Pragmatic Bookshelf Royalty Rates

When we started the Bookshelf, we wanted our authors to share in the success of their books, so we set our royalty rates to between 40% and 50%. That is, an author will receive between 40% and 50% of whatever gross profit we make on a book. We felt back then, and we still feel, that this is the highest overall royalty offered by any technical publisher (most publishers offer something in the 10–18% range).

But it isn't always easy to compare different publishers, because the definitions of gross profit (or whatever they use) differ wildly. Our definition is that we take whatever money we receive from the sale of a book (in whatever form), deduct the direct cost of production (which is zero for eBooks, and a couple of dollars for paper books), and then split what's left according to the royalty rate. We also account for our costs of copy edit, indexing, and typesetting by splitting them (again according to the royalty rate) between the author and us. So if a book costs $5,000 to copy edit, index, and typeset, and we're paying 50% royalties, then the author's royalty account starts with a $2,500 negative balance.

We don't pay advances, but we do pay royalties quarterly. If a book enters our beta program, the author starts receiving the royalties at the end of the quarter.

In the last few years, we're had a number of prospective authors tell us that other publishers woo them by saying that our 40–50% royalties are somehow illusory—that by the time the author gets a payment the figures have somehow been shaved down to the point where we pay the same as everyone else. And that's just FUD.

So, in order to help people compare, attached is a chart (click for a bigger version). It shows the royalties we've paid so far on our titles that have been in print for at least a year. Eight percent of the titles have earned less than $10k. Several of these are vanity titles we produced on behalf of private companies, the others are books that sold into very specific, narrow niches (because we felt someone should do it, and even at these low volumes we can do so profitably).  Ninety-two percent of our titles paid more than $10k in royalties, and forty-two percent paid more than $50k. Twelve percent earned into six figures.

I'd welcome publishers who talk down our royalty payment schedules to publish their figures. I know many will have some titles that earn a lot more than $400k. But I'd be most interested in the distribution—how much does a typical author make? I'm proud of the fact that we've set up an environment where authors of good books can earn back at least a reasonable portion of the investment they made in writing.

Comments

[Gordon J Milne]

now that is an impressive little chart. it is almost enough to get me off my backside and write that technical best seller I've been wanting to write all these years.

ok, that was trifle sarcastic but it certainly makes one think.

so are you prepared to tell us which titles are in the top 12%?

[John]

Peter Cooper had an interesting post on his 'Beginning Ruby' at Apress two weeks ago. Here http://beginningruby.org/what-ive-earned-and-learned/.

[joe]

Your openness is refreshing! Thanks for sharing.

I'm curious what the breakdown is between ebooks and paper books, also, how many titles are are included in your dataset.

[Chuck van der Linden]

I'm told a large number of technical books never make back their advances.. (Obviously that doesn't apply in your case) so yeah I'd sure love to see other publishers put out their data as you have.

I know my wife's 'Testing Code Security' book has earned her royalties in addition to her advance, but then it is a bit of a niche book being not just about security, but testing as well. So I'm not sure where it would have ranked if on your chart without having her dig into records and find the info on number sold (plus some estimate of the initial production costs..)

[Peter Cooper]

@John: I suspect it was some of the FUD raised by commenters (including a couple of Dave's competitors) on my post that inspired this post. I'll try and link back to this as it's still getting a lot of traffic and this is great information.

[Chris Adamson]

Having written one book with the Prags and two elsewhere, my mental taxonomy is now "writing for Prags" versus "writing for free". Yes, between 10% royalty * coauthors * Amazon discounts * shrinking computer book market, it really is that bad.

[Mike]

Dave,

Are you counting titles that make $25k in both the $10-$25k range and the $25-$50k range. Based on your graph, it's a little hard to tell if and title that makes $25,493 versus a title that makes $25,997 are in the same group or in two groups. And likewise for the other overlapping categories. Or is this a rounding issue with your charting program?

[Dave Thomas]

Mike:

Each title appears in only one slice.

[Richard Hamilton]

I've started a small imprint, XML Press (http://xmlpress.net ), that focuses on publications for technical communicators. We use a very similar approach to Pragmatic Programmer, splitting revenue after direct expenses and up-front costs. We're just starting (2 books out, with more in the works over the next few months), so I don't have the wealth of data that Dave shows here. However, I can confirm that the actual share received by our authors is much better than they would see with a traditional 10% or 15% royalty.

Part of the confusion may be that comparing a traditional royalty percentage and a revenue sharing percentage is an apples and oranges comparison; they are percentages of different things. Even within the revenue sharing model there will be differences. For example, it's likely that a 50% revenue share with Pragmatic Programmers would yield a different result than a 50% revenue share with XML Press or someone else, because of discounting, actual costs to print, and other expenses.

What I try to do with our authors is give them as much detail as they want about the actual cost of printing books, the costs that get charged against revenue, and the pricing/discount structure. Then they can make an informed decision.