448 COPYRIGHT
profit" or similar plan, the publisher is not considered to be entitled to make his own profit on paper, print- ing, etc., but must account for these at the cost to him ; and in any event the publishers' accounts must be fully open to the author. On the whole, the pay- ment of royalty, on the usual American plan, is more satisfactory. The customary royalty is ten per cent, or in the case of authors of established repu- tation whose works have large sale, as high as fifteen or twenty per cent, when the publishers cover all ex- penses, except that on school books and "subscrip- tion" editions the royalty is usually five per cent. When an author pays for the plates or for the edition, the return is substantially higher, as fifteen or twenty per cent to the ordinary author. The royalty is usually reckoned on ordinary cloth binding, unless otherwise stated in the contract, and almost invari- ably not on copies printed, but on copies sold. A royalty on "all copies sold" was construed in the King's Bench Division by Justice Walton, in Neufeld V. Chapman in 1901, to cover all forms of publica- tion, including royalty on a proportionate part of the sales price of a periodical. The publish- The publisher does not, as is sometimes assumed, er's share get the Other ninety per cent as profit;' he gets the difference between the receipts from the trade or pub- lic on copies actually sold — averaging perhaps two thirds of the "retail price," on which the author's ten per cent (really thus fifteen per cent) is reckoned — and the cost of making the entire edition and of adver- tising and marketing the book. The author, in any event, gets a return proportioned to the success of his book. If its sales are small, the publisher makes a loss; if large, the publisher makes a profit increasing proportionately after the initial outlay for publication has been covered.
