|The level of enhancement of an e-book is|
measured in dancing bears
An e-book is not the same as an app. It's not a book saved as PDF and distributed online. It's not a book that's just stuck up on a website to read online. An e-book (for our purposes) is a book that is produced in one of the standard e-book formats, such as Kindle or epub, and intended for download and reading either on a dedicated device (such as a Kindle of Nook) or using a reading application on a computer, phone, tablet or some other bit of iCandy. Essentially, it's a glorified XML file under the skin.
Because it's pretty easy to produce e-books, lots of people are rushing their half-baked novels and other books into e-book format and either giving them away or sticking them on Amazon. And some competent writers, both previously published and new, are doing the same. I'm not getting into arguments about that here, as this is about how to speak publisher.
When you're talking to a publisher about e-books, it's most likely to be in the context of whether/when they are going to produce an e-book from one of your books. An e-book is just the text of your book, and pictures if it had pictures originally (assuming it was published on paper first). If the publisher intends to add new pictures, video, sound (other than just a read-aloud function) or any other bells, whistles and dancing bears, then that is an enhanced e-book. If they want to make something which is launched as a separate program with its own icon rather than opening in a piece of e-book reading software, that is an app (from application).
If a publisher wants to make an e-book from your work, or buy e-book rights, that means they are interested in producing something which is essentially the book and nothing else. There are no dancing bears. It can have some internal links, perhaps external links, and a read-aloud facility and still count as an e-book. The industry-standard royalty rate emerging (and endorsed by the Society of Authors as a minimum) is 25%. The publisher should make the e-book available for more than one platform, so not just a Kindle book, for instance - but they don't have to. The different formats have to be made separately, so not all publishers do it. In particular, not all self-publishers do it.
Some publishers (especially educational publishers) will try to fob you off with the same royalty as for a paper copy of the book, or even less. The lowest offer I have seen is 2%, which is risible.
Why should the royalty be at least 25%? Well, if the book has already been produced - so it's a backlist conversion - there is very little work involved in converting it (unless it's very old). The editing and so on has been budgeted for and paid for from the printed copies and this is a bonus revenue stream. There is no reason why only the publisher should benefit from this, as they can't make any money at all without using your work (which they will call 'content'). Whether the e-book is from a new or old book, there is no cost for printing, shipping, or warehousing. There is considerably less risk involved than in paper publishing as there is no minimum print run (indeed, no concept of a print run).
Another reason is that e-books often sell at a lower price than printed books, so the author's income will drop if introducing the e-book reduces paper sales and the royalty level is the same. It's not about being nice and generous to authors - it's about maintaining a business model that works. If writers don't make enough to live on, they will find another job and write fewer books.
If the publisher wants to make an enhanced e-book, they will add some dancing bears. There might be extra audio (music, sound effects, spoken word commentaries, interviews), video, animation, new pictures, embedded PDFs (used for large diagrams and tables that don't convert well), links to other parts of the text, pop-up explanations, external links to websites, and so on. The royalty rate for an enhanced e-book varies and will reflect the amount of extra work and investment the publisher has undertaken in licensing and commissioning extra material. It might be a royalty of 10%, but that's a ballpark figure - there are no rules.
If the publisher wants to make an app, it's pretty much all dancing bears and not necessarily very closely related to a book at all. It's likely to be full of pokable and swipable buttons as well as audio, video, animation. Those bears will really dance. The royalty for an app depends on the author's input. Apps are very expensive to produce, so the argument about 25% being fair because e-books are almost free to produce (after the editorial process) doesn't apply at all.
Many apps cost more to produce than a printed book, but the price point still tends to be low because the public has got used to free and cheap apps. A well-kept secret is that very, very few publishers (none?) are actually making a profit from dancing-bear level apps.
In reality, the situation is not this clear-cut. There are plenty of people/small independent publishers producing things they call apps which are really no more than enhanced e-books. They might have one or two interactive features, rather rudimentary animation, and a bit of sound but are actually no more sophisticated than the electronic books we were using on school computers in the 90s. However, if they are compiled as stand-alone bits of software, they are technically apps. If you sign a deal to do an app, make sure you know what will be produced. A sub-standard app will damage your reputation more than no app at all.
Many contracts signed in the last 20 years included rights for technologies that did not then exist, either in catch-all clauses or in vague 'electronic form' clauses. I know of one publisher whose standard wording included 'all rights discovered or yet to be discovered throughout the known and unknown universe'. It's too late now if you signed that deal - but be careful with new deals.
You don't need to sign over all e-rights in one go. You can specify separate deals for, or withhold any or all of, e-book, enhanced e-book and app rights. For some publishers, e-rights will be a deal-breaker and you will have to make a choice. But you can always say you will licence the rights for a couple of years and see how things go. If they don't exploit the rights, take them back. If they make an e-book and sell no copies, take the rights back.
Do you even want any enhanced e-books or apps of your work? Some writers (including Julia Donaldson) don't. There is evidence that children using apps and enhanced e-books gain less reading benefit from them as they concentrate on the interaction with the software and not the narrative development. What you decide will depend on what you think a book (your book) is for. Or it might depend on how poor you are. But decide on your terms, knowing what is all involves.