A Publisher’s Perspective on Profits: ebooks vs print


    In early June 2013, Harper Collins held an investor’s day where it presented financial data through the company’s third quarter. The CEO, Brian Murray presented more than 100 slides but the most interesting one was the following:



    Why is this slide so interesting?  Well if you are an author you’ll immediately see the disparity between author and publisher with regards to the net income split.  For years, authors have been saying that the 25%/75% split was treating authors unfairly, now we have a publisher proving this publicly with data they are providing.

    For those who don’t immediately see the issues lets break it down a bit: First let’s back out the author’s royalties so we can see exactly how much profit there is for sharing.  Also keep in mind that in both comparisons all of the COSTS have been factored in – so we are talking about pure profit.

    • A $27.99 print book produces a profit of $9.87 the author gets $4.20 (42.5%) and the publisher keeps $5.67 (57.5%)
    • A $14.99 ebook book produces a profit of $10.49 the author gets $2.62 (25%) and the publisher keeps $7.87 (75%)


    What we see is that publishers earn 135% more than the authors do for print books, but for ebook this increases to 300%. Now one could argue, and I’m sure many publishers have, that when ebooks represented a small amount of the sales so this disparity isn’t such a big deal.  For instance when ebook sales were 5% the amount of money lost wasn’t    Today, industry wide ebooks make up more than 20% of the total books sold. But consider this, in genre fiction that number is MUCH higher. In a June 26, 2013 article with Wired Magazine, Allison Dobson, Random House’s VP and digital publishing director put the ebook sales at 60% to 70%. I can confirm that for my own books (which are in the fantasy genre) ebooks are 55% of my total sales.

    So what kind of money are we talking about here?  Well let’s look run the numbers under the current royalty rates and what might be deemed a more equitable distribution.  For this comparison I’m going to take a book that earns $100,000 and has sells 50% in print and 50% in ebook.

    Under the current model the publisher would receive 50,000  x 57.5 + 50,000 x .75 = $66,250 while the author gets $33,750.  If the ebook rate were adjusted to equal the print royalty share, then the publisher would receive $57,500 and the author would receive $42,500 which is another $8,750 in the author’s pocket or an increase of 20.6%.  I don’t know about you, but I don’t like taking a 20% pay cut.

    What other are saying

    Not unsurprisingly, this data…especially since it is now coming from the horse’s mouth that is setting the rates, upset authors and agents alike. Brian DeFiore (Member of the Board of Directors for the Association of Authors Representatives),said:

    This chart illustrates very clearly something that agents have been arguing for several years now, and that publishers have been saying just isn’t true: that their savings on printing, binding and distribution make up for the lower revenue from lower e-book prices– and that increased profitability is coming entirely off the backs of authors.

    He concludes his post with:

    How can anyone in this industry see that as defensible?


    I would love for any publisher maintaining the 75% / 25% ebook share to address Brian’s question.


    1. […] do with publishing speed and not anything due to embarrassment, but this is the same HarperCollins that leaked the higher margin on ebooks compared to hardbacks, and the smaller cut authors earn at t…. An agent comments in the prior link that publishers lied for years about whether e-books […]

    2. […] Most retail works on a wholesale model. The retailer pays a percentage of the suggested list price, and then they can choose to discount and reduce their margins if they want. This is why you can walk into a bookstore and see a hardback marked 20% off. Publishers do not want Amazon to be able to sell e-books where they might compete with paperbacks. This, despite the incredible margins they make from each sale (partly because they pay their authors a laughable share). […]

    3. […] drop in e-book sales, which are actually more profitable for publishers than hardcovers, would certainly mean trouble for the industry. But I’m not convinced that’s […]

    4. […] A Publisher’s Perspective on Profits: ebooks vs print Interview with Award-Winning Author Michael Swanwick Pushing Fannish Buttons: Chi Fi vs The Westin River North Hotel of Chicago There’s No Right Way To Be A Fan?!? The Conjuring (2013) Deeper In: Interview with Jarvis Sheffield, Creator of the Black Science Fiction Society Books That Never Were – Farewell Atlantis Is the Anime Renaissance Upon Us? Fantasy Novels to Appeal to the Science Fiction Reader and Vice Versa Living With the Nazis What’s the Trouble With Selfies? Speculative Fiction and the Mirror Effect Open Source Horror: The Slender Man Interview with SFWA Grand Master Michael Moorcock Asni’s Art Blog: Time Artefacts When is a Convention Not a Convention? When It Is your First Convention! My List of the Best Time Travel Films This and That Books Are Forever Poetry Reviews: Cleveland Poets Stanley & Smith Doctor-Who-Matt-Smith The Artful Collector: Collecting and the 80/20 Rule It’s (Not) Rocket Science: John Aaron: “SCE to AUX” Review: Anatomy of Steampunk by Katherine Gleason Recap: “The Seven Wonders,” American Horror Story: Coven, Episode 13 The Other Victoria: Steampunk’s Queen Characters: Clare of Claymore Deconstructing Horror: Haunted Houses An Introduction to the Empire’s Corps Flags On The Moon: Apollo 12 (“Need To Jury Rig”) Interview: Dianne Gardner Review: The Sentinel by Arthur C. Clarke iHobby 2013 There’s Something About Night Vale Review: Lockstep by Karl Schroeder Interview with Award-Winning Author Lois McMaster Bujold A Different Type of Classics Illustrated Women in Armour vs. Chicks in Chain-mail Walking the Tightrope Between Innocent and Cynical […]

    5. […] e-books. I have yet to see Scott lash out at publishers for their unfair contracts and horrid pay. When HarperCollins released data showing that it makes more from an e-book sale than a hardback sale…, where was Scott? Where was anyone representing […]

    6. @Mark – those are “sunk costs” and if accounted properly should be evenly spread across both print and ebooks. So the relative %’s between the two would be the same. To give you some ball park numbers though, I’m in the process of self-publishing my Hollow World book and I used the same professionals that my big-five publisher does: Marc Simonetti for cover design, Betsy Mitchell former editor-in-chief of Del Rey for structural edits, Two copy editors both of whom work for multiple big-five publishers (Tor, Del Rey, DAW, etc). My total costs ran about $5,500. So you can rework the numbers taking that “off the top.”

      It should be noted that I used only “the best of the best” and paid them very well as I had Kickstarter money to fund it. When self-publishing I’ve produced books on my own for just $50 (ISBN & distribution fees) and usually would spend $500 – $750 per book on average.

    7. I’m no expert here, but it seems like this chart is missing some costs and is only covering the costs of physically producing and distributing a book. A few I can think of:

      1. Editing
      2. Proofreading
      3. Setup/Formatting
      4. Cover design
      5. Marketing

      Certainly, if I self-publish an ebook, I’m going to incur these costs (in time or money). I wonder how the formula looks if these costs are factored in.

    8. […] A Publisher’s Perspective on Profits: ebooks vs print Review: Hauntings, edited by Ellen Datlow Un Diálogo ameno con Daína Chaviano por M. C. Carper Deconstructing Horror: Haunted Houses Book Review: The Man-Kzin Wars – 25th Anniversary Edition – Created by Larry Niven Interview: Trenna Keating (aka Doc Yewll) from Defiance Female Heroes in Literature PÁGINAS DEL GÉNERO EN ESPAÑOL: 1 AXXON Erring On the Side Of Love: A Review of The Melancholy of Mechagirl by Catherynne M. Valente Lawyers in SPACE! An Introduction to the Empire’s Corps How Young is a Young Adult? Characters: Clare of Claymore A Fan’s History, Part 1 ASM Blog Horde Interview with Matt Mitrovich Ciencia ficción desde el extremo occidente Publishing: Let’s stop comparing apples and oranges Finding a Path to the Stars at the 2013 Campbell Conference Those Early Drafts Richard Matheson Filmography […]

    9. Michael,
      Once again you are giving us pure gold. Thanks for the insight. Having spent quite a bit of time in my life setting margins in various arenas, I’m sure that the publishing houses have no intent to slim the balance. After all they have to report to stock holders. Stock holders don’t care at all about the author. They care about increasing their profits.

      When we see changes in any market, this allows those setting the margins an opportunity to improve their position. Believe me they will drive a bus through that opening. Any chance to grab more margin will not be overlooked. The publishing houses are in it to make money. It is a business. Truthfully they don’t owe the writers anything. Simply put you don’t like the deal then we don’t have to publish you. I can’t fault them for that. It’s just business, not charity.

      It is good to see a few authors who have had the position to negotiate better for themselves, because their market value was high enough. Some authors have even had their Ebook rights revert to them because of how long they’ve been on the market.

      We are in a revolution period right now and everyone is trying to grab what they can. The big houses are trying to keep their doors open and have to submit to pressure to make money. Understandable. Writers don’t have to sign the contract, but they may also be under pressure to do so or face going unpublished. Self-publishing can hand a writer another card to play now in that negotiation, but many don’t have the ability to pull it off.

      As an author, I would like to see the percentages balance out, but I don’t expect it. (Check the music industry and movie industry. Their costs have dropped as well and margins have soared. They now love the digital age.)

      Keeping my eyes open to the shifting industry. It is settling in to try and find the new norm. These growing pains may take years to figure out.

      Greatly appreciate your valuable insight an unique perspective.


      • I agree with everything you say…and don’t expect publishers to change their rates. But…this opens opportunities for others who are more “author friendly” to make inroads. I’m about to sign a print only deal. The advance wasn’t huge (in fact is was 20% of what I was offered by another publisher for “full rights” but I don’t care about the advance because once I earn out, my income is the same regardless of that “temporary loan”

        So for this particular title I was able to….

        * Do a Kickstarter which raised $31,000 for production/marketing of the book
        * Retain the ebook rights such that I’ll get 100% of the profit (70% of sales price)
        * Sold the audio book rights and got a nice advance for that (4 times my first audio contract)
        * Sold the print rights for North America

        I still have non-NA English rights to be sold, and then there are the foreign markets. Both my audio publisher and print publisher are going to make “good money” but not “all the money” This will allow me to fully profit from the ebooks and provide a good partnership with those that have well defined distribution channels.

    10. I rarely buy hardcovers.

      I would like to see the same comparison for e books vs. trade paperbacks and mass market paperbacks.

      • My guess is they will be pretty similar. The return cost will probably be higher on mass market paper backs as they are not generally returned but stripped. I’ve heard some reports that indicate for every 1 mmpb sold 3 have been shipped.


    Please enter your comment!
    Please enter your name here

    This site uses Akismet to reduce spam. Learn how your comment data is processed.