It's really stunning to see the percentage take from writing a book vs. putting something on the app store. People complain about Google and Apple taking 30%, but for these books, they're taking 75% for electronic books and 90% for print! 30% doesn't sound so bad to me compared to that. (I realize for print their costs are higher, but still - 90%?)
My wife is a published author (and ghost writer) and my sister-in-law is a VP and acquisitions editor for a small publishing house.
The different between 30% and 75% is mostly historical, and the app market vs. the publishing world run on different models: There is not really an equivalent of advances or physical publishing in the app world. Royalties and app revenue splits are are roughly equivalent, though.
As an author, your leverage on advances and royalties is your personal brand equity. "Becoming" by Michelle Obama is almost an automatic winner due to her brand. If you're not well known, your publishing deal is abysmally standard.
It costs some money to print and distribute a physical book vs. a digital book. This is slowly changing as digital distribution flexes up. But print is still the preferred model for people. [1]
And there are additional layers of writing a book in the traditional model: acquisitions, developmental and copy editing being some of the big ones. And you'd be shocked how many non-fiction books have a ghost writer.
Finally, there's the reality that the publisher is taking a risk: their high percentages are covering all the books they took a loss on.
>And you'd be shocked how many non-fiction books have a ghost writer
Not really. Whether it's writing ability or simply time a lot of successful people aren't really equipped to write a book from scratch. I assume a pretty common model is to conduct a long set of interviews, make some background and other material available, and the ghost writer creates a draft. Even if the subject wants a lot of direct involvement, starting out with a lot of content is a lot easier than a blank page.
The point made here is important, publishers lose money on most releases but make a lot of money on the successes much like venture capitalists. The downside of each book is protected/limited but the upside is unlimited. So one book that sells 100.000 copies makeup for a lot of books that sell a few thousands.
(In theory) publishers are doing more for you than Apple is. At a minimum they're providing some level of editing services and (maybe) validation of a quality floor. They also have distribution deals that you mostly can't get on your own.
Remember too that publishers aren't seeing a big chunk of the list price which is going to discounts and middlemen of various sorts.
That said, publishers in general don't do as much as they used to and independent publishing will be the right answer for many people--understanding they'll probably have some money out of pocket to make up for the services publishers provide.
Typically your royalty is calculated against the final sale price of the book -- after publisher and retailer have taken their cut. Usually the retailer takes the biggest cut.
Retail markup is usually 35% to 55%, but what a lot of people don't realize is that retailers usually have a method of returning their unsold stock, which the publisher is on the hook to liquidate somehow.
