"Where Does All the Money Go?" If that's a question you ask yourself about your dwindling book royalties, the answer shouldn't surprise you. According to Authors Guild president Roxana Robinson, a major portion of a writer's income gets gobbled up by--who else?--Amazon, Google, and other major Internet content providers. Here's a teaser from her speech:
"Suppose you decide to buy a copy of my most recent novel, Sparta, which came out in 2013. Chances are that you'll buy it on Amazon. The company offers a new paperback copy for $12.98. Also a new copy for $4.33. You can buy a used paperback for $0.01. Probably you won't choose to buy the more expensive copy. Why would you? You'll buy the cheaper one.
"But how can a new copy be sold for so little money? That new copy is probably one that the publisher sold off to make room in the warehouse. If a book's sales slow down and the publisher needs the space, it may sell copies at a deep discount to make room for other books. Many contracts have clauses that will allow the publisher to pay no royalties under these circumstances. So the publisher gets paid, and the middleman (in this case that kindly and book-loving site "Turnpike Liquidators") will get paid. And, of course, Amazon will get paid. Only the author will receive nothing for this sale of the new book she wrote.
"These cheap new books, which Amazon posts on the same page as more expensive new ones, will of course cannibalize the sales of the expensive ones. Publishers know this, but they do it because they want some money now, instead of no money now or maybe some money later. So those cheap books flood the market, and every time a customer chooses one of them instead of the more expensive one, the author loses royalties."