Royalties vs Revenue Sharing: What Writers Need to Know

Two offers can both say "70% to the author" and pay wildly different amounts. A contract that says "10%" can pay you more than one that says "25%". The percentage on its own tells you almost nothing.

What matters is the sentence around it: a percentage of what, set by whom, paid when. Most of the confusion between royalties and revenue sharing comes down to those three questions, so this post walks through each model with real numbers and ends with the things worth checking before you sign anything or click "I agree".

What a royalty is

A royalty is a payment per copy sold, usually a percentage of a price. It's how traditional publishing pays.

The Authors Guild's model trade book contract lays out the typical terms at large publishers: hardcovers at 10% of the retail price for the first 5,000 copies, 12.5% for the next 5,000 and 15% after that. Trade paperbacks at 7.5% of retail. Ebooks at 25% of the publisher's net receipts.

Traditional royalties usually come with an advance, which is money paid up front against future royalties. Authors generally don't have to repay it just because sales were too low, as long as they've met the terms of the contract. But you don't see another royalty payment until the book has earned enough to cover it. That's called earning out, and plenty of books never do.

Indian contracts often work on the same idea, quoted as a percentage of MRP or of what the publisher receives. A worked example from iPleaders shows why the wording matters: 10% of a ₹100 cover price is ₹10 a copy, but 10% of what the publisher receives after a 20% bookshop discount is ₹8.

The two words that change everything: "list" and "net"

That ₹10-versus-₹8 gap is the biggest thing to understand about royalties.

A royalty on list price (retail price, MRP) is calculated on what the reader is charged. A royalty on net receipts is calculated on what the publisher collects after discounts to retailers and distributors, which can be a lot less. The Authors Guild's commentary on its model contract says net receipts tend to be about half the list price, so the same percentage on net pays roughly 40 to 50% less.

That's how a "25%" ebook royalty from a traditional publisher can work out smaller per copy than a self-published ebook's "70%". The 25% is of the publisher's net. The 70% is of the price you set.

What revenue sharing is

Revenue sharing splits the money readers spend between the platform and the creator, at a fixed ratio. There's usually no advance and no publisher between you and the reader, and the stated share is much larger. In exchange, you do most of the work a publisher would do, and the platform sets most of the rules.

Self-publishing royalties from Amazon KDP are called royalties, but they behave like a revenue share. You set the price, and Amazon keeps a fixed cut. On an eligible ebook sold in the US and priced between $2.99 and $12.99, KDP pays 70% after taxes and a delivery fee are taken off. A $4.99 ebook with a two-megabyte file, no VAT and the US delivery charge of $0.15 per megabyte earns about $3.28. The exact figure depends on the marketplace and the file size. Our post on what self-published authors realistically make has the full arithmetic, including Amazon India.

On BrightChapters, Books use a straightforward revenue share. Readers get the first two chapters free, and every chapter after that costs 30 coins to unlock. Coins convert at two to the rupee, so that's ₹15 a chapter, split 70% to the author and 30% to the platform. The author earns ₹10.50 every time someone unlocks a chapter.

Stories work differently. They're free to read, and readers who enjoyed one can appreciate the writer with coins. There's no set price, so how much a story earns depends entirely on what readers choose to give.

The third model: a shared pool

There's one more model, and it's easy to mistake for the other two.

Amazon's reading subscription, renamed from Kindle Unlimited to Kindle+ in October 2026, doesn't pay per copy or per sale. Subscribers pay a monthly fee, Amazon sets the size of a monthly fund, and authors enrolled in KDP Select get a slice of it based on their share of all pages read, and now pages listened to as well. KDP's own help page puts it simply: "Author earnings are determined by their share of total pages read and total pages listened to."

So your earnings depend on your share of that month's eligible pages read and listened to, and on the size of the KDP Select Global Fund, which Amazon reviews monthly. The effective rate changes from month to month. Audiobook listening is part of Kindle+ in the US marketplace for now, and because it draws on the same fund, authors are watching to see whether the per-page rate holds.

Side by side

What to check before you agree to anything

Start with the base. Is the percentage of the list price, of net receipts, or of what a reader paid? If a contract only says "15% royalty", ask what it's 15% of, and get the answer in writing.

Then the price. Who sets it, and can they change it without asking you? A publisher who discounts heavily for a promotion changes what a net-receipts royalty is worth.

Exclusivity matters more than people expect. KDP Select requires your ebook to be exclusive to Amazon for each 90-day term, which is the price of getting into the Kindle+ pool. Some traditional contracts grant rights for the life of copyright, including formats and languages you might never get around to using. Read what you're giving up, and for how long.

Look at how and when you get paid: the schedule, any minimum balance before a payout, and what reports you'll see. A royalty you can't check is a royalty you have to take on trust.

And find out whether the terms can change. Platform splits and pool rules can be revised. A signed contract usually can't be changed without your agreement, which is one reason traditional deals are slower and more careful.

So which is better?

Neither, in general. It depends on the book and on you.

A traditional royalty pays a small percentage, but it often comes with an advance, editing, a cover, distribution into bookshops and someone else's marketing budget. A revenue share pays a much bigger slice but leaves almost all of that work, and its costs, to you. A pool favours books that generate a lot of eligible reading or listening, which tends to mean long books and series that subscribers read straight through.

Many writers mix them: a serial on one platform, a finished ebook on another, a print deal later if one comes. That works as long as you track which rights went where. If you're starting out and want to see how readers respond before any of that matters, you can publish on BrightChapters for free, and our guide to publishing a book online for free covers the other routes.

Whatever you sign, read the sentence around the percentage. That's where the money is decided.

Ready to put this into practice?

BrightChapters' Write page is free to use, with no account needed to start a draft.