Publishers Weekly:
A source confirmed that the biggest of the 'big six,' Random House, has adopted an e-book royalty that tops out at 40% for all titles covered by contracts signed before 1994. Sources said that Random is offering a starting royalty of 25% on these titles—which is the de facto standard in the industry on frontlist books—that then rises to 40%. The hike works, as one source put it, like a 'sales escalator,' jumping a certain percentage after a specified number of sales. While Random considers the agreement it has with Wylie and other agencies to be a standard, there is room for flexibility in different negotiations. The 40% royalty rate does not apply to digital editions of Random frontlist titles; that royalty remains 25%. ...
Agent Richard Curtis, president of Richard Curtis Associates, also questioned the supposed fairness of this new rate. “It’s fairer than 25%, and not as fair as 50%,” he quipped, noting that e-reads, the digital publishing company he also runs, offers, like Rosetta, a 50% royalty.
Although sources did not specify whether a similar backlist digital royalty standard has been adopted by the other big houses, agent Robert Gottlieb, chairman of Trident Media Group, said, “What Random House has done successfully is press the issue and work out a deal with Wylie that will help the other houses come to a similar conclusion.”
Certainly the presumption is that all of the big six are talking to agents about trying to come to terms on digital royalties for titles where e-rights are in question, and that agreements will closely follow the RH-Wylie settlement. The contentious issue over digital royalty rates for frontlist titles, however, remains to be resolved.
