Second-Class Contracts? Deal Terms at Random House’s Hydra Imprint
From Writer Beware:
Over the past few years, more and more trade publishers have created digital-only imprints. Another new one just popped up in my newsfeed today: Little, Brown UK’s Blackfriars will be launching its first list this coming June.
Last November, there was some excitement over three brand new digital imprints from Random House: Hydra for SF/fantasy, Alibi for mysteries and thrillers, and Flirt for the is-it-or-isn’t-it category of New Adult. I was interested by the fact that these new lines were pitched in language reminiscent of self-publishing services.
. . . .
I can’t help feeling that, with digital-only or digital-mostly imprints, print-based publishers are offering a kind of second-class publication. Ebooks are still experiencing triple-digit growth, but they’re only one of several formats, and publishing in a single format limits your audience. For volume sales, print is still important, and a lot of book discovery still happens in bookstores. There’s also the fragility of digital content, where formats are regularly and rapidly rendered obsolete by the advance of technology.
It seems to me that digital imprints require authors to embrace the limitations of digital publishing, without providing any of the offsetting advantages that are available to digital self-publishers–namely, control over format and pricing, and the freedom of not being tied to a restrictive contract. Meanwhile, the publisher can push books into a growing marketplace at a much lower cost than with a conventional imprint, and reap the profits.
. . . .
On the other hand…what if digital imprints are offering second-class contracts?
I recently saw the deal terms for Random House’s Hydra imprint. A summary:
- It’s a life-of-copyright contract that includes both primary and subsidiary rights.
- There’s no advance. Net proceeds (defined as net income plus subrights income less the deductions detailed below) are split 50/50 between author and publisher.
- Deductions for ebook edition: “one-time out of pocket title set up costs” (editing, cover art, design, etc.), plus a “sales, marketing, and publicity fee” of 10% of net sales revenue.
- Deductions for print edition, if there is one: “actual direct out-of-pocket paper, printing and binding costs,” plus 6% of gross sales revenue to cover freight and warehousing costs.
. . . .
However, the costs are deducted from sales and licensing income, and reduce the amount of the author-publisher split. This is reminiscent of what’s known as Hollywood accounting, where net proceeds are made to disappear by charging expenses against profit.
Link to the rest at Writer Beware and thanks to Laura for the tip.
Passive Guy has also been reliably informed that SWFA sent the following email to its members:
“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.”
Publishers place a very high value on their brand names. Random House charges its Hydra authors a great deal for the value of its name and not much else. These brand names do have some value – with bookstores and professional book reviewers. (Bookstores and professional book reviewers know exactly what Hydra is, so there’s no value for authors in that association, however.)
Publisher brand names have almost zero value with consumers, the people who actually buy books to read. Most readers think of publishers like they do utility companies. If you want electricity, there’s an electric company somewhere in the supply path. If the electric company changes, who notices?
You don’t believe PG? Ask any reader who his/her favorite author is. You’ll receive a quick answer, perhaps two or three. Then ask the reader who that author’s publisher is. At least nine times out of ten, silence will follow.
Because the publisher is like the electric company for readers.
Serious readers have favorite bookstores, but they don’t have favorite publishers. The only real exception PG can think of is Harlequin, with a particular subset of readers.
PG will also note that some authors have complained loudly about the life-of-the-copyright term of the Hydra contracts. For those not familiar with the meaning of this type of provision, the life of a copyright in the United States is the life of the author plus 70 years. The copyright law of other western nations is similar.
Essentially, this means that the publisher will control all rights to the book that the author grants to it (and those are virtually all rights that exist) for the rest of the author’s life. PG has many years of experience working with contracts of all types in a wide range of businesses and nobody else requires contract terms of this duration. Publishing contracts signed today can easily last more than a hundred years.
PG agrees this is unfair. However, this is a standard term of all Random House and other Big Publishing contracts PG has seen, not just Hydra. PG believes this provision is equally objectionable wherever it is found and, no, a $15,000 advance does not make it fair in PG’s excruciatingly humble opinion.
, Amazon will pay Passive Guy a small affiliate commission on any of your purchases.
Ironically, readers think of publishers the same thing that publishers think of writers.
John Scalzi’s rant about these contracts is worth a read.
http://whatever.scalzi.com/2013/03/06/a-contract-from-alibi/
Good rant. I especially liked this:
“It’s a big enough rights grab that I’m actually surprised that the language stops with “the world.” I guess there’s a lawyer at Random House who realized that “throughout the universe” might just be tipping the hand a bit”.
I’m actually surprised that’s not already in there. We’ll have people living in space on a permanent basis long before current copyrights expire.
People joke but going beyond rights on earth to include the solar system, galaxy, and universe is not uncommon in film contracts. There is also usually a reference to technologies ‘yet to be invented.’
You see that in publishing too. When ebooks first took off, and publishers were trying to grab electronic rights they didn’t actually own, they tried to use this clause to establish ownership.
The software licenses I write specify that the territory to which they apply is “The Universe” if they are not limited to specific countries or geographical areas. Also, if they are not time-limited the term is defined as “Perpetual or until a Terminating Event occurs.”
All of my licensing contracts specify that the software may be distributed through any means currently known or later invented.
My fave is: THIS IS A HORRIBLE AWFUL TERRIBLE APPALLING DISGUSTING CONTRACT WHICH IS BAD AND NO WRITER SHOULD SIGN IT EVER.
Excruciatingly humble? Love it.
I need a stamp for my blog posts. A rubber stamp that says:
“Big Six Publishers are snakes, cheats and thieves. They are slimey, manipulative and greedy.”
Why would anyone ever do business with these people?
Just don’t do it. They do not deserve our creative work.
Signing with a Publisher is like looking at someone else’s abusive spouse and thinking, “oh, but when he/she gets a divorce and marries me, they’ll be nice to ME.”
No they won’t. They’ll use you, steal your money and tell you that it’s your fault, because you deserve it.
Don’t do business with these people.
I wonder at what point these publishers will become embarrassed by the negative publicity? I know they’d never admit shame publicly, but at what point will they tuck these new scams under the rock they pulled them out from under and say “Move along, folks–nothing to see here.”
Oh, I forgot. They won’t. New and desperate writers will rush to them despite our best efforts. Publishers won’t stop scamming writers until they run out of a) suckers or b) money.
I don’t think they’ll ever be embarrassed at all. The reading public at large has no idea of what goes on in the industry. When I tell my non-writing friends about these sorts of things they look at me blankly. They’ve never heard a thing about it.
But we need to keep talking about it so writers everywhere will hear about it and learn to do business differently.
“But we need to keep talking about it so writers everywhere will hear about it and learn to do business differently.”
Yes, but remember it’s a HYDRA. Cut one crooked, unconscionable, writer-scamming, head off and two more will replace it.
I can’t be the only one that thought of that when I heard the name.
Hydra, Archway and whatever the hell the other half dozen different “imprints” all under Author Solutions that S&S acquired, is someone seriously getting paid to come up with different names and logos for the same scam service ran by the same scumbag publishers?
It’s funny. I figured once someone with a clue at Penguin realized exactly how Author Solution’s business made money, that would be the end of them. Even people in business have a clear minimal ethical standard they’ll try not to fall below, right? You just need to do your homework & understand the contracts you sign. Otherwise, what is the difference is there between a business & criminal groups like the Mafia & the Columbian drug cartels?
Silly me. Of course the big 6 publishers want to embrace the business model of a vanity press: it has a guaranteed revenue stream. If the is a best seller, the 50% royalties can always be reduced to a more reasonable level with some Hollywood Accounting; if book fails, the financial loss is far less than with a conventional publication.
I’ll admit I don’t like Amazon — mostly because I’m suspicious of all big corporations — but they definitely have a a clear minimal ethical standard. I can do business with them & not worry I didn’t look at every way they might practice sharp dealing to my loss. (So spoke the lamb going to his first shearing.)
Yeah, it’s not worth Amazon’s time to do that stuff. (On the other hand, if you complain at them too much, rumor* hath it that they will threaten to cut you off, and keep the last two months’ of whatever you earned with them, which is… Meh.)
If Amazon (or any other e-seller) wanted to skim, they’d just quietly not report X% of sales (in authors who make over Y% sales in a month), automatically, via creative programming. Much easier than hiring a creative accountant who’d have to fiddle with each individual author’s payments.
(* And by rumor, I mean I won’t name my sources, who are not me, because it might endanger their accounts, so you have to treat it as hearsay and decide whether my mistrust of Amazon would lead me to make **** up or not. C’est la vie.
)
I figured once someone with a clue at Penguin realized exactly how Author Solution’s business made money, that would be the end of them.
Someone with a clue knew at Penguin knew from the beginning exactly how Author Solutions made money. THAT’S WHY THEY TOOK THEM OVER. From Penguin‘s point of view, shamelessly ripping off writers is not a bug, it’s a feature — and they wanted to improve their rip-off skills by learning from (and devouring) the all-time master.
I figured that the publishing industry was more ethical than the Wall Street bankers. After all, the publishing industry has never had been subjected to extensive law-making & government regulation.
To repeat, silly me.
You know, every single time that I think Traditional Publishing cannot possibly sink any lower than they already have, something like this happens to prove me wrong.
How anyone could ever want to do business with this sort of slime is completely and totally beyond me. At this point, should you choose to sign a contract like this, you deserve everything you get.
This is just so vile and reprehensible.