e-Book-News.de, BuchReport, and Boersenblatt report that starting on 1 July, Tolino will drop the payout for ebooks costing less than three euros. eBooks priced above that point will continue to earn 70%, but ebooks priced below 3 euros will only generate a 40% royalty. In comparison, Amazon's KDP pays a 35% royalty for ebooks which sell for less than three euros in Germany.
Tolino explained that operating costs was the driving force behind the change. Jördis B. Schulz, Director Tolino Publishing, explained in a statement that the download cost and payment charges were so high for cheap ebooks that Tolino could no longer justify paying the 70% royalty.
In related news, Tolino will also be withholding a higher VAT rate starting on 1 July, from 7% to 19%.
The change, I'm told, reflects an unanswered question on the business relationship between authors/publishers and distributors like Tolino. A license is taxed at 7%, and a digital service at 19%, and Germany's tax collectors are insisting that the higher rate applies. Tolino is changing their policy just to be safe.
Launched in 2013, Tolino is an ebook platform where the costs are shared among the participating retailers. It is supported by seven retailers and tech companies (Thalia, Weltbild, Hugendubel, Club Bertelsmann, Libri, eBook.de, and Deutsche Telekom), and has its own servers, mobile apps, ereaders, and tablet.
The consortium had been paying the 70% royalty ever since it launched Tolino Media, its own publishing platform, last April. When it launched it was limited to authors from Germany, Austria, Switzerland, and other EU countries. It distributes ebooks to the ebookstores operated by the seven retailers as well as Tolino-partnered ebook sellers in the Netherlands, Belgium, and Italy.
image by sbchemnitz