From Writer Beware:
Often viewed as experiments, these digital-only and digital-first imprints may offer less favorable terms than the publisher’s standard contracts, in an effort to shift more of the risk to authors (one example: Random House’s Hydra, Flirt, and Alibi imprints, a controversy that had a happy ending when Random House changed the imprints’ deal terms to make them more author-friendly). Another potential problem: in the rush to take advantage of a burgeoning new market, plans may not be as carefully laid as they should be, and books may be acquired and pushed out too fast.
This seems to have been the case at Crimson Romance, F&W Media’s digital romance imprint.
. . . .
I’ve seen several Crimson contracts. There are no advances. Books are published within six months of delivery (fast by traditional standards). Royalties are paid on the publisher’s net (a.k.a. “gross amount received”), 30% for ebooks and 10% for print.The grant of rights is life-of-copyright, with a reversion clause that allows authors to request reversion if royalties fall below $250 in each of two consecutive royalty periods (royalty periods are six months). However, this is qualified somewhat by the fact that, as an alternative to simply returning rights, the publisher can choose to “[take] such steps as it is able to accelerate sales” beyond the $250 threshold; if it can manage that within six months of the author’s reversion request, it doesn’t have to revert. In other words, if the publisher can get sales to $251, it gets to keep authors’ rights for at least two more royalty periods.*
Last month, I heard from a few Crimson authors about problems at the imprint. I put out a call for contact, and received a flood of emails. The issues cited are very consistent, the most frequent being late or missing royalty statements and payments, paltry sales, and hasty and/or inadequate editing.
. . . .
[Speaking about a subscription service that wasn’t provided for in contracts between Crimson and authors] Authors’ March 31, 2013 royalty statements didn’t include subscription service income, and those who contacted Crimson to ask why discovered that there was still no payment plan in place. Not until April 23 was a payment plan formally announced. Using the contract royalty percentage, Crimson is allocating 30% of subscription income to authors. But instead of pro-rating authors’ share based on the number of downloads, as many authors had expected, payment will be based on the amount of time each book has been available in the service.
. . . .
Crimson is apparently not reporting actual download numbers; and since the subscription service earned only modest revenues in its first royalty period, royalties due were tiny, with books published in the last month of the royalty period receiving just $0.42.
Link to the rest at Writer Beware and thanks to Jodi for the tip.
It’s a good time to reiterate two pieces of PG advice:
1. Read and understand every contract you sign.
2. Know who you are dealing with. Even with a perfect contract, you’re going to lose money if you deal with flakes.