Tuesday, April 26, 2011

The issue of Royalty RPGNow vs Lulu

Pat over at Henchman Abuse has a rebuttal to my post on RPGNow vs Lulu. It is well written except for one problem.

The non-exclusive royalty rate is 65% at RPGNow/DriveThruRPG.

From OneBookshelf FAQ
You earn a royalty of 70% if you are exclusive to our marketplaces or 65% if you choose to be non-exclusive and sell through other online stores. Our share of revenue covers our server upkeep, bandwidth, payment processing, marketing and customer service.
*In reply to Pat's Comment*
This is not available on a public link but the royalty rate is the same for print.

Q: How do royalty payments work on printed copies?

When you set-up a print option on one of your products, you will be shown the current cost to print each copy of the product. You will then be asked to set the margin you want on that title. For example, the print cost on a title might be $4.41 and then you choose to set your margin at $5.58, thereby setting the consumer price for that printed title at $4.41 + $5.58 = $9.99.

When that printed copy sells, the print cost is removed from the purchase price and we split the margin that is left with you per our usual royalty agreement with you (i.e. the same royalty percent you get on download sales). This is credited to your publisher royalty account in real time just like when a customer purchases one of you download products
*reply to Pat's further comments*

OK at first glance I was scratching my head at the linked agreement and then I remembered what the clause is for.
(b) OBS shall pay to Publisher a fifty-five percent (55%) royalty on the sales of Licensed Products for which Publisher submitted the Product to OBS as a hardcopy printed book suitable for OBS to scan and produce a digital file version
If you have a book with no digital file, you can send the book to OBS and they will scan it in for you and post the digital files for you to sell. But... they take a bigger cut in this case so you only get 55%. This is NOT the royalty rate for print. The royalty rate for print is the SAME as the royalty rate for PDFs as stated in the FAQ. The one exception is where you decide to offer the scanned digital file as a print copy. Which somebody with a popular out of print title from the 80s may decide to do.

Reading over my original post I wasn't clear on this point. For project larger than 84 pages and willing to use b/w publisher's quality then it is a wash. Lulu has a better royalty rate, RPGNow has a better shipping rate to foreign customers. RPGNow has a slightly better royalty rate on the PDF version and you have the ability to package multiple files and update notification while Lulu all you can offer is a single PDF.

But if you have a lower page count than 84, or if you are using color, the RPGNow is the better deal.

On Lulu, 16 pages can only be printed with standard paper for a cost of 5.90. ($7 - $5.90) * 80% = $0.88
On RPGNow, 16 pages can be printed full color for a cost of $2.50 + .30 fee ($7-$2.80) * 65% = $2.73

For b/w publisher quality printing Lulu gets a lot better the larger your margin. As Pat points out the 15% or 10% difference start adding up.

Majestic Wilderlands at digest 140 pages I make .36 more on Lulu 5.92 than RPGNow 5.56. Of course the difference grows the more is charged for the book. But I make 4.41 on Lulu for a PDF sale and 4.55 on RPGNow. I only get that by using Publisher Grade and as a consequence any oversea buyers faces the infamous large lulu shipping charges.

But what does this mean for the OSR Publisher?

*DISCLAIMER* please don't take this what if of an analysis of what it really cost James Raggi to produce Loftp RPG. He uses his own printer so this is purely a what-if.

Well let's look at one of the more expensive products out there Lamentation of the Flame Princess RPG. James Raggi has his own printing done but let's present it was going to be done Print on Demand. At 32.50 Euro it works out to $47 or so. Let round it up to $50. It is 360 total pages if combined. It is the European equivalent of digest size. I may be wrong about this but let's go with the smaller size.

On Lulu we find that 360 pages at digest size for b/w publisher quality is $7.90. So James Raggi would earn ($50 - $7.90)*80% = $33.68.

A RPGNow the cost would be $6.60 per book and he would earn ($50 - 6.60) * 65% = 28.21. A $5.47 hit per book. If he was exclusive then he would get $30.28 per book at hit of $3.40 per copy.

If he sold a 100 copies over a year, which is not unreasonable for a high quality project, $547 (or even $340) is a big hit for recouping costs.

However the price he would pay is that anybody outside out of the United States would get hit by exorbitant shipping rates. So he and any other publisher will have to weigh the lost overseas sales vs better royalty. I don't have much hard data but my impression is at least a quarter of the market for the OSR is overseas. There was a lot of the print MW that didn't get sold overses until I put it up on RPGNow.

But to be honest projects like the Lamentation of the Flame Princess are an outlier. Most OSR projects hover far below the $50 selling price $30 margin. In fact range roughly from $5 to $15. There the difference are much less dramatic and as in the case of my Majestic Wilderlands less than a dollar.

I appreciate Pat bringing up the royalty issues and his well thought out post but I still stand by my original recommendation that OSR publisher should consider RPGNow over Lulu for their publishing needs. This may change because of the evolving of the PoD technology so check and compare periodically.

10 comments:

Pat said...

You're quoting the PDF royalty rates. Print royalty rates are different. It's 55% for non-exclusive print rates.

Rob Conley said...

See my edited post

Pat said...

Yesterday I had gotten sent a link from OneBookshelf and their PDF contract I was supposed to print out to sign scan & email back said 55% for print. That's what prompted me to post.

Pat said...

http://onebookshelf.com/agreements/OBS_NonExclusive_Agreement.pdf

Akhier the Dragon Hearted said...

This is some interesting follow up data to your previous post. I have a question though, which is easier for someone doing this for the first time? I don't currently have anything worth selling but if I ever do which would be easier for me to get started with?

fireinthejungle said...

Thanks for clarifying the production costs and royalty percentages. I've been following your posts recently and scratching my head trying to decipher the numbers you've given, but now I finally "get it". Though the 55/65 discrepancy is still muddying the waters.

FWIW, MagCloud gives 100% royalty for print products. An example of charging $7 for a 16 page book:

On MagCloud, 16 pages can be printed full color for a flat rate of .20 per page. 16 * .20 = $3.20 printing cost.

($7-$3.20) * 100% = $3.80 profit per book.

Rob Conley said...

@Akhier, Lulu is easier by far to get setup.

Akhier the Dragon Hearted said...

Thank you for the quick response.

Rob Conley said...

OK at first glance I was scratching my head at the linked agreement and then I remembered what the clause is for.

(b) OBS shall pay to Publisher a fifty-five percent (55%) royalty on the sales of Licensed Products for which Publisher submitted the Product to OBS as a hardcopy printed book suitable for OBS to scan and produce a digital file version

If you have a book with no digital file, you can send the book to OBS and they will scan it in for you and post the digital files for you to sell. But... they take a bigger cut in this case so you only get 55%. This is NOT the royalty rate for print. The royalty rate for print is the SAME as the royalty rate for PDFs as stated in the FAQ. The one exception is where you decide to offer the scanned digital file as a print copy. Which somebody with a popular out of print title from the 80s may decide to do.

Pat said...

Oh OK, I see, it is 65% then