Joe: And despite all this, legacy publishers don’t realize a revolution is afoot. Barry: I think they’re aware of it, but in an abstract way. I talk to a lot of people in the business, and when most of them talk about digital and the changes it’s causing in the industry, you can tell they’re imagining a future that’s safely abstract and far off. So

So why didn’t the Times include digital sales from the outset? Or at least from some point after digital sales became more than a niche. Why did they wait until Amazon was selling more digital books than paperbacks? Joe: Perhaps reporting the truth was somehow not aligned with what the NYT perceives as its interests.

Joe: Because I dropped the price.

Currently, my novel The List is the #15 bestseller on all of Amazon. I wrote that book 12 years ago, and it was rejected by every major NY publisher. I self-published it on Amazon two years ago, and it has sold over 35,000 copies.

In other words, the more stories and novels you have available, the more you’ll sell. Barry: Gotta just jump in here to point out the significance of this. It means that a writer’s best promoting tool is once again her writing. Advertising costs money. New stories make money.

The question, then, is what advantages does the previous technology retain over the new technology? If the answer is “none,” then the previous technology will become extinct, like eight-track. If the answer is “some,” then the question is, how big a market will the old technology continue to command based on those advantages?

legacy publishers are now agreeing to what are called “lookback” provisions on digital royalties? Joe: You mean the clauses that says, three years after publication, the two parties will renegotiate the digital royalty?

Joe: We figured out that the 25% royalty on ebooks they offer is actually 14.9% to the writer after everyone gets their cut. 14.9% on a price the publisher sets. Barry: Gracious of you to say “we.” You’re the first one to point out that a 25% royalty on the net revenue produced by an ebook equals 17.5% of the retail price after Amazon takes its 30%

We figured out that the 25% royalty on ebooks they offer is actually 14.9% to the writer after everyone gets their cut. 14.9% on a price the publisher sets. Barry: Gracious of you to say “we.” You’re the first one to point out that a 25% royalty on the net revenue produced by an ebook equals 17.5% of the retail price after Amazon takes its 30% cut,