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Very Interested
08-04-2009, 02:28 AM
Hello! I just have a quick question regarding how royalties work viz-a-viz foreign sales. I keep reading about a split between publisher and author, say 70 / 30. Does this refer to a licensing agreement? What about royalties? Does the author also collect royalties from foreign sales? Thanks for any clarification.

Mumut
08-04-2009, 03:56 AM
If I buy books from my foreign publisher I get a 30% discount on the price but I don't get any royalties on those sales. If the publisher sells books through bookshops etc, I get royalties on those sales. The amount with my publisher is 10% of the price the book was sold for. My Australian publisher is the same for books I buy to sell when I'm guest speaker at meetings. But the royalties are 15% of the net income received by the publisher. Actually, they work out about the same.

I'm interested in the derivation of the word Royalties in this usage. There's nothing Regal or Magestic at all in the amount the author gets from the sale of his/her books through bookstores. It's a myth!

But others might have other deals with their publishers and I'm sure they'll tell you what happens for them.

dantem42
08-04-2009, 09:13 AM
Hello! I just have a quick question regarding how royalties work viz-a-viz foreign sales. I keep reading about a split between publisher and author, say 70 / 30. Does this refer to a licensing agreement? What about royalties? Does the author also collect royalties from foreign sales? Thanks for any clarification.

I have foreign rights out to Germany (Droemer) on my U.S. published book. Normally foreign rights are handled by an agent; the publisher's royalty payment is typically similar to U.S. royalties (maybe 10 - 15 percent of the cover price of the book depending on the publisher, volume targets etc.). Typically for foreign rights, your literary agent gets a higher percentage (maybe 20 percent of the total paid by the publisher vs. typically 15 percent for domestic sales). Often this extra is because the agent has a sub-agent in-country and they split the proceeds.

A complication: you'll often encounter foreign tax withholding when the foreign publisher remits payment to the agent. This may be recovered either by taking a credit for foreign taxes paid on your U.S. return, or else paying the tax in the USA and then submitting a copy of your tax return to the foreign tax authority proving that you paid tax in the USA. Most countries have agreements with each other avoiding double taxation.

On the other hand, your agent in many cases will base his 20 percent commission on the gross amount, not the net after foreign withholding.

Very Interested
08-04-2009, 05:46 PM
Thanks! I guess I'm still a bit confused because in one of these "How To" books about publishing, it states that, for example, on proceeds from foreign LICENSES, on translations, the author receives generally 75% and the publisher 25%; while on English language licenses, the author receives 80% and the publisher 20%. Does this split refer to a license for a foreign publisher to distribute the book? If so, does the author still receive a royalty rate per book sold if the novel is distributed by a foreign publisher?

Danthia
08-04-2009, 05:53 PM
It depends on who sells the rights.

My publisher bought World English, so they get to publish it in all places where English is the primary language. (North America, UK, Australia). They then sold the right to a UK Publisher. That sale counts as sales of my US book, and the money goes toward earning out my advance. (This is where it gets tricky, so if I get this wrong, someone correct me please) There's a different royalty split for this type of deal, because I didn't sell it, my publisher did. So they get X amount and I get Y. From what I understand, the royalty rate for this type of deal is a tad better for the author than selling rights themselves (through their agent).

Then there are the foreign rights your agent sells for you. Those get you an advance (hopefully!) and royalty rates usually pretty similar to what you'd get in the US. The sale works same as a US sale, where you earn out your advance and then you'd get royalties past that. There are tax issues and all kinds of lovely legal stuff, but that's why you pay a 20% commission instead of 15% to your agent. She'll need to work with a foreign rights agent who handles all that stuff. The foreign rights agent also helps sells your book to those countries. (these two agents split the commission)

I think licensing is different from rights. Those numbers seem way off to be regular royalty rates, but I do remember something about those numbers when my agent was explaining it to me. It has to do with the publisher selling the rights to another publisher, as they're allowing another house to publish what they own, or licensing the rights. That split might be the split of the royalties, not the full price of the book. (This is the part where she kept losing me and I felt dumb to keep asking her, LOL.)

dantem42
08-05-2009, 06:45 AM
Thanks! I guess I'm still a bit confused because in one of these "How To" books about publishing, it states that, for example, on proceeds from foreign LICENSES, on translations, the author receives generally 75% and the publisher 25%; while on English language licenses, the author receives 80% and the publisher 20%. Does this split refer to a license for a foreign publisher to distribute the book? If so, does the author still receive a royalty rate per book sold if the novel is distributed by a foreign publisher?

See my previous; I have sold the foreign rights in German to the German publisher Droemer. They will publish the book in German, with an advance/royalty structure similar to stateside. I pay my agent 20 percent of what I get.

But let's say Droemer sells the rights of my book for an e-book or an audio book in German to another party. Then most of the money goes to me, the writer, not to them. So maybe the split there might be 75 me, 25 them (of course with commission to the U.S. agent from my part).

By the way, the German rights do not entitle my German publisher to act as an agent for example in other languages; that is, Droemer does not have the right to sell the foreign rights for French, Italian etc. It's basically only stuff specifically in German. I'm not quite certain about film rights, but I think if a German filmmaker wanted to make a movie in German, I still hold these rights under my film rights; that is, Droemer is not entitled just because it's German.

Very Interested
08-13-2009, 06:26 AM
Just want to thank you for all the very helpful replies I've received. Much appreciated!