Pub Rants

Category: publishers

Speaking of 25% Of Net Receipts

Status: Gotta hit the shower and the ground running. RWA, day 2.


What’s Playing on the XM or iPod right now? NEVER THERE by Cake

An update from blog entry 8-4-2011:

In good news, we’ve now gone through all our Random House statements from the spring with a fine tooth comb and I’m delighted to report that RH is not doing a wholesale change to their electronic book royalty rate on existing contracts; there was simply an error that was resolved promptly. Contracts that have the royalty rate of 25% of retail will still have 25% of retail. Now, I have heard that they want to change any 15% of retail to 25% of net (which is actually to an author’s advantage) but I have not personally seen that so as far as I’m concerned, that’s simply a rumor for now.


Since we’ve been speaking of 25% of net receipts and it would have been easy to miss, if you publish with Random House, you might want to take a look at your April statements again.


Random House decided they were arbitrarily just going to use the 25% of net receipts to calculate their authors’ eBook royalties in this last accounting round—regardless of what is stated in the contracts. There was no mention of it to agents or letter circulated to authors–that I know of anyway. I’m assuming some folks just weren’t going to notice?


Now for some authors, this may be an improvement over what they were getting, depends on what is in the contract. However, for probably the majority, Random House used to pay 25% of RETAIL price that would then drop to 15% of RETAIL price after the title earned out. (and yes I’m capitalizing the word “retail” for a reason).


We had so much fun yesterday doing math, I can’t resist doing more today.


Let’s say you have a mass market paperback priced at $7.99. (we might as well use the same type of figures as yesterday):


25% of RETAIL of 7.99 = 1.99 of royalty per sale to the author.


Oh how I loved Random House back in the day….


Now, if RH switches to 25% of net receipts and because they did, as a company, switch to the Agency Model in March 2011, the math would look like this:


7.99 – 2.39 (which is the 30% to the distributor such as Amazon) = 5.60 to the publisher

25% of net receipts of 5.60 = 1.40 of royalty per sale to the author


Yep, the author just lost 59 cents per sale. Add that up over X number of sales and that’s a lot of dough.


However, if an author’s title has already earned out and they are now at the 15% of RETAIL price, it’s actually a better royalty to switch to 25% of net receipts.


15% of 7.99 = 1.19


Since the author would get $1.40 calculating the other way, then it might be worth considering (but make sure RH is not doing any other deductions beyond what they are paying to the distributor).


This concludes your moment of math. We will now return to our regularly scheduled programming.


Going Public

Status: Most of today I felt like I still had BEA brain. And the Brenda Novak Auction is ending tonight!


What’s Playing on the XM or iPod right now? ROSEALIA by Better Than Ezra


Many weeks before several authors started making headlines about their choice to self-publish, my author Courtney Milan, with my blessing and support (not that she needed it!), had already made that decision. She walked away from an offer on the table from her publisher Harlequin. There were several reasons for this decision but it will come as no surprise that it mainly hinged on the electronic royalty rate that had been offered. It’s no industry secret that Harlequin is well below what has become the “industry standard.” And it’s also not a secret what I think about Publishers’ current industry standard of 25% of net.


What was secret is that Courtney didn’t announce it—until now. Today she launched this new publishing direction with a novella entitled UNLOCKED in her Turner Brothers series that began with Unveiled & Unclaimed which will release in September.


In four short days, I can already tell you two important things about this digital revolution.


1. Pricing is everything. Pricing a title appropriately will move a great number of books in a short period of time.


2. Publishers are under-reporting electronic book sales in any given period on the royalty statements we are seeing.

That’s a fact.

Tales From The Contract Wars

Status: It’s pouring rain and the temps feel anything like spring but I’m eating ice cream right now anyway.


What’s Playing on the XM or iPod right now? DON’T GIVE UP ON ME NOW by Ben Harper


Today we officially wrapped up our negotiations on the new Macmillan boilerplate contract. It only took 6 months, 2 weeks, and 3 days from start to finish. It was worth it to get a decent contract.


Oddly enough I was excited to sell yet another book to a Macmillan imprint. THAT contract will only take several weeks. All the heavy lifting is done.


Then I get a new Random House contract in. Basically the same except for 2 rather key clauses that come at the very end of the contract but are referenced throughout.


Great. Publishers will certainly let you reserve rights but are now inserting clauses that hamstring the author from exploiting those reserved rights.


This seems to be the latest fashion.


Who’s Got Problems? Dorchester Has Problems

STATUS: I’m listening to Chill on XM. This station is new to me. Do I feel calmer? Hum…

What’s playing on the XM or iPod right now? TAMELESS by Yonderboi

Sadly, Dorchester Publishing has been in the news again recently. I’m sure most of you have already seen the headlines as it certainly is not a secret that Brian Keene called for a boycott of the publisher because unauthorized editions of Keene’s digital editions were being sold after the rights had reverted to him.

I can confirm that the same has happened to several NLA authors whose rights had also reverted.

In response, Dorchester vows to make it right.

Last Thursday, I was on a conference call that detailed Dorchester’s current financial situation where I also brought up this issue.

Currently they are paying royalties owed to what they call “currently active Dorchester authors” (ie. authors whose rights Dorchester currently has under contract and can exploit). I also received confirmation that those payments are happening on a weekly basis.

However, Dorchester owes a tidy sum of back royalties to what are called “non-current inactive authors” (ie. authors whose rights have reverted) and as of Thursday’s call, there is no plan in place to pay these past royalties owed.

I imagine that this is partly what CEO Bob Anthony is referring to when he mentions that they’ve needed to prioritize cash flow and in the end, one can hope that Anthony’s vow that “all authors will be paid in full” will come to pass.

Given past actions by the company, Mr. Keene and other authors remain skeptical.

And I’m Still Talking About Derivative Works

STATUS: My goal today is to work through ALL emails in my inbox. I probably have 8 hours of work ahead of me just on that. It’s very sad when I get a little behind on it.

What’s playing on the XM or iPod right now? WHO’S CRYING NOW by Randy Crawford

I do find it funny that when I talk about contracts, I get the fewest number of comments to the entry. Now I understand that folks may still be reading the blog entry even if they aren’t commenting but I do equate number of comments with general interest in the topic.

But I’ve got one more entry on derivative works before I lay this topic to rest (for a little while anyway). And that’s to talk about fiction. For me, I rarely do nonfiction so I wasn’t as worried about the ramifications of this clause in regards to that. It’s also more conceivable to figure what could be considered a derivative work in the NF realm.

I do fiction. So I’m particularly interested in what might be considered a derivative work in this realm. I had a sneaky suspicion that I already knew.

And I was right.

For fiction, it could be conceivably argued that a comic book or graphic novel is a derivative work based off of the original novel.

Not that I agree even remotely. But it could be argued and that’s exactly what I did not want to hear.

Because to make it clear whether it would or would not be considered a derivative work, my guess is that would have to be challenged and determined in a court of law.

Once again, let me add my disclaimer that I’m not a copyright attorney, and I’m not dispensing legal advice or legal opinions here. These are simply my musings on how this clause could be interpreted.

Let’s Continue Talking About Derivative Works

STATUS: Two years and two months after initial publication, HOTEL ON THE CORNER OF BITTER AND SWEET cracks the top 10 again on the NYT list. Time to celebrate.

What’s playing on the XM or iPod right now? YOU NEEDED ME by Anne Murray

I can tell by the overwhelming number of comments on my last post that discussing copyright is definitely whipping my blog readers into a verbal frenzy.

How many of you used the copyright act as a sleep aid on Monday?

But I do think it’s worth continuing the discussion. As I mentioned Monday, I could see how derivative works could be created for nonfiction work.

For example, and this is just off the top of my head and probably not the best example out there but I think it will give you a sense, is to think of a nonfiction work on decorating for the holidays. In this work, let’s say there is one chapter on table place settings. The publisher than decides to take one aspect of holiday place settings from this chapter and create a whole new gift book on holiday place settings.

That would be a derivative work, created by the publisher and they would own the copyright (at least according to this clause 6.b. in the Macmillan contract.)

In talking to my lawyer, we discussed at length how a derivative work could be a book trailer. Definition of derivative work is based on one or more pre-existing works, such as translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgement, condensation, or any other form in which a work may be recast, transformed, or adapted.

In talking with Macmillan, this is an example they gave as something they could create that would be covered under this clause 6.b.

More on fiction tomorrow. Hopefully I won’t run out of time.

So Let’s Talk Derivative Works

Status: These dang computers. I want to bang my head on my desk.

What’s Playing on the XM or iPod right now? MARRY ME by Train

About two weeks ago I mentioned that the most problematic issue in the new Macmillan boilerplate was the new clause 6. b. that granted the publisher the right to the copyright in any derivative work created by the publisher.

Just for the record, I’m not a copyright attorney and I don’t pretend to be one on TV or if I stay at a Holiday Inn Express. In other words, I’m not dispensing legal advice here; I’m simply sharing with you my general musings regarding the clause.

Since I don’t have the expertise, I sent it to my IP attorney. Now he’s not a copyright attorney either but his law firm certainly has an expert in-house so we looped him on the conversation as well.

A virtual copyright party at NLA!

His biggest concern was the broadness of the clause and how derivative works is not clearly defined. If you’d like some light reading before you go to bed tonight, feel free to click here. This will link you to the copyright act in all its glory. You’ll want to click on Chapter 1 and peruse sections 102 and 103 that particularly discuss derivative works.

He also let me know that there are currently lawsuits in process that examine the scope of derivative works and what can or can’t be defined as such. Fun.

So two thoughts:
1. It’s obviously better to remove the clause and any reference to derivative works from the contract. And, if you have leverage, it can be done. But if you don’t…

2. How best to restrict this clause in such a way to make pursuit of derivative works impossible without expressed approval of the author?

Now we’re talking. My lawyer gave me some good insights and if you want to pay my lawyer fees, then I could share them on the blog. *grin*

This is why you have agents by the way.

My other big question was this: I get how a derivative work could be done fairly easily with a nonfiction project, but I wasn’t certain how it would apply to fiction. Now I am.

More on that tomorrow. Stay tuned.

More Train music on iLike

The Great Contract Delay?

Status: Freakish. It’s going to be 60 degrees tomorrow in Denver. Uh, winter, what is that?

What’s Playing on the XM or iPod right now? ALWAYS ON MY MIND by Willie Nelson

In the last 6 months, there has been a radical shift in the amount of time it will take to complete a publishing contract. At first, I chalked it up to the new contract boilerplates publishing houses are feeling the need to implement. Any time an agent has to pretty much negotiate from scratch, it’s going to take a lot more time to establish a new agency boilerplate that is fair and reasonable for the author.

But that’s not always the case. For example, for one recent deal, it took (literally) three months to get the first draft of the contract—and the publisher had not changed the boilerplate. Having recently done 4 or 5 contracts with this house, I rather assumed this latest one was going to be a quick process. It took 6 months before the author signed the final contract.

And it’s not like I’m snoozing at my desk. This is after repeated calls, emails, follow up, and constant nagging on my part to prod the process along.

Agent job description: Nag.

Trust me, I didn’t know that was part of the job qualifications when I got into this biz.

For another contract from a publishing house that has always been very prompt in the past, I was stunned to have to wait 4 weeks between responses. (By the way, I responded within 3 days from any communication from the publisher; it was not languishing on my desk.)

It’s enough to make you wonder if it’s me! So I started bringing it up in conversations with other agents I chat with. Lo and behold, they had the same complaint!

So I don’t know what’s up. Are the contracts departments besieged? Understaffed? Combination of of things? Is this the great contract delay conspiracy? If you’ve recently sold a novel, get ready to hurry up and wait in order to sign on the dotted line.

Could Be Interesting For Discussion

STATUS: TGIF!

What’s playing on the XM or iPod right now? TURN YOUR LOVE by Jack Johnson

If you are a regular blog reader, you’ll know that I’ve mentioned JA Konrath’s on-his-own foray into e-publishing and the success he has had. Links here and here for that. The world of publishing is shifting almost daily.

Today Writer Beware talks about a series of recent articles in the news about self-pubbing and the importance of context. Konrath and Strauss both add nice analysis to the on-going dialogue so wanted to share the link.

2011 is going to be one interesting year I think!

How Well Did Kristin Predict?

STATUS: I’m heading over to the Tattered Cover to do some holiday shopping. Yay!

What’s playing on the XM or iPod right now? CHRISTMAS CANON ROCK Trans-Siberian Orchestra

Oh, I think this might be a fun entry. In a press release from Scholastic, the editors created a list of the top trends from 2010 when it came to Children’s books.

And funny enough, in the Nelson Agency newsletter, I’ve been highlighting a lot of what was “hot” in children’s lit throughout the year. I wonder if my predictions in any way line up.

What do you say? Should we analyze it?

To start, here’s the Scholastic List:

1. The expanding Young Adult audience
2. The year of dystopian fiction
3. Mythology-based fantasy (Percy Jackson followed by series like The Kane Chronicles, Lost Heroes of Olympus and Goddess Girls)
4. Multimedia series (The 39 Clues, Skeleton Creek, The Search for WondLa)
5. A focus on popular characters – from all media
6. The shift to 25 to 30 percent fewer new picture books, with characters like Pinkalicious, Splat Cat and Brown Bear, Brown Bear showing up in Beginning Reader books
7. The return to humor
8. The rise of the diary and journal format (The Diary of a Wimpy Kid, Dear Dumb Diary, Dork Diaries, The Popularity Papers, and Big Nate)
9. Special-needs protagonists
10. Paranormal romance beyond vampires (Linger and Linger, Beautiful Creatures, Immortal, and Prophesy of the Sisters)

In looking at all the newsletters from the past 11 months, here’s what I highlighted was “hot” in our newsletter column:

1. February 2010 newsletter—Dystopian YA fiction as hot.
2. March 2010 newsletter—Paranormal YA US titles hot in translation
3. May 2010 newsletter—I mentioned that I’d be attending the BEA YA buzz panel. I didn’t highlight paranormal romance in the newsletter but I did discuss it on the blog, June 2, 2010 entry.
4. October 2010 newsletter—Dystopian YA mentioned again along with YA SF romance.

Not bad! I actually didn’t talk about children’s fantasy at all but I definitely agree that we have seen a lot of myth-based fantasy stories and just recently I blogged about seeing fairy tale inspired stories—which is kind of in that same vein.

A return to humor is news to me so very interesting. As for special-needs protagonists, I can’t say I’ve seen that many but what I have noticed is stories where the main narrator has a sibling with special needs. Tangential but maybe worth mentioning.

In the October newsletter, I also highlighted that editors would like to see the next John Green. That’s humor and the male voice. That’s not mentioned here but I do think that might trend.