How much does it cost to produce ebooks?

HOW MUCH does it really cost a publisher to produce an ebook?

A new report commissioned by the NUJ and the Society of Authors looks behind the "collective wall of silence" around publishers' accounting on the real cost of producing ebooks and how much profit a publisher takes on each copy.

The Freelance has been asking for some time about ebook royalties. Authors sign a contract giving them royalites expressed as a percentage of the net profits, or of the retail price on each ebook sale. But that means 50 per cent, 30 per cent, 10 per cent of what, exactly?

The report, Economics of ebooks: where we are now by Tom Tivnan of The Bookseller estimates that "digital conversion" of a book for print to an ebook format ends up costing about 50p per copy plus another 65p for marketing, and the costs of digital conversion are falling. And publishers need only sell around 100 editions of an ebook title to break even.

So are publishers "absolutely raking it from ebooks?" The are other factors to be considered, such as the added cost of "digital warehousing" to keep those ebook master files secure against file corruption and power surges over the coming centuries, and maintaining an ebook's compatibility with yet-to-be-discovered formats and platforms. These cost may actually outstrip the costs of file conversion per ebook.

Then there's the important difference between the "wholesale model" and "the agency model" of ebook distribution, and how it affects the author's cut, and why ebook royalty percentages are predicted to rise.

You'll have to read the report for details. Please do take the time and trouble to do so. Appropriately, it's online only, at www.londonfreelance.org/1106eboo.html

At a very concise 2300 words, it's engagingly written, and contains several very good jokes and humorous references.

And please report to the Freelance's own Rate for the Job pages, any ebook deals you are offered, saying whether you get per cent of gross or net.

Last modified: 08 Aug 2011 - © 2011 contributors
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