Almost exactly a year ago I wrote this:
Traditional publishing may not be in freefall yet, but it’s standing on the edge, just one big shove away.
That shove is now being applied. It had started being applied by early entrants in the self-publishing realm, such as Lulu.com. But the player with enough muscle to actually move entrenched traditional publishers off the cliff has only relatively recently entered the fray — Amazon. Amazon is going to eat the lunch of traditional publishing for one simple reason — pure economics.
Sure, they have a variety of forays into publishing that I could discuss, including Seth Godin’s much-hyped, but still likely to have an impact, Domino Project. I’m sure I don’t need to point out the signficance of the name. No, what I wish to point out is something much more mundane and, well, crass. It’s simply this: if you publish with a traditional publisher you will be lucky to get a 15% royalty. With Amazon’s Kindle Direct publishing option royalty rates start at 35% and can be as high as 70%. Now I’m no math wiz, but that’s an eye-popping difference.
If you’re an author, just how badly do you want Harper Collins to publish your book? Would you give up 55 percentage points of royalty for the privilege? Yeah, I thought so.
Meanwhile, the implications for libraries seem almost as stark. Whatever you thought you knew about collection development has gone out the window. Don’t expect Amazon to churn out a catalog of new titles — at least not in paper form. And good luck with your approval plan. As authors break in a big way for the big payout that ebooks are now potentially providing and as e-readers approach the price point of free, we’re in a completely new world. It would be best if we get used to the idea — and soon.