Pub Rants

Category: publishers

Authors, Do You Know Where Your Money Is?

(Just a note, this post is from our archives. Some references and links may be from past years.)

Every six months, you get an envelope from your agent. You tear it open, take out the enclosed check and royalty statement, and glance at the numbers on both. You shrug and mutter, “Guess that looks about right.” Then you toss the statement on your to-be-filed pile at the back of your closet, endorse the check, and head to the bank.

Sound familiar?

I can’t even begin to tell you how many published authors I’ve talked to at conferences who don’t give their royalty statements much of a glance. Why? Because they don’t know what they’re looking at. “Dammit, Jim, I’m a writer, not an accountant,” they say (or something along those lines). “Besides, isn’t that what I pay my agent to manage for me?”

News flash! Like you, many agents consider themselves word people—not numbers people—and your royalty statements are just as baffling to them as they are to you.

This means that the buck, quite literally, stops with you. Have a conversation with your agent about the level of support he or she is providing when it comes to combing through your statements and making sure you’re getting paid everything you’re owed.

More importantly, educate yourself. Learn how to audit your own statements.

Every year, we at Nelson Literary Agency recover thousands—sometimes tens of thousands—of unpaid dollars on behalf of our clients, simply because we audit their royalty statements.

Does this mean that publishers are nefarious, knowingly cheating authors out of a few bucks here and there to improve their own bottom lines? In our experience, no. (In fact, not all errors we find are made in the publisher’s favor!) Every error we’ve called to a publisher’s attention has immediately resulted in the issuing of a corrected statement and, when called for, a check covering the difference.

Without naming names, here are some examples of errors we’ve recently found on our clients’ royalty statements:

1. Unpaid royalties of approximately $5,000 because the publisher had applied a $10,000 advance against the author’s earnings when the actual contracted and paid advance had been only $5,000. This means the author had actually earned out—though the statement said otherwise—and was now owed nearly $5,000 in earned royalties.

2. Unpaid royalties of approximately $4,200 because the publisher’s accounting department missed the fact the author’s contract contained a royalties escalator. What’s that? A royalties escalator increases the author’s royalty rate in steps, based on units sold. For instance, a contract might specify that the author will earn 10% for the first 5,000 copies sold, 12.5% for the next 5,000 copies sold, and 15% for all copies sold thereafter. In this case, the author had sold about 12,500 copies of a hardcover edition priced at $16.99, but she had earned only 10% for all of those copies. Not one, but two escalators had been missed.

3. Unpaid royalties of approximately $7,300 because the publisher sold nearly 6,500 copies of a $17.99 hardcover edition at “high discount,” even though Agent Kristin had ensured that the author’s contract limited the number of copies the publisher was allowed to sell at high discount. What does that mean? When publishers sell copies of your book at higher-than-usual discounts, it’s common that the author’s contract will specify that she will earn “one-half the prevailing royalty rate” on those copies. Because Agent Kristin had limited the publisher’s high-discount sales, this author should have earned 12.5% on those particular 6,500 copies, but she earned only 6.25%, and we were able to recover the difference. (By the way, does your agent understand this and negotiate your contract’s high-discount clause in your favor?)

Dear Authors, the only way to protect your assets is to do the math. Join me July 30, from 6:00 pm to 8:30 pm, for my Royalty Statements Auditing Workshop, a live webinar sponsored by Nelson Literary Agency. Hope to see you then!

Is HarperCollins Pitting Authors Against Booksellers?

Just this week, HarperCollins announced that they would give authors a royalty incentive (35% of net instead of 25% of net) on any sales of an individual author’s book(s) that are sold via an affiliate link to HarperCollins’ new consumer-facing branded book retail site.

In other words, if the author is directly responsible for the sale, they get a higher royalty percentage. (Note: this only holds true for sales of books by the author. Authors can’t provide HarperCollins links to other author books and get an affiliate commission on the sale.)

To sum up, authors are rewarded if the sale is made directly through their publisher.

So does that pit authors against booksellers?

In my mind, the answer is no. Here’s why. HarperCollins is not mandating that their authors provide and feature ONLY links to the HarperCollins’ branded retail site.

HC is simply asking that the link be included along with all the other retail links to Amazon, Barnes & Noble, Kobo, Google, Indiebound (the consortium of independent booksellers), etc.

If HarperCollins mandated that authors could only use their links on websites, newsletters, and email blasts, that could create a problem.

But it does raise another interesting thought. If Publishers have online storefronts? Are they in direct competition with booksellers? After all, they are now selling direct-to-consumers.

(By the way, Publishers have always had the ability to sell directly to readers via mail order, phone sales, catalog, and special sales, but it hasn’t been a big revenue avenue in the past, except for some specific titles.)

That answer is probably yes, if a publisher’s retail store starts building real market share.

S&S finalizes agreement with Amazon

This went out on the wire late last night. Carolyn Reidy has finalized S&S’s agreement with Amazon. Yes, the same agreement Hachette has been at loggerheads with Amazon for months now. So what is S&S okay with that Hachette isn’t? That’s a very good question….

S&S - Amazon Agreement

 

 

I know for a fact that some of my clients don’t actually read the final contract they sign. I also freely admit that this makes me nervous. No person should ever be so trusting, even though I know I do a heck of a job on every contract negotiation. I actually prefer that all my clients read their 25+ page contract from first page to last. In fact, I even welcome questions or any concerns a particular clause might raise.

Why? Because I’ve looked at that publisher’s contract a million times, and my familiarity with it might actually be a liability rather than an asset. It never hurts to have a fresh pair of eyes on a contract I’ve read three times before I send on to the client for signing.

Fresh eyes might be a fresh perspective, and a client’s questions based on his or her interpretation of the contract language might actually make me evaluate familiar clauses in a whole new way.

Not to mention, Publishers Weekly just ran a story called For Major Publishers, Will Print No Longer Be the Norm? In it, PW highlights that agents are concerned about publishers who no longer guarantee a publication format in their contracts. In short, publishers are becoming more hesitant to commit to printing a physical edition of your book–just in case they want to do eBook first or eBook only.

Well, a big reason a lot of writers are interested in partnering with publishers is because publishers offer the advantage of producing both print and electronic formats. And if a print edition is not guaranteed…well, that might change the author’s desire to sign a contract.

Luckily, we here at NLA have made it a standard to specify the production of a print edition in our authors’ contracts. It’s always a tough discussion, but we are sure to get publishers to guarantee that they will produce a print edition in the deal-points stage, before contracts are even drawn up. That way, the expectation is clear early on so the author can decide whether or not to accept the publisher’s offer. This has been our standard for years now, but I’m guessing that getting publishers to agree to it is only going to get tougher.

Thinking like an agent ensures that you read your entire contract. Word for word. And that you start thinking like a negotiator. What have you read about in the news lately that might need to be covered in a publishing contract? Maybe you’ve read about “subscription services,” which is quickly becoming a hot-button issue. If you see that, or anything else, in your contract that you don’t understand, have a conversation with your agent. It’s probably rare you’ll think of something that your agent hasn’t, but, honestly, you never know.

Fresh eyes can be a powerful tool.

One of the reasons why I wanted Hachette to be forthcoming when I started asking about the shipping issues (many moons before the news became public) was because I had already guessed that Amazon was flexing some muscle in a contract negotiation.

So confirming it wasn’t telling me anything I didn’t probably already know…

But also so I could tell Hachette and the editors that my authors and I were firmly on their side and hugely supportive of what they were having to face.

Amazon – I have been very appreciative of the many changes you’ve already created in publishing but now you are just being a big old fat hypocrite.

Because your motto is customer first, always.

Well, this kind of hardball in no way serves your customers. It hurts authors (whom you claim to support) and you deserve the public fall-out that this spat creates.

This just hit the newswire in the last week but I’ve informally known about this since late fall 2013 (as early as November). The problem? My Hachette authors and I noticed this “shipping issue” multiple times and brought it to our Hachette Editors’ attention. 

Multiple times. Repeated emails. We were assured that all was fine. (Which we, of course, did not believe since it kept happening….)

This is yet another moment where big publishing could have chosen to partner with authors and agents by explaining the truth behind Amazon’s muscle flexing.

Instead, Hachette choose to go with “we don’t discuss contract negotiations” tactic, which leaves their authors in the dark, agents like me fuming, and fosters a general atmosphere of distrust that the publisher is not being forthright.

Not the end goal here! What we need is more communication, not less.

Let agents and authors help you take a stand–which is actually what’s going on now and is detailed in this New York Times Article.

As happens time and time again, the truth does emerge and leaves those of us who have been asking about it for the last six months with exasperated hands in air, the desire to bang head against desk, and authors who now won’t believe the publisher when the response is “all is fine” in the future.

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.

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).

 

 

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.