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Harlequin Fail

8 May 2012

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.

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Joe Konrath, Romance, Royalties

32 Comments to “Harlequin Fail”

  1. Yikes. Those are truly awful numbers.

    I think the biggest news here may be that Konrath actually updated his blog.

    Also, I have no idea why I’m first-posting all over the place today.

  2. If anyone wants to see what a Harlequin royalty statement looks like: http://jwmanus.wordpress.com/2012/05/03/dear-harlequin-your-suckitude-awes-me/

    • Thanks for sharing, Jaye. It is truly a sucky royalty statement.

    • That royalty statement is ridiculous, Jaye. I put up a 3000 word short story yesterday on an entirely new pen name, it hasn’t even gone past Amazon or Smashwords review, and I’ve still made more money than that.

      • A few weeks ago I put up a novella I wrote for St. Martin’s 17 years ago, and had the rights reverted. I did it as part of my ongoing experiments with formatting. No promo. No expectations of any sales at all. I’ve made more money on it than I have for all eight back list ebooks HQ has issued. HQ has had those books up for almost a YEAR.

        So not only does HQ pay lousy, they don’t know how to sell ebooks.

      • Yeah, that’s roughly what I made in 24 hours after putting up a novella under an unknown pen name recently.

  3. It just confirms once more that going to the self publishing route for romance is the right choice, then you stay away from all those nasty contracts and low royalities.

  4. This is terrible for the authors who stick with traditional publishers. But not unexpected.

    The publishers appear to be floundering. More and more authors are looking at Amazon and others.

    I expect a shake out of publishers in the next 3 to 5 years. I certainly would not buy stock in any publishing company, except Amazon.

    As an ebook consumer, I see this as a trend towards lower ebook prices. I also expect it will put an end to DRM in the future.

  5. brendan stallard

    Dan,

    Stop first posting, that’s MY job ‘ere:)

    PG,

    Me and ‘er indoors have just had a LONG conversation, (two minutes or so-where I managed to hold her attention.):)

    I told her the story of 50 shades of Grey. I still don’t understand how Stephenie Meyer lets that walk. Then we looked at my numbers at Fan Fiction. Then I told her about Mr Konrath and his numbers.

    THEN I showed her Ann’s post above, which was the clincher. The upshot is, as soon as I’ve finished my in-progress FFN’s….I’m going to write a book or two and stick ’em on Amazon.

    Heh, watch out world….it begins:)

    brendan

  6. I don’t mind repeating what I said on Konrath’s post:

    Ann, thank you for shining a light on a very dark subject. Like you, I can no longer afford to write for Harlequin. I spent 20 years writing romance and women’s fiction for HQ, publishing 32 novels under my own name and my pen name, Donna Clayton. My experience mirrors yours. I loved my talented editors and hated the pay.

    While attending an RWA conference, a friend of mine stood up and asked a panel of HQ editors and other ‘suits’ how they expected their authors to live on the paltry wages they paid. Their blunt answer, “We don’t.” They said they warn authors not to quit their day jobs; they tell them not to expect to earn a living as a writer. They stress that this is a hobby, not a career. I was stunned and saddened. Consequently, after my friend spoke out, she never sold another manuscript to the company.

    On a brighter note, I have found great success self-publishing 6 of my backlist titles and my one original work of fiction (The Merry-Go-Round). I have sold over 100,000 copies of my self-published books. And I see more sunshine and happiness on the horizon as I have 5 more backlist titles to which I hold the pub rights. I have also completed another original romance novel I plan to self-publish. I only wish there were more hours in the day!

    I have learned that I can sell myself and my books better than anyone else ever could.

    Ann, please know that you aren’t alone. There are many, many of us out here. I will support you any way that I can. I will download/read/review your book. I will tweet and share this message. I host a blog called Kindle Romance Novels, and I’ll be happy to promote any romance novels you have written that are available for Kindle. We’re in this together; we have to support each other.

    I wish you astounding success! I know you will find it because you didn’t leave the company empty-handed; you walked away with your talent.

    • Congratulations on your self-pub sales, Donna.

    • And yet the agents and the community tell us this is where we must focus our efforts to publish romantic fiction. Agents still sub to them, knowing we won’t make enough. All that seems to matter is the 3.5 weeks that mass market pb will be on the store shelves. It will be there — that’s what you trade your year-or-two of writing work for, plus the chance to make a paltry 2.4% next time.

      Direct to reader, plus an established relationship with a reliable small press, are the routes I’ve chosen. HQ can find someone else.

  7. By the way, this is almost too ridiculous to be believed:

    “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.”

  8. This is nothing more than legalized slavery.

    Years ago when I was starting out, long before the e-revolution, I had already determined that I would never, ever, ever sell a book to Harlequin. I heard nothing but horror stories regarding contracts and royalty rates from the romance vets.

    I would suspect that things are even worse now given publishers mad dash to grab as many rights as they can.

  9. I knew a woman in a very small country. She’s a wonderful writer, accomplished, intelligent and better than most of what’s published. She’s in a very small nation with no publishers so she started to write for HQ because …she did. Their Kimani line. She never made back her advances because they don’t sell Kimanis as internationally as other lines. Her advances kept going down (“your sales aren’t good enough”) while they kept asking for more explicit sexual content to the point where she was uncomfortable with it.

    She, too, is coming to the light. I’ll bet she’ll find great success.

    “Cross over, children!
    All are welcome at KDP!
    Go into the light!
    There is peace and serenity in digital.”–Tangina in Poltergeist, well, pretty much.

  10. Well, now we know why romance publishers seem to be the only publishers turning a healthy profit.

  11. I used to think that it was too bad that I never tried to sell any of the novels I wrote in the last 20 years. Instead, I’m SO glad I never tried to publish.

    This is just further proof.

    • Right? although my comment would be more, “glad i never figured out how to finish a novel before now” but the sense of having dodged a bullet remains.

      • I’m with you two. It makes waiting all these years all the better, knowing we’re on the crest of the self-publishing wave, and that the world of publishing is changing for the better.

        And huge props to those of us who never give up, even if it takes twenty years to finally figure out how to plot and finish that novel!

  12. Another thing that is appalling and that is turning up on blogs and comments is that authors are selling far far more of their backlist than were sold by the publishers. Bob Mayer, Alison Kent (in a comment) and others have said that they sell more of a backlist book in ONE DAY than the publishers did in six months. How can this possibly be? Either publishers are terrible at selling books or … or?

    • I suspect one factor is more active and attentive management of book sales and promotions than a publisher provides are keys, along with intelligent pricing, Elizabeth.

    • Since HQ doesn’t bother telling me how many ebooks they’ve sold, I have no way of tracking sales. Just going by the Amazon rankings, I’d say they aren’t selling very many of any one title. But, HQ has listed 1000s of books (close to 3000 in the Harlequin Treasury line). They don’t have to sell many of any one title in order to make a whole lot of money.

  13. Here’s something interesting. From the Torstar (HQ’s parent company) stockholder report:

    “Book Publishing Segment revenues were down $8.7 million in the first quarter of 2012 including a $0.7 million improvement from the impact of foreign exchange. Excluding the impact of foreign exchange, revenues were down $9.4 million in the quarter with declines in print revenues more than offsetting digital revenue growth.”

    http://www.mediacastermagazine.com/press-releases/story.aspx?id=1001189911

    Didn’t we just see reports from other publishers that digital sales were making up for declining print sales? If I’m reading this right, where digital sales are concerned, HQ has lost its edge. They became the dominant romance publisher in the 90s by eating its competition. How in the world are they going to eat thousands of small ebook publishers and indie writers? Interesting.

    • Very interesting, Jaye. Thanks for sharing.

    • IIRC, Simon & Schuster was reporting increased profits but decreased sales. Digital sales aren’t making up for declining print sales, but digital sales (when you keep 75 percent of net) are so much more profitable that the bottom line can improve even as the business shrinks.

  14. The amendment Harlequin offered comes into effect July 1, 2012. Funny how all my older series books appeared on Amazon as an ebook in February and March.

  15. This is a disgusting and disgraceful contract. It makes me feel grateful that I’ve never submitted anything to any Harlequin line (not even to Luna); that I write more fantasy than romance helps.

    Never before have I been so glad to be an “unknown.”

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