From Writer Beware:
In the course of my work with Writer Beware, I see a lot of publishing contracts (for the most part, these are from small presses). One of the red flags I’m encountering more often these days is early termination fees: a penalty that must paid by the author if s/he wants to get out of a contract early.
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Why are termination fees a red flag? Obviously they are onerous for authors, who might have good reason to want to end a contract early, and can’t do so without opening up their wallets.
Of more concern is the fact that publishers may employ them abusively, holding them over the heads of unhappy writers, attempting to use them as an extra income source by offering to jettison dissatisfied authors at the slightest provocation (one publisher I know of even provides an annual “get out of jail free” period where writers can request an invoice), or terminating the contracts of writers who’ve pissed them off and demanding the fee even though termination wasn’t the writer’s decision.
I’ve gotten complaints about all of these. For instance, last year I heard from an author who was quoted an early release fee in the low four figures, described as a reimbursement for production costs–despite the fact that the book had been in circulation for some time and the publisher had likely made back its investment.
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But termination fees aren’t just bad for authors. They’re bad for publishers, too.
Sure, from an honest small publisher’s perspective–a publisher that isn’t planning on browbeating its authors with termination fees, or using the fees to try and make an extra buck–a termination fee may seem to make good business sense. “We don’t want to hold onto an unhappy author,” the publisher might reason. “But we invest a lot of work in editing, designing, marketing, etc. So if we can’t maximize our investment by selling the author’s book for the full contract term, it’s only fair that we should get some reimbursement if she decides to leave early.”
Problem is, if the unhappy author can’t afford the fee, the publisher is stuck with her anyway–along with, possibly, the extra resentment produced by the author’s knowledge that she could have escaped if only she’d had the cash.
Link to the rest at Writer Beware and thanks to Deb for the tip.
PG says a termination fee is always a red flag. While PG will concede the theoretical possibility that an honest publisher somewhere includes an early termination fee in its contract, so many fly-by-night publishers use this shady tactic that you can assume a termination fee means there’s a 99% probability that a crooked or inept publisher is behind it.
One additional reason that early termination fees are a bad idea for a publisher – a disgruntled author with some time on his/her hands can use social media to make certain that anyone who spends five minutes with Google will learn that the publisher engages in questionable practices plus it doesn’t know how to sell books.
There’s an old marketing adage that a happy customer will tell one other person about their experience while an unhappy customer will tell ten other people why they’re unhappy. Social media of all sorts multiplies the platform of the unhappy customer a thousand-fold.
The days when an unhappy author had to keep his/her mouth shut about mistreatment by a publisher for fear of being blackballed are over. More and more frequently, an unhappy author will tell the world.
Since PG has gotten warmed up about publishers mistreating authors, he will make a prediction.
PG believes, more and more of the smartest authors are pursuing self-publishing because that’s the best way to make a living or getting rich as an author in 2016. If this trend continues (and PG sees no reason why it will not), Big Publishing will eventually end up with all the dumb authors and none of the smart ones.
PG does not mean to insult traditionally-published authors, particularly those who started down that path a long time ago, but the genteel poverty that is increasingly associated with the privilege of telling others you have a New York publisher won’t pay your mortgage or let you quit your day job.
What the cool kids were doing ten years ago is not what they’re doing today.