Pub Rants

Tagged Random House

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.

 

 

 

 

Because The First Thing That Comes To Mind Is The Size Of The Advance – Not.

by Kristin Nelson

STATUS: With New York Publishing shut down, I’m working on a UK contract and catching up on email. I think it’s going to be this way for most of the week.

What’s playing on the XM or iPod right now?  HOPE I DON’T FALL IN LOVE WITH YOU by Tom Waits

Obviously the Random House – Penguin merger is all the news in the publishing world right now. It’s a big deal. But I read this article in Publishers Weekly and pretty much snorted my tea.

PW makes it sound like an agent’s biggest concern might be the reduction in advance amounts paid for books.

I’m concerned about MANY things that might come about because of the merger but smaller advances is not one of them. It’s not even on my top 10 list of things to be concerned about.

Publishing saw the consolidation of publishing houses into smaller and smaller numbers in the early 90s. That evolved into what had been known as the “Big 6” of the last decade.

It’s now down to the “Big 5” and quite honestly, I don’t see NewsCorp (which owns HarperCollins) settling for the status quo. Wouldn’t surprise me at all to see the “Big 5” become “4” with two more houses merging in the not-so-distant-future.

Of course this all has to pass anti-trust rulings, etc.

What does fewer publishing houses mean for authors?

That answer is pretty simple. Fewer choices. Less competition. More uniformity of royalty rates (like that hasn’t happened already because houses are already more interested in status quo among themselves rather than actual competition). Narrowed vision of what is the market and what should sell (and they already have tunnel vision as any number of digitally self-published successes have recently proven). More emphasis on commercial blockbusters and less building authors from the mid list.

Getting the picture? Smaller advances? Not a main issue on my radar.

Random House Gets A Clean Bill Of Health

by Kristin Nelson

STATUS: Leaving the office at 5 p.m. That never happens!

What’s playing on the XM or iPod right now? YOU AND I by Wilco

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 per my previous blog entry) but I have not personally seen that so as far as I’m concerned, that’s simply a rumor for now.

As RH royalty statements are my fav in the biz and because they always resolve issues quickly, I’m back to happy.

Speaking of 25% Of Net Receipts

by Kristin Nelson

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.


Tales From The Contract Wars

by Kristin Nelson

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.


Wake Up Call

by Kristin Nelson

STATUS: Getting this day off to a good start.

What’s playing on the XM or iPod right now? BLUE MOON by Elvis Presley

While at RWA in Orlando, I sat on a PRO panel for published authors with Steve Axelrod and Karen Solem. One of the questions asked of the panel was what we thought about Andrew Wylie’s announcement of doing eBooks through his own publishing arm called Odyssey and the Mexican stand-off that subsequently ensued with Random House over it.

For the record, I don’t know Mr. Wylie personally and any viewpoint expressed here is simply my opinion.

My answer at the panel was that I thought it was a strategic wake-up call on his part. He was firing a shot across the bow so to speak to send a very clear message that for well-established legacy authors still in print (for books sold long before eBooks were even conceived), he wasn’t going to 1) settle for the industry’s current low watermark royalty of 25% of net for the electronic versions of those legacy titles and 2) That unless explicitly granted in the contract, the rights belonged to the authors to exercise them as they deemed fit.

This, of course, was in direct opposition to Random House’s viewpoint that they had de facto electronic rights for titles still in print with them. (Hence the stand-off with RH proclaiming that they would no longer do business with Wylie agency.)

Well, I personally didn’t think that this tiff would last too long. The Wylie agency has been around for 25+ years and has too many distinguished authors on its list for RH to ignore forever. They were going to have to come to an agreement and sure enough, that was announced late yesterday.

What does it mean?

It means that who controls electronic rights for titles negotiated pre-computer/electronic age is still in question. That publishers, authors, and agents have very different viewpoints regarding it. Disagreements will happen (and some will play out in court). Further discussions and agreements are possible. But in my mind, only when push comes to shove.

Authors Guild on RH’s Rights Grab, Q&A continued

by Kristin Nelson

STATUS: It’s obvious that I need to rule the world. I couldn’t BELIEVE that the judges dismissed FACE from the Sing-Off. Are they nuts? Not to disparage the other performers but FACE is doing something different with a cappella. Surely an audience might like to see more of what they can do. Now it’s just the same old same old for the remaining groups with the exception of Nota (who were outstanding). Go and buy FACE’s new album Momentum anyway. Take that Sing-off.

What’s playing on the iPod right now? COLORADO CHRISTMAS by Nitty Gritty Dirt Band

I’m getting an early start to my blog or I’m just going to get buried. I was very happy to see the Author Guild speak out. In a message to members, they basically rejected RH’s argument that its older contracts that grant rights to publish “in book form” or “in all editions” is a grant of electronic rights.

RH politely disagreed with their stance. Surprise I know. Put on your boxing gloves. Here we go.

But back to Q&A.

Anonymous asked:
Ask them – are mid-list authors dead in the water? What do you expect from mid-list to say yes to future projects?
I don’t believe that midlist authors are dead in the water but it also depends on where they are in the midlist. There are different levels—the consistently-selling midlister versus the midlister who is now having declining sales for each subsequent project.

If the author is a solid seller, publishers are still buying new projects—however, they may be offering less money than they have in the past or they are sticking with the same terms as previous contract. There’s not a lot of negotiating leverage for the midlist author.

In order to say yes to a future project from a midlist author (looking to change representation), I would have to believe that the new project or proposal is strong enough to bump the sales numbers or will take the author in a new, stronger direction from which the author can build.

Anonymous asked:
I was wondering if you have ever fallen in love with a manuscript and then never found a home for it?
Sadly yes. It always amazes me when I’m not able to sell a project. There’s obviously something wrong with the editors. Grin.

Rebecca Knight asked:
Hmmmm. My question for an editor would have to be what direction they think e-book pricing and the royalty structure is going to go in the next few years.
Actually, individual editors have no idea. All changes to eBook pricing and royalty structures are set by corporate policy. In fact, in negotiations, they have to toe the party line.

From my perspective? I think eBook pricing and royalty structure is going to be a huge battle. Publishers are seeing squeezed profit margins and they are clearly on notice about how third parties such as Amazon are controlling the perception of what pricing should be for eBooks (with their $9.99 price point or lower).

On Mike Shatzkin’s blog, he speculated that the publishers’ decision to delay the e-book versions of some major upcoming titles isn’t “a battle to rescue hardcover books from price perception issues caused by inexpensive ebooks” so much as it is about “wresting control of their ebook destinies back from Amazon.” I don’t disagree. His insights are worth reading.

Because of fear, publishers are all jumping on board the 25% of net bandwagon because they have no clear idea of price points and discounts that would be needed to stay with a 15% or 25% of retail model.

Who loses out the most right now? Authors. Unless they contract directly with eBook providers such as Amazon or Rosetta Books (see the stories on Stephen Covey’s deal with Rosetta and the Pat Conroy deal with Open Road). However, that’s probably only profitable (right now) for clearly established authors who have a backlist and control of those eRights. A debut author is not going to be in the same position and if that debut wants a traditional print publisher on board as well, then they will have to acquiesce to the electronic royalty structure being offered.

Agents aren’t stupid. We know that this 25% of net crap is not good now and it’s not going to be good 5 to 10 years from now and we might be stuck. (Just as the 7.5% trade pb royalty rate hasn’t change in 20 years although the publishing model for trade books has shifted significantly). If we have leverage, auction situation, we get more. When that’s not available, what is the likelihood of that debut author or midlister walking away from a traditional book deal over eRoyalties when the current percentage of sales done electronically is not even 1% of the total book sales overall? And yes, I know this is going to change drastically over the next 5 years but the agreements being done right now are creating the “standard.” However much we disagree with them and warn authors that it’s not to their advantage.

May you live in interesting times. Rather sounds like a curse right now.

RH Gets Brazen!

by Kristin Nelson

STATUS: We are in the final days. Ack. Such a list of things to accomplish!

What’s playing on the iPod right now? SANTA CLAUS IS COMING TO TOWN by Dave Brubeck
We interrupt this Q&A to give you an announcement.

And here I thought Simon & Schuster was brazen in the summer of 2008 when they tried to drop off the crucial 4 lines of their Out of Print clause. Random House has that beat hands down with their recent pronouncement that by default, electronic rights belong to them via their definition of what is a “book” for any backlist title still in print.

From the letter they sent to agents:
“The vast majority of our backlist contracts,” writes Dohle, “grant us the exclusive right to publish books in electronic formats. At the same time, we are aware there have been some misunderstandings concerning ebook rights in older backlist titles. Our older older agreements often give the exclusive rights to publish ‘in book form’ or ‘in any and all editions’. Many of those contracts also include enhanced language that references other forms of copying or displaying the text that might be developed in the future or other more relevant language that more specifically reflects the already expansive scope of rights. Such grants are usually not limited to any specific format, and indeed the “form” of a book has evolved over the years to include variations of hardcover, paperback and other written word formats, all of which have understood to be included in the grant of book publishing rights. Indeed, ebook retailers market, sell and merchandise ebooks as an alternate book format, alongside the hardcover, trade paperback and mass market versions of a given title. Whether physical or digital, the product is used and experienced in the same manner, serves the same function, and satisfies the same fundamental urge to discovery stories, ideas and information through the process of reading. Accordingly, Random House considers contracts that grant the exclusive right to publish ‘in book form’ or ‘in any and all editions’ to include the exclusive right to publish in electronic book publishing formats. Our agreements also contain broad non-competition provisions, so that the author is precluded from granting publishing rights to third parties that would compromise the rights for which Random House has bargained.”

Oh really now. I have a feeling that many agencies and the Authors Guild are going to disagree with this interpretation.

My agency hasn’t been around long enough to have to confront this (as digital rights were already addressed in any RH contracts I’ve done in the last 7 years) but that’s not the case for many agents I know who have been doing this 20+ years.

And speaking of an agent who has been doing this for a long time, Richard Curtis gives some insight on this RH rights grab via his blog E-Reads.