From author Ann Voss Peterson via Joe Konrath’s blog:
In this world, there are a lot of things I can’t afford to do. A trip around the world, for instance, although it would be amazing. Remodeling my kitchen. And until recently, sadly, braces for my son.
There’s one more thing that I find valuable and enjoyable that I can no longer afford to do, and that is write for Harlequin.
I published my first novel with Harlequin’s Intrigue line in August of 2000. My twenty-fifth was released in November, 2011. I had a lot of fun writing those books–taut, page-turning, action-packed romantic suspense staring a myriad of different heroes and heroines and a boatload of delicious villains. I had four editors during that time, and all of them were great to work with. The senior editor has a strong vision for the line, and that vision appeals to readers all over the world. My books were in bookstores and Target and WalMart, and my office overflows with foreign copies from countries I’ve never visited. I have around three million books in print, and Harlequin throws the best parties in all of publishing, hands down.
But as lovely as all that is, I can’t afford to write for them anymore.
. . . .
Harlequin pays its series authors only 6%.
The royalty goes down from there.
. . . .
So why can’t I afford to write for them any longer?
Let me share with you the numbers of a book I wrote that was first published in January, 2002, still one of my favorites. My life-to-date statement says this book has sold 179,057 copies so far, and it has earned $20,375.22. (bold text by Joe) That means the average I’ve earned is a whopping 11 cents per copy. If you use the cover price to calculate (the number used in the contract), which was $4.50 at the time of release, I’ve earned an AVERAGE of 2.4% per copy.
Why is this?
First, while most of my books are sold in the US, many are sold under lower royalty rates in other countries. In this particular contract, some foreign rights and – ALL ebook royalties- are figured in a way that artificially reduces net by licensing the book to a “related licensee,” in other words, a company owned by Harlequin itself.
. . . .
To make things worse, the reversion clause is also onerous. It requires the book to be totally out of print everywhere in the world in every format for 5-7 years before an author can request reversion. After the request is made, Harlequin has another 18 months to release the book in any format anywhere in the world, and it gets to keep the rights. The book in my example is not eligible for reversion because it was issued as an ebook in Spain in 2009; a license which has earned me a total of 33 cents according to my most recent royalty statement.
. . . .
Harlequin has offered an amendment to the ebook clause of past contracts. It raises the ebook royalty to 20% of net for US, English language ebooks. However they refuse to define net in the contract, among other problems, making it impossible to determine whether the amendment is a better deal for the author or not, and as a result I have not signed.
In the end, all these points make my business decision of choosing a publisher clear. The 70% and 35% rates offered by Amazon and others are a better deal than 6% of cover price, 2.4% of average cover-price-based earnings, 1.5% of cover price and even 7.7% of what most publishers define as net earnings. I might not sell 179,000 copies of a book, but in ten years (the length of time they’ve had that 2002 book, ACCESSORY TO MARRIAGE), that number is more than possible. And if you look at the money instead of the number of copies, I need only sell 10,000 copies of a $2.99 book to reach 20K.
Link to the rest at A Newbie’s Guide to Publishing
PG will confirm that all the nasty clauses Ann describes are in the latest Harlequin contract he has seen. Plus more.
Additional bad news is that, unlike many publishing contracts from large and small publishers, Harlequin’s contracts are competently drafted, which means there are fewer holes through which an author may escape.