Shared royalties model for digital content. Or something else?

August 9, 2024 8:48 AM

I'm creating some original content - a set of digital workshops - for an organization and they're doing all the hosting and marketing. My idea for compensation is to receive, for example, 80% of the income from, say, the first 10 instances sold, 70% from the 20-50th instances sold, 50% from the 50-100th instances, and then 20% from the 100th-250th. Or something like that.

Is there an existing model in use to work out how to share income in a way that's relatively fair? Or is it just, we negotiate what we negotiate? Am I just describing licensing? Or what model would you suggest?

To answer some questions that might arise, this is not work for hire, since they are not directing me about what to create, and in fact the workshops are based on material I've written a book about.

Compensating me a flat hourly fee for creating the digital materials seems disproportionate to the company's ability to market and sell them perpetually.

I understand digital licensing, but I think I'm looking for specific models that show this "tapering" in a way that recognizes the front end value of the creator, while also acknowledging the long tail work of the host/marketer.

posted by cocoagirl to Work & Money (4 answers total)

Seems unnecessarily complex. I'd propose: They get reimbursed their direct expenses for hosting and marketing first. You then split every other dollar via some ratio that's up for the two sides to determine.
posted by NotMyselfRightNow at 11:40 AM on August 9

I sell e-books through Kindle, and their plan is very simple: 70% royalty to the author, 30% for them.

I'm sure videos are different, but "why are you different from Amazon so you need more money" would be a good question to ask as you negotiate.
posted by zompist at 1:44 PM on August 9

As someone who gets asked to implement wacky royalty arrangements every day: changing royalty rates are a bad idea unless you are 100% positive that the person handling the accounting has software that can automatically implement this, or there's some kind of regular audit structure in place. Otherwise, it will never get done properly.
posted by acidic at 2:02 PM on August 9

I don't see why you'd get less money the more items are sold! I think a consistent percentage amount makes sense - and if you do that, make sure there's a way for YOU to track the units sold as well.

Another option could just be a flat buyout - you could get paid one amount to make the product up front, and then a second (flat rate) amount to sell it to them for keeps. This has the benefit of not requiring accounting or followup, and might work in your favour if the information can "go stale" at some point meaning the sales of it will naturally decline as the info or video format becomes outdated.
posted by nouvelle-personne at 2:17 AM on August 10