Pub Rants

Category: electronic books

Content Creators Deserve a Larger Slice of the Earnings Pie

by Kristin Nelson

The verdict is in. With headlines such as HarperCollins Sales Near $2 Billion and Publishing Sales Jumped 18.1% and First Half Profits Soared at Penguin Random House, it’s clear that at least in term of earnings, Covid is not having a negative impact on publishing. I should be thrilled. My industry is sound. This is good for authors. Time to celebrate. Right? Yet, I’m grumpy. Here’s why. 

I’m glad that the future picture of publishing is rosy. I just wish there was movement in the industry to share that financial rosy picture with the content creators who make it possible. The opposite is happening. Royalty share to authors has contracted in the last five to seven years. 

A few examples:

For YA and children’s deals, when I first started in this biz, it was common to negotiate royalties for a project starting at 8% with an escalation to 10%. Now that royalty structure has gone the way of the dinosaur. Publishers hold the line at 7.5% (excepting grandfathered-in authors with higher royalty structures). All this despite the children’s segment being a huge revenue-growth sector for publishing for the last decade. As publishers earned more, authors received a smaller piece of the earning pie with this reduction in royalty. 

In the mid-2000s, Random House used to pay an ebook royalty of 25% of retail price until advance earn-out, and then it switched it to 25% of net receipts (which roughly equals about 17% of retail price). And there were deals where publishers offered 30% or even 40%. That went the way of the dinosaur, too (except for the highest echelon of established authors). And to be clear, I’m talking about traditional publishing here. Plenty of smaller, indie, electronic-only houses probably still offer those kinds of rates. 

The death of the mass-market format. This used to be a whole other royalty revenue channel for the author. It’s mostly just gone now (and ebook sales do not make up the difference). Despite the trade-paperback format becoming king and increasing earnings for publishers, there is no movement from the 7.5% flat royalty rate in over two decades. Two decades. Probably longer. 

And then there is audio. Earnings from this format have skyrocketed in the last five years. Yet here we are at 25% of net receipts for digital download and publishers “insisting” they must control audio rights when agents used to partner with audio-only publishers and would still prefer that. 

So yep. I’m grumpy. 

To add insult to injury, lemon juice to the wound, or insert another catchy phrase here, agents often heard several variations of the following this past year:

  • Because of Covid, we have an abundance of caution and that is reflected in the advance we are offering.
  • Because of Covid, sadly we’ll not be able to pick up this author’s latest option material.
  • Because of Covid, we are not supporting (translation: spending any money on) in-person events.

The litany is that publishing profit margins are “slim,” costs of printing are higher now, etc., etc., etc. Yet these recent headlines paint a different picture. And although Publishers Marketplace recently reported that at long last, advance levels are on the rise for the last quarter of 2021, the advance is only one part of the publishing-earnings pie. A book doesn’t exist without the content creator. The author. I’d love to see a headline that proclaims a publisher is offering authors a bigger slice of that earnings pie. Now that would make me smile.

Photo by Cats Coming from Pexels

Hey, The Publisher Might Need It Again. Someday.

by Kristin Nelson

Like your grandmother who couldn’t get rid of that semi-broken toaster because she might need it again someday, publishers have a surprising number of obsolete and defunct clauses hanging out in their publishing contracts.  Most just elicit a chuckle, but at least one can greatly impact an author’s earnings.

The publishing landscape has shifted so radically in the last decade, especially with the rise of ebooks and downloadable audio. Publishing contracts should shift to match. But like your Depression-era grandmother, publishers are loath to get rid of old clauses they’ve had for decades—even though the publisher will not invoke that clause in any foreseeable future I can imagine. Most of these clauses hang out in the subrights section of a publishing agreement. 

My favorite? The publisher’s right to sublicense electronic book rights. Back in 2002, when I first started in the biz, there was a scrappy little electronic publisher called Rosetta Books. Although hard to believe, in those early days right before the electronic shift, some publishers did indeed sublicense electronic book rights to this third-party publisher. In today’s landscape, there isn’t a publisher on the planet who would sublicense electronic rights when such a major chunk of their own profit comes from sales of this format. Why would they share? And yet, if you look at the sublicense section of our pub agreement, the publisher still has the right to sublicense this format to a third party (though we as an agency add “by author approval”). But hey, the publisher might need it again someday, right? So there it stays. 

Also going the way of the dinosaur (sadly, in my opinion) is First Serial. In short, first serial is the publisher’s right to license an excerpt from a novel to a major newspaper, magazine, or other outlet. Think back to when Cosmopolitan or GQ featured up-and-coming authors by printing a chapter or two of their forthcoming novels. But now so many magazines have disappeared (or gone solely online). With that, publishers shifted from licensing first serial to simply allowing an approved excerpt to be posted on top sites as a publicity push. That means no licensing fee. Yet lo and behold, there in the subrights section of a pub agreement is the first-serial clause with a 90/10 split in the author’s favor. (As an aside, you’ll also see a publisher’s right to sublicense mass-market rights—something I’ve never seen a publisher do in twenty years of agenting. But hey, might happen someday, right?)

But the one legacy clause that can bite the author in the you-know-what is the short-print-run clause. So be on the look out for it. What does short print run mean? Originally, after a publisher launched the initial print run into the world (which could be around 5,000 or 10,000 copies or more), it was expensive for a publisher to order a “short” print run, like 500 copies to ensure the title remained in-stock for buyers. Now with print-technology shifts (i.e., print-on-demand), the cost remains fairly static—even for a small print run. The clause originally allowed the publisher to reduce the royalty to the author for said short print run. But today, why should the author have to accept a lesser royalty rate when the publisher did not foot an additional expense? Right. They shouldn’t. 

Most publishers have removed that clause (finally acknowledging it no longer applies), but occasionally I spot that kind of language in a contract and it needs to be handled.

Also, if you missed this news, the Authors Guild made its model book contract public for anyone to read and access. So happy contract reading. 

Photo by 幻影 3D from Pexels

Polarization of Authors?

by Kristin Nelson

NINC is a terrific conference that caters to authors who are already multi-published. After attending last week, it’s clear to me that this conference is leaning more and more toward supporting authors who are exploring the indie-publishing route.

There was a decidedly anti-traditional-publisher sentiment in a lot of the panels that I both participated in and attended. This is not a commentary on the conference, by the way. It’s merely my observation. I think a lot of attendees would probably agree with my assessment.

But this is what worries me. I sense a widening division between authors who traditionally publish and authors who self-publish. And there’s no need for that. This is not an either/or question, nor is there only one right path to publication. (By the way, for what it’s worth, editors from “traditional” publishers much prefer the term “commercial” publisher.)

The conference vibe seemed to rest on a few assumptions:

1) That authors who stay with traditional publishers are stupid for doing so (not necessarily true) and that they can’t make a living/career by solely writing while partnering with a commercial publisher. (Also not necessarily true as plenty of traditionally published authors make high 6 or 7-figure incomes and enjoy the marketing campaigns their publishers invest in them.)

2) That indie publishing is the only route for an author who wants to be in control of his/her career (not necessarily true, as agents negotiate a lot of things in contracts).

3) That indie publishing is the only way to make good money or a living by writing (also not necessarily true, as some indies make really good money and others are not seeing as much financial reward).

It’s a disservice to the industry in general and to the conscious choices an individual author would like to make about his/her career by thinking in these kinds of divisive absolutes. Plenty of good reasons exist to choose one path or the other (or a combo of both).

Writers, in the end, there is only one right path–the path that is actually right for you and your career. And when you gather the data, weigh the pros and cons, and make a conscientious decision about what you’d like to explore, you are actually thinking like an agent. As that is what we do every day for each individual client at our agency.

If It Sounds Too Good to Be True, It Is

by Kristin Nelson

As I was reading Digital Book World‘s daily email blast, I came across a press release in the form of an article called Writer’s Digest Inks Deal with Book Baby. It was about a new self-publishing imprint called Blue Ash Publishing.

What struck me was this bullet point:

  • 100% Net Earnings on all sales: Blue Ash Publishing takes no commission on any book sales. Authors keep 100% of their book’s net earnings. Once retailers are paid their percentage, all remaining revenue goes back to the author. BookBaby offers the largest eBook distribution network, including Amazon, Apple, Kobo, Barnes & Noble, and many other popular retailers in more than 170 countries around the globe.

One-hundred percent of net earnings on all sales goes to the author. Sounds great, right? So immediately I started thinking like an agent. And the first question that pops to mind is, “What’s the catch?” There is no such thing as a free lunch. Just how exactly will Blue Ash Publishing make money in this venture?

Always follow the money…

I decided to do a little digging. First stop, check the source–Blue Ash’s website. Sure enough, right there on the home page was a link to Blue Ash’s publishing packages.

In actuality, writers need to think of this as a service or one-stop shopping for independent contractors to convert the book, do the cover, hire the editor, etc. This is not a publishing house. I repeat: This is not a publishing house. And from what I see on the website, they offer nothing that you can’t do on your own pretty simply, for a lot cheaper—and you’ll get paid directly rather than via a third party.

As my indie authors constantly remind me (and other writers who will listen), no one can publicize your book as well as you can. And it’s certainly not worth the $3,000+ for Blue Ash Publishing’s “Ultimate Package.”

Last but not least, because you are thinking like an agent, if you are going to explore this “service,” be sure to get a very clear definition of what “net” means to Blue Ash.

Bottom line? Pass. You can do this all for a lot cheaper than these price tags.

Worth The Conference Registration Cost

by Kristin Nelson

Last month I gave a webinar on how Digital is rapidly transforming publishing.

I love giving this workshop at conferences every chance I get because most writers are completely confused by the stories that are making today’s headlines and how that impacts writers. It’s my chance to really explain all that is going on.

Attendees always walk away telling me that my workshop alone was worth their conference registration cost. (Of course they could just be humoring me…) LOL

Still, it makes me happy. I always want aspiring writers to be informed as much as possible.

We are doing something unique this month and making the recording available for streaming.

New Adult – Perhaps the latest word for Chick Lit

by Kristin Nelson

Just recently I was doing an interview with a reporter from  Publishers Weekly and she asked if I found it surprising that the New Adult category had remained hot for so long. Here is my response: 
I don’t find it surprising at all actually. Publishing tends to run hot on trends. Sometimes to the point of saturation.
What indie self publishing authors are doing is writing and releasing a lot of content quickly. They see what works and what doesn’t and they shift course if something is not getting the desired reaction or when something is. They have that flexibility because it’s all digital.
Ten years ago, new adult was “hot” but we called it chick lit and it was less sexual relationship or romance focused. Then that became a dirty word and we had to call it contemporary romance or women’s fiction and age up the protagonists.
That left a hole in the market for a whole lot of readers who loved reading works in that genre but got tired of the same old Sex in the City type story lines.
New adult is the 20-something coming of age and the new novels hitting in this realm are emotionally intense (unlike their chick lit predecessors). Prolific indie authors figured it out pretty quickly that the audience was there and started writing for them. It hasn’t abated because the market is not yet saturated.
One thing about Jasinda Wilder is that she is creating her own niche within what people are calling New Adult. 50 Shades is a story of sexual discovery and awakening. What Jasinda is doing is more Nicholas Sparks. Her stories are about emotional healing and the relationship/romance is part of the healing process in a significant way. Now she is a little stunned at the velocity of the response/sales for Falling Into You.

Indie Author & Agent Partners – Thought 2

by Kristin Nelson

So last week when I was out in New York for the Writers Digest Conference, I gave a talk on why successful indie authors might want to partner with agents.

As I was putting together my talking points, I actually came to the conclusion that why they partner is the wrong question. The real question might be when should indie authors partner with an agent.

If  indie authors are becoming successful, an agent can accelerate their exposure in a big way. For example, I couple of weeks ago I took on self-publishing phenom Jasinda Wilder. On March 16, she released her 18th novel FALLING INTO YOU.

In less than one month, she sold 140,000 digital copies of this title.

Yes, you read that right.

That’s a crazy number of copies in a short period of time. She hit the NYT and USA Today list for several weeks in a row.

She decided to partner with me. My job is now to accelerate her exposure in any way possible. Within a week Publishers Weekly did a feature story on her and I imagine this won’t be the last coverage given her extraordinary success.

Would Jasinda get coverage without me? Sure. But there is no doubt I’m stomping on the gas. This can be incredibly beneficial in talking with publishers and for foreign deals.

Indie & Agent Partners: Thought 1

by Kristin Nelson

On Thursday I’m flying to New York City to give a presentation at the Writers Digest Conference on Friday morning. My topic is why a successful indie self-publishing author might want to partner with an agent.

If you are an indie author that doesn’t see the value in having an agent, I’m not really going to change your mind so there really is no purpose in reading my next several blog posts where I share my thoughts. However, if you are curious, I’m happy to share several reasons on why they do. Now of course I can only speak to why several indie authors have decided to partner with me. It’s going to vary depending on the author and the agent.  But I represent several and they find our relationship invaluable.

Thought 1: People are complaining about the archaic nature of publishing and why doesn’t it change.

Okey dokey. Let’s quit complaining and start having conversations to instigate change because how do you think change happens?

In May of 2012, I had Hugh Howey fly out to New York to sit-down with publishers. I thought it was important for them to meet him in-person just so they could see for themselves what a reasonable, personable, and forward-thinking author he was. He was not, and has never been, anti-traditional publisher. In fact, he’s fairly pro-publisher. But a partnership has to make sense and there is a lot of stuff from traditional publishing that doesn’t make sense.

Before Hugh got on the plane, we both knew that it was very unlikely that the meetings would result in an offer that we’d be willing to take.  Yet, WE DID IT ANYWAY. Why? And this might be kind of silly but both of us felt kind of strongly that having in-person conversations with publishers about our sticking points (ebook royalty rate, sales thresholds in out of print clauses, and non-compete clauses) was necessary in order to facilitate possible change in the future. In other words, we weren’t going to see the benefit of it but maybe a future indie publishing author would because we had started the conversation.

And these conversations could only occur via a reasonable author partnering with a reasonable agent who were meeting with affable and reasonable publishers and editors and having frank, smart, and intelligent conversations with them about current contractual sticking points.

For Hugh, it resulted in a very unexpected print-rights only offer five months later (much to our surprise). That was way sooner than either of us had ever thought to hope.

I imagine that in the not-so-distant-future other indie authors (and who might be unagented) might be thanking Hugh for having partnered with an agent (way) back in 2012 so as to have these meetings. Just as they might be thanking Bella Andre and her agent for pulling off one of the first print-rights only deals (that was publicly announced -there might be others I’m unaware of).

 

 

SFWA gives RH’s Hydra Imprint The Thumbs Down

by Kristin Nelson

If you’ve ever wondered about the efficacy of writer organizations such as RWA or SFWA when it comes to protecting authors, then the last twenty-four hour period has proven just how valuable they can be.

Last week on Facebook, I linked to an insightful blog article Victoria Strauss had posted on the SFWA-endorsed site Writer Beware about the new Random House Hydra imprint. Yesterday, the Science Fiction and Fantasy Writers of America (SFWA) issued this statement:

Dear SFWA Member:

SFWA has determined that works published by Random House’s electronic imprint Hydra can not be use as credentials for SFWA membership, and that Hydra is not an approved market. Hydra fails to pay authors an advance against royalties, as SFWA requires, and has contract terms that are onerous and unconscionable.

Hydra contracts also require authors to pay – through deductions from royalties due the authors – for the normal costs of doing business that should be borne by the publisher.

Hydra contracts are also for the life-of-copyright and include both primary and subsidiary rights. Such provisions are unacceptable.

At this time, Random House’s other imprints continue to be qualified markets.

Today, within twenty-four hours, Random House responded and asked for a sit-down with board members of SFWA.

I’d say that’s your membership dollars hard at work for a good cause. If you write in this genre and you qualify to be a member but for some reason aren’t one, maybe now is a good time to join. I only foresee more battles like this in the future.