Straight from the mouth...

...of the Jolly Fish, in this case.  I posed some questions and some insecurities about Jolly Fish Press's tiered royalty system in my recent "Alternative Perspective" post.  They were kind enough to email me a very helpful response that I'll just include in its entirety here:

Dear Mr. Husberg: 

The tiered royalty platform is a common royalty practice among traditional publishers. Basically, this platform is divided into a few tiers of book sales, and in JFP's case, it is 1-5,000, 5,001-10,000, and 10,001 and above. Should the author's book sales fall within the first tier, he will be paid 8% based of the book's list price. The royalty percentage increases when book sales reach the second and third tiers accordingly. This form of royalty only applies to printed books. JFP pays a 35% royalty for all ebook sales.

The 50-50 royalty model is a digital only royalty platform on which both the publisher and author are required to put in equal share of production, distribution, and marketing efforts. Hence, the equal distribution of profits as well. Please note that Hydra is a digital only publishing platform created by Random House to reach out to more authors. While the royalty may be lucrative, sales and marketing efforts still need to come from the author. 

It is important to know that in most traditional publishing contracts, the author is given the time to write and market his book at the same time. It is no good writing a good piece, when the author fails to show up at events or does little to build his readership. These are some of the efforts the author has to do. One of the biggest problems many publishers face is the author refusing to do any marketing because he has "done his job of writing." In our industry, it does not matter if the author writes the greatest American novel, if he doesn't put in his effort in building his readership, no one will read his book, regardless of the amount of advertisements the publisher puts in. So, it is important to know that the business of book publishing is a business, unless the author writes for his own gratification, and not for the money.

Traditional publishers invest a whole lot of money in the production of one single book. The average production cost for one single title is about $250,000. Now, that's an investment. Traditional publishers work hard behind the scenes to bring the raw manuscript to a commercial and professional level worthy of shelf space in a bookstore. This includes the long and tedious editorial process (for example, Paolini's Eragon spent one year in the editorial process before even going to layout), book design, book marketing, book and author publicity, distribution of ARCs for reviewers, scheduling events for the author, etc. These efforts require the skills and dedication of teams of professionals and pundits. This is also one reason why the quality of traditionally published works will always surpass that of self-published in many levels (for example, see Hocking's Trylle series before and after St. Martin's picked it up). The truth is, a traditional publisher does more than most authors realize.  

A lower royalty cost does not in any way push the costs to the author. The profit margin of an average book is so low that the publisher goes home with only a dollar (or less) for every book sold. In the end, the author is the one who always goes home with the bigger sliver of the pie.   

We hope our response answers your questions. 

Regards,

Jolly Fish Press

They did a pretty good job of answering my questions, and in a timely, courteous manner as well.

For me, the takeaway from this whole thing is that the publishing world is changing.  The proverbial cheese has been moved, and people are scrambling to find it again.  There's a lot of stuff going on from all angles (traditional publishing, small presses, self-publishing, etc.), and it is both a terrifying and an exciting time to be an author seeking publication.  Right now, there really isn't a straightforward "right" way to go about getting published*.  It's a cop-out and cliche, but this is really a "whatever works for you" moment.  What are your strengths as a writer?  What are your strengths as a person, for that matter?  Depending on what your answers are to those questions will determine largely what kind of publishing route is best.  At least, that's how things are looking for me, right now.

But one thing is certain:  it pays to keep tabs on the business.




*  That doesn't mean there aren't wrong ways, though.