discount is negligible or non-existent.

One way to handle this easily in your contract is to simply add the following at the end of the section dealing with reduced royalties if the point was not covered in the section:

“None of the reduced royalty provisions in this section will apply to any e-book or other electronic editions of the Work.”

(Originally published in the Winter 2007 issue of the Authors Guild Bulletin. © Mark L. Levine)

Answers to questions on this site are general in nature only. You should consult a lawyer for information about a particular situation. For more information about book publishing contracts and issues, see Levine’s new book.

About Mark Levine

Mark L. Levine, a New York lawyer, is a recognized authority on book publishing contracts and the author of Negotiating A Book Contract. He currently writes the Contracts Q&A column for the Authors Guild Bulletin. More about Mark

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