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.