They say it’s just around the corner - the “iPod moment”. Books are about to go digital at last, according to many publishing pundits, and the publishers are pre-emptily crying poverty.

On the heels of the recent WGA writer’s strike, book publishers are already showing authors their empty pocket linings stating that the swing to digital publishing and distribution is a long term, low-profit investment for them.

It will be years before we are even close to making money from this and I think we should see a little bit of latitude from authors.

Large publishing houses are stating that although there are lower physical production costs for an electronic distribution, titles still require editorial, sales, marketing, promotion and publicity. Add to this list the new costs of converting files into multiple formats [eh?],  digital warehousing, anti-piracy protection,  and content and metadata tracking.  Random House have suggested this additional investment will mean they will not turn a profit until beyond 2013.

The argument about royalties centres around a proposed 15% royalty on net receipts from digital sales. It is higher than the standard 10% for hardback sales, but significantly lower than the current 25% rate for ebook sales in the US.

Ebook makeup is still extremely low, however with less than 1% of the entire US book market. At such a rate, it is not surprising that the costs per unit sold seem pretty high right now.

The question for me is whether the publishers are not forward thinking enough to appreciate that aggregate costs will drop significantly as the market grows, or whether they are merely looking to engineer inflated profits when that time comes.

It is a difficult space to predict, but I feel that publishers need to break away from seeing the digital market as simply a non-paper version of the printed market. As the music industry has been forced to learn over the past year or two, the it is the millions of digital consumers who will ultimately dictate how the digital space is exploited.

We currently see top name artists pushing their content out for free (Nine Inch Nails, Radiohead), and new artists doing the same to build reputation and audience. I suspect we will see the same for the publishing world. Who might be the first big-name author to distribute a brand new book in electronic form, completely free of charge?

At this year’s London Book Fair, IBS took a survey of 140 publishers to discover only 19% have systems in place to manage author royalties.

With author royalty rates low enough to force many a ’successful’ author to maintain their writing as a part-time sideline to their day-job, the need is has never been more urgent to ensure they are being paid every penny they are owed in a timely fashion.

I have to say, as someone who will likely one day have a deal in place with a publisher, this is very worrying, and smacks of little respect for the author as a business partner in the creation and selling of books.

Some additional stats from that survey:

• 79% believed they should sell directly to the consumer (as opposed to through bookstores)
• 56% said they already did
• 89% believe there is still a place for the high street bookstore (I like this one the most!)
• 83% believe consumers would soon completely accept ebooks as a valid way to consume books (despite only 35% of the respondents admitting to have used an ebook themselves)

This clip from an interview with screenwriter Harlan Ellison, on the attitude of Hollywood studios expecting writers to offer themselves up for free - very timely. In case you haven’t come across him, Harlan’s writing credits include the original Outer Limits, Star Trek, Babylon 5 - see his Wikipedia page for more detail.

[youtube=http://www.youtube.com/watch?v=mj5IV23g-fE]

Credit to the Renegade Writer Blog for popping it on our radar.