Author Topic: 70/30  (Read 379 times)

Leegreg

70/30
« on: July 15, 2019, 09:59:08 PM »
For whatever reason the 70/30 split seems prevalent across digital stores, although, at least with ebooks, there are many hoops and exceptions.

The reason i started this topic is that Iíve noticed there is some pushback in other media.

Apple is getting sued over its version. This has a bit of a twist in that developers are arguing that the 70/30 split is unfair because the Apple App Store is the only way to delivery products to Apple ios devices.

If anyone else is a PC gamer, youíre probably buying games on Steam. Which uses 70/30 of course. Or did. Some time ago they added tiers where when a game gets into the high end (millions of $) the revenue split is reduced in favor of the publisher. This was an inducement to keep big publishers, who are and were starting to sell directly.

However, Epic Games recently came into a pile of cash (Fortnite) and for some reason decided to open a digital game store with an 88/12 split. They are also dumping that cash into signing exclusive deals and paying off returns for people pissed they canít get the game on Steam.

So far, Steam hasnít responded with a better revenue split, they appear to be relying on their better store front features and riding out the storm.

Now, to books!

While Amazon dominates, there are a wide variety of places to buy and sell, yet the 70/30 (or worse) still holds on.

Any ideas why it exists? And any soothsayers willing to guess if it will change for the better? Or get worse?

Iíd speculate the KDP select is simply too dominant for another company to break the Amazon near-monopoly by offering better revenue splits in exchange for temporary or permanent exclusivity. Without that exclusive period, there wouldnít be an advantage for a retailer to pay better.

 
 

Bill Hiatt

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Re: 70/30
« Reply #1 on: July 16, 2019, 12:52:30 AM »
Ironically, KDP's current split was an attempt to keep up with Apple, which was the first to offer 70/30.

Look at it this way. Trad authors frequently get far less than that, at least to judge by the number of complaints about it. I've read statements from some indies who were offered trad contracts and turned them down because of the royalty split. (These were authors already making a living from their writing.)

Of course, a good trad publisher also provides editing, formatting, cover design, and hopefully a decent amount of advertising. What Amazon and other vendors provide is mostly the store front. However, with Amazon in particular, it's a big store front. Despite all the algorithm changes and other nonsense, the typical author gets far more eyes on his or her books on Amazon than if selling from his or her own website. I think that's the primary argument for that 30%.


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Re: 70/30
« Reply #2 on: July 16, 2019, 01:17:01 AM »
There is a substantial overhead to managing an online store. There needs to be an equitable split in the royalties to pay for it. However, the 70/30 split isn't set in stone, just an industry standard that has become the norm. The 12% is probably unsustainable in a larger online economy and I suspect Apple/Amazon et al know that and are waiting for the shoe to drop.

The only time you will get a major shift in the monopolies is when someone comes along and becomes a serious threat, but they'd be more likely to try and buy them out, or close them down than shift their percentages.
 
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David VanDyke

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Re: 70/30
« Reply #3 on: July 16, 2019, 05:49:54 AM »
Smashwords offers a better split (20/80?) on books sold in their own storefront. So, if you don't want to set up your own e-commerce system, directing people to Smashwords is an alternative.

I'm far more concerned about the 60/40 split for audiobooks, with 40 going to the rights holder most times. There's no excuse for that other than "what the market can bear," and I hope somebody challenges Audible with a better deal for the rights holders.
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