Ebook distributor PublishDrive is now offering authors a choice of paying 10% of royalties or a flat monthly subscription fee of $100 and keeping all your net royalties.
If you pick the monthly subscription option then you will also get a one-off $50 Amazon advertising credit.
It looks like a fairly easy job of working out which would be best in terms of numbers. If you’re an author earning over $1,000 a month through PublishDrive then you would profit from moving to the $100 monthly fee. If you’re earning under $1,000 a month then you should stick with the 10% deal.
PublishDrive says you can switch between the options any time your sales go up or down. The terms and conditions of switching mean that if you upgrade to the subscription any time during the calendar month, it will be effective immediately, meaning that your royalties will be calculated with the subscription royalty rates in the given month. If you change back to the royalty share plan, it will be effective from the next calendar month.
That would seem to indicate that if it looks like your sales are going to be over $1,000 in a month you could switch even late in the month to get the benefit.
Royalty v Fee examples
Let’s take an example of an author with an ebook priced at $2.99, which will pay a 70% royalty rate. That makes a net amount payable to the author of $2 per sale (rounded down from $2.093).
The author opts for the $100 monthly fee and sells 500 copies of the ebook in a month to make a total of $1,000 for the sales, minus the fee, so they end up with $900.
Now if the author had opted to pay PublishDrive 10% of the royalties and no fee, he or she would, in effect, be receiving 60% of the total sales ($1.79 per ebook). On 500 sales that would work out at $895.
When sales rise, of course, the difference becomes much more marked.
For the fee-paying author selling 1,000 ebooks a month at $2.99 list price the figures would be:
1,000 x $2 (full 70% royalty) = $2,000 – $100 = $1,900.
For the 10% author selling 1,000 ebooks a month at $2.99 list price, the figures would be:
1,000 x $1.79 (60% royalty) = $1,790.
For 5,000 sales a month the figures would be $9,900 v $8,950.
For 10,000 sales a month it would be $19,900 v $17,900.
It looks very much like a no-brainer for experienced authors with substantial sales, probably across a sizeable backlist. On the 10,000 sales a month example the return on investment (ROI) would be a massive 1,900%, which works out as an annualized ROI of 108%.
Indie publishers with big backlists should note that 100 ebooks is the maximum number of titles on the $100 subscription option with quotes available from PublishDrive for higher totals. The 60% royalty option allows an unlimited number of titles.
However, anyone who’s been around the self-publishing scene for a few years knows that the ebook distributor/aggregator sector can pose problems.
2017 saw two ebook distributors — Pronoun and Type & Tell — shut up shop after their business models couldn’t stand up to the pressure of paying ‘100% royalties’.
Both those distributors were owned by major traditional book publishers. Macmillan had taken over Pronoun only a year before it closed it down. Type & Tell was owned by major Scandinavian publisher Bonnier but lasted just eight months.
The closures led to renewed upheaval for many self-published authors who had been attracted by the ‘100% royalties’ and had to shift their books over to another distributor, with many opting for tried and trusted Draft2digital.
But Publishdrive was also a popular option as it offered an ‘automated’ transfer deal for Pronoun authors.
Publishdrive was set up in 2015 and is based in Hungary with offices also in the US, UK and Germany. It has some interesting distribution options, including retailers in China and throughout Eastern Europe.
It appears to have fairly solid backing and its subscription business model doesn’t suffer from the same flaws as Pronoun and Type & Tell which aimed to make their money from a range of editorial services rather than charging anything for distribution.
It’s an interesting move from PublishDrive that’s obviously aimed to bringing in some of the self-publishing big hitters but in a business that’s very much reliant on partnerships let’s hope it can stand the test of time.