Royalties

The State of a Genre Title, 2015

11 August 2015

From John Scalzi:

Eighteen months ago, as Redshirts moved from its hardcover era into trade paperback, I did an examination of its sales to the point, across all its formats, and chatted about what its sales meant, or didn’t mean, and what we could learn from the numbers. Last week, Lock In, my most recent novel (until tomorrow), transitioned from hardcover to mass market paperback, and I thought it would be interesting and possibly useful to do something similar with it. So I asked for numbers from my publishers. Here they are, up to July 31, 2015. The numbers are rounded to the nearest 100.

a1

For those who choose not to whip out their calculators, that’s total sales of 87,500 copies in Lock In’s hardcover sales era, in hardcover, eBook and audiobook. Note the hardcover/eBook sales do not include the UK edition of Lock In, published by Gollancz, nor any foreign language editions. These are North American edition sales (Audible owns world English rights for its version, and so the audio numbers may include sales outside North America). Note also that the audiobook numbers are sales, not downloads, important because Lock In had two versions, and the pre-orders included both versions.

So, thoughts on these numbers.

1. 87.5k is a pretty healthy number for sales here. If you want to do a comparison to Redshirts, the total sales numbers are up (Redshirts sold 79.2k in its hardcover era), although Redshirts‘ time in hardcover was shorter, so in all it may be a wash. The distribution of sales is also a reminder that all sales channels matter — if I were to lose access to bookstore distribution, for example, I’d lose roughly a quarter of my total sales for this sales pass. If I weren’t doing audio, in this particular case (I’ll discuss this more a couple of points down), I would have lost nearly half.

This continues to be my major concern with digital-only self-publishing, incidentally: there’s money being left on the table if you can’t address all these sales channels. Most self-publishers (or micro publishers) don’t have access to bookstores, nearly all of which continue to operate on a “returns” basis. This is not about the ability to create a physical copy of a book; at this point that can easily be done with print-on-demand options. It’s about having the book already on the shelves, attractively packaged and ready to buy, when the customer walks into the store. If you don’t have that, you’ve largely lost out in that sales avenue. Likewise audio if you’re not there.

At this point in my career, I’m a four-quadrant author, which means that at the end of the day my income as a novelist comes out of four areas: print, eBook, audio, and foreign sales. For any one book or project, one of these might be significantly out of proportion to others, in terms of sales. But over the length of time, they’ve all tended to even out as backlist sales kick in and other factors come into play. At this time, and I expect still for a while to come, the best way to address all these markets effectively and consistently is to partner with publishers.

. . . .

What does this tell us (anecdotally) about audio? One, that genre work can sell very well indeed in the segment, which should be immensely heartening to authors in genre; two, that audio as a segment is growing and it makes sense to get into it if you can; three, that audio has its own audience, with its own sets of desires and expectations, and that’s something you’ll want to factor in as you create you work. At this point I absolutely give consideration to how my worksounds as well as reads — I’m starting to use substantially fewer dialogue tags (“he said,” “she said”), as an example.

This also goes to my argument of why working with established publishers can continue to have its advantages for writers. Audible (in my case, other major audio publishers in the case of other authors) has the wherewithal to get the best narrators, an entire marketing and PR staff and the ability to push a title in the space, in a manner and with the wide-band strength that it would be very difficult for me, as an individual, to do. They do it well, which is a thing, and they also do it better than I would, which is another, separate thing. I benefit, and reach an audience I wouldn’t otherwise, through their competence and expertise. Which is why I’m glad to be working with them.

Which suggests this is a fine place to bring this up: Last Friday I signed a multi-year, multi-book contract with Audible, who will be the audiobook publisher for the books that are to be published by Tor over the next decade. I’m going to skip over the fiddly details of that contract right, except to say that I’m very very happywith it, and also very happy to be working with Audible for the next decade. Like Tor, they are simply the best at what they do, and I like working with the best.

Link to the rest at John Scalzi and thanks to Dale for the tip.

Here’s a link to John Scalzi’s books. If you like an author’s post, you can show your appreciation by checking out their books.

Audible Royalties

6 August 2015

Mrs. PG recently received an email from a writer friend regarding Audible royalties.

The narrator the writer friend had always worked with on her audiobooks didn’t want to do any more work for Audible on a royalty-share basis because of the $1.99 purchase price for Whispersync versions of the author’s ebooks. The narrator said the royalties would be too low.

Mrs. PG only recently issued her first audiobook via Audible, so PG doesn’t have much real-world experience to review in detail.

A quick scan of audiobook prices for Amazon’s bestsellers showed fiction audiobooks ranging from $10-$14. Audible says Whispersync prices range from $1.99 to $12.99.

Of course, for Audible audiobooks, you have the $15 per month subscription which gets you one free audiobook per month plus 30% off additional titles.

This matter was discussed on TPV back in 2013. PG doesn’t recall hearing anything about it since.

So, is there something new or is this Internet misinformation?

 

Price Wars and Victims

6 August 2015

From Kristine Katherine Rusch:

I had an interesting experience this week: I just bought a brand-new hardcover novel for less than I would have paid for the ebook. I wouldn’t have noticed except that I’ve been doing a lot of stuff online this week, and Amazon, good marketers that they are, sent me an e-mail to let me know that I had received a preorder discount of 90 cents.

I prefer to read paper books, although I do read ebooks, especially when I’m binging on a series.

The thing is, I’d ordered the book six months ago from Amazon. The book, Sara Paretsky’s Brush Back (which I’m enjoying, thank you very much), has a publisher’s list price of $27.95 for the hardcover. Amazon never listed the book at full price. I believe I initially ordered a $17.95 hardcover. I kept getting notices of discounting from Amazon, until this last, which arrived after the book was shipped.

Caveat here: I preorder because it makes some random day feel like Christmas. Suddenly, a book I really, really want shows up in the mail, almost like a surprise gift from a special friend.

I had forgotten that the Paretsky was coming out in August. If you’d asked me, I would have said September, because that used to be her release date. So when I received the most recent notice of the preorder discount—one that sounded final, final—I went to Amazon and looked up the publication date for the book.

And just about fell off my chair when I saw that the Kindle edition was $13.99 and the hardcover was listed at $13.

. . . .

As I searched for the publisher’s list price, too lazy to get up and pick up my copy from the other room, I found that Barnes & Noble lists the book at $16.83 for the hardcover and $11.84 for the Nookbook.

. . . .

Agency pricing has returned to ebooks, which means that publishers are setting their own ebook prices and the retailers, like Amazon, are not discounting. The ebook price on Amazon is clearly a price-match with Barnes & Noble, not something that Amazon has done.

I poked around Amazon, looking at e-book prices, and almost fell off my chair for a second time. Lisa Scottoline’s next book, which releases in October, has a $14.99 ebook. So does Michael Connelly’s November release. And Stephen King’s November release. Robert Crais’s next book shows a $12.70 Kindle edition paired with a $13.37 hardcover. Does that sound familiar?

And what’s fascinating to me is that these books, and the dozens of other traditionally published upcoming releases that I looked at are coming out of different publishing companies. Not different imprints of the Big 5, but each of the Big 5.

Once again, pricing seems…agreed upon.

. . . .

Nonetheless, Amazon is leaving the ebook prices—set by the publisher—alone…and messing with the paper prices.

I mean seriously messing with the paper prices. I should not have been able to get a brand-new hardcover for more than half off the list price on the day the book released. Maybe at Christmas. Maybe nine months from now, as the publisher gets ready to release the mass market paperback.

But now? Release day? Seriously?

. . . .

The traditional publishers are screaming about Amazon. I’ve learned over the years that when someone screams about something, they’re doing so because they feel some kind of pressure, some kind of pinch.

How could traditional publishers be feeling a pinch from Amazon? After all, in the United States, Amazon is selling more books than any other retailer. Why would that hurt traditional publishers? Is it hurting traditional publishers?

Oh, my friends. One should never ask these sorts of questions. Because the answers are often surprising.

From the evidence that I’m seeing, here’s what I believe is going on.

Amazon is clearly fighting the price war on a variety of fronts, and I’m sure Amazon’s policy is pretty simple: They want affordable ebook prices. So if traditional publishers want to charge $14.99 for a Kindle edition, then Amazon will make sure no one buys the expensive Kindle edition by lowering the price of the hardcover.

My unscientific examination shows that when the Kindle prices are high, the discount on the paper edition is deeper.

. . . .

When publishers returned to Agency Pricing, they had to agree to the same ebook royalty schedule that indies have. Which means that for any ebook priced over $9.99, the publisher will receive 35% of the sales price. (If the publisher prices the books between $2.99 and 9.99, then the publisher receives 70%)

The publisher, with a $14.99 ebook, will receive a royalty payment per sale of $5.25. If the publisher had priced the ebook at $9.99, the publisher would have received $6.99.

So traditional publishers are deliberately receiving a lower percentage royalty to keep the ebooks prices artificially high.

But traditional publishers aren’t the only ones taking less money to prove a point. If business is being conducted as it usually is, then traditional publishers sell their books to Amazon at the discount they use for all of the other big accounts (Wal-Mart, Costco, and so on).

That would be 60-64% of list price. This is known as a deep discount.

So, if Amazon pays 64% of $27.95 for the hardcover of, say, the Paretsky book, then Amazon is paying a little over $10 per book. Amazon is currently selling that book for $13, making a $3 profit.

If Amazon sells the Kindle edition of that book, Amazon makes $7.57 per sale. (65% of $11.64) If Amazon sells any of the $14.99 ebooks, it makes $9.75—over three times what it’s making on these discounted hardcover new releases.

Why is Amazon doing it?

I’m guessing here that the price wars continue. And Amazon is trying to force publishers to return to $9.99 ebook prices.

. . . .

Publishing contracts have changed in the past 15 years. Now, each contract has a discount schedule, reducing the royalty if a book is sold at deep (or what the average person would call high) discount. In the past, many contracts didn’t have a discount schedule; the publisher would eat the loss.

Now writers get a much lower royalty if the actual discount to the retailer is low.

At 60-64%, some writers are receiving only a 1-2% royalty. Let’s be charitable and give that writer a 2% royalty. That’s 2% of $27.95, which comes out to 56 cents per hardcover sold.

If the book sells at full price, the writer would get 10 to 15 to 20%, depending on the royalty schedule. (Often royalties are based on sales numbers—10% to 150,000 copies, 15% to 500,000 copies, 20% over 500,000 copies.)

Let’s be realistic instead of charitable this time. Most writers traditionally published in hardcover never sell 150,000 copies of that hardcover. The writer will get the 10% royalty, which is $2.75 per book. Not 56 cents. That’s a significant loss for books sold at deep discount.

But it’s a fact of life. That writer would get the 56 cents if Amazon sells the book at $27.95 or if Amazon sells the book at $13.37. It won’t matter to the writer at all.

The squeeze occurs on the ebook prices. Currently traditionally published writers across the boardare getting 25% of net income received on ebook sales.

So…if the publisher sells the ebook through Amazon at $14.99, and Amazon pays the publisher a royalty of 35%, then the publisher will receive $5.25. That’s “net income received” of which the writer will get 25% or $1.31.

However, if the publisher sets the ebook price at $9.99 on Amazon, the publisher will receive $6.99. The writer will get 25% of that $6.99 or $1.74. A little better.

But the other bonus at the lower ebook price is this: It has been proven over the years that the lower price point brings in more sales. So the writer would receive more money per sale and also make more sales.

The traditionally published writer is losing out here.

Link to the rest at Kristine Katherine Rusch and thanks to David for the tip.

Here’s a link to Kristine Katherine Rusch’s books. If you like an author’s post, you can show your appreciation by checking out their books.

New Publisher Canelo Offers UK Authors Strong Incentives

14 July 2015

From Publishing Perspectives:

In the UK a new digital publisher called Canelo releases its first titles this week and will discover over coming months whether its bold, innovative approach will work. It is operating in a different way to most publishers in that it is not paying advances, but offering its authors much higher royalties, starting at 50% and going up to 60%. It is also signing titles on short, five-year licenses, giving authors the option to take titles elsewhere if they wish, and is rediscovering old authors and backlist titles, presenting them afresh to a new audience.

. . . .

“One of the reasons we started Canelo is that there aren’t a huge number of digital publishers in Europe,” he said. “We certainly think the sector has a long way to go and we want to be at the forefront. Our offer is completely different. We are making the case to agents that we are offering a different model, which has all the same levels of investment, editorial attention and expertise, design, marketing and publicity, but offers the author a better deal and much more flexibility. They aren’t locked in. Generally, people are receptive, as they can see that authors can make more money this way and have more freedom, whilst being published to the highest standard.”

. . . .

Agents have had something of a battle with UK publishers on ebook royalties and point out that to find the higher rates Canelo is offering they often have to look overseas. One commented: “We have more success in securing higher rates for ebooks from European publishers, than we do from the UK or the US — and that is significant because these publishers are often paying for the translation too.”

Link to the rest at Publishing Perspectives and thanks to Dana for the tip.

Half of Net Proceeds New Standard for Trad Pub EBook Royalties

9 July 2015

Author John Ellsworth received an email from The Authors Guild which he posted on his blog, forwarding a link to PG:

From Authors’ Guild 7/9/15:

We announced our Fair Contract Initiative earlier this summer. Now our first detailed analysis tackles today’s inadequate e-book royalties. At the heart of our concern with the unfair industry-standard e-book royalty rate is its failure to treat authors as full partners in the publishing enterprise. This will be a resounding theme in our initiative; it’s what’s wrong with many of the one-sided “standard” clauses we’ll be examining in future installments.

Traditionally, the author-publisher partnership was an equal one. Authors earned around 50% of their books’ profits. That equal split is reflected in the traditional hardcover royalty of 15% of list (cover price, that is, not the much lower wholesale price), and in the 50-50 split of publishers’ earnings from selling paperback, book club, or reprint rights. Authors generally received an even larger share than the publisher for non-print rights (such as stage and screen rights) and foreign rights.

But today’s standard contracts give authors just 25% of the publisher’s “net receipts” (more or less what the publisher collects from a book sale) for e-book royalties. That doesn’t look like a partnership to us.

We maintain that a 50-50 split in e-book profits is fair because the traditional author-publisher relationship is essentially a joint venture. The author writes the book, and by any fair measure the author’s efforts represent most of the labor invested and most of the resulting value. The publisher, like a venture capitalist, invests in the author’s work by paying an advance so the author can make ends meet while the book gets finished. Generally, the publisher also provides editing, marketing, packaging, and distribution services. In return for fronting the financial risk and providing these services, the publisher gets to share in the book’s profits. Not a bad deal. This worked well enough throughout much of the twentieth century: publishers prospered and authors had a decent shot at earning a living.

How the e-book rate evolved

From the mid-1990s, when e-book provisions regularly began appearing in contracts, until around 2004, e-royalties varied wildly. Many of the e-rates at major publishing houses were shockingly low—less than 10% of net receipts—and some were at 50%. Some standard contracts left them open to negotiation. As the years passed, and especially between 2000 and 2004, many publishers paid authors 50% of their net receipts from e-book sales, in keeping with the idea that authors and publishers were equal partners in the book business.

In 2004, we saw a hint of things to come. Random House, which had previously paid 50% of its revenues for e-book sales, anticipated the coming boom in e-book sales and cut its e-rates significantly. Other publishers followed, and gradually e-royalties began to coalesce around 25%. By 2010 it was clear that publishers had successfully tipped the scales on the longstanding partnership between author and publisher to achieve a 75-25 balance in their favor.

The lowball e-royalty was inequitable, but initially it didn’t have much effect on authors’ bottom lines. As late as 2009, e-books accounted for a paltry 3–5% of book sales. Authors and agents ought to have pushed back, but with e-book sales so low it didn’t make much sense to risk the chance of any individual book deal falling apart over e-royalties. We called the 25% rate a “low-water mark.” We said, “Once the digital market gets large enough, authors with strong sales records won’t put up with this: they’ll go where they’ll once again be paid as full partners in the exploitation of their creative work.”

E-books now represent 25–30% of all adult trade book sales, but for the vast majority of authors the rate remains unchanged. If anything, publishers have dug in their heels. Why? There’s a contractual roadblock, for one: major book publishers have agreed to include “most favored nation” clauses in thousands of existing contracts. These clauses require automatic adjustment or renegotiation of e-book royalties if the publisher changes its standard royalty rate, giving publishers a strong incentive to maintain the status quo. And the increasing consolidation of the book industry has drastically reduced competition among publishers, allowing them more than ever to hand authors “take it or leave it” deals in the expectation that the author won’t find a better offer.

The elephant in the room

And then there’s the elephant in the room: Amazon, which has used its e-book dominance to demand steep discounts from publishers and drive down the price of frontlist e-books, even selling them at a loss. As a result, there’s simply not as much e-book revenue to split as there was in 2011when we reported on the e-book royalty math. At that time, publishers made a killing on frontlist e-book sales as compared to frontlist hardcover sales—at the author’s expense—because, as compared to today, the price of e-books was relatively high.

When we analyzed e-royalties for three books in the 2011 post, “E-Book Royalty Math: The House Always Wins,” we found that every time an e-book was sold in place of a hardcover, the author’s take decreased substantially, while the publisher’s take increased.

Since 2011, we have found that publishers’ e-gains have diminished. But the author’s share has fallen even farther. Amazon has squeezed the publishers, to be sure. The publishers have helped recoup their losses by passing them on to their authors.

These were our calculations for several books in 2011. The trend was obvious. Compared with hardcovers, each e-book sold brought big gains to the publisher and sizable losses to the author when the author’s royalties are compared to the publisher’s gross profit (income per copy minus expenses per copy), calculated using industry-standard contract terms:

Author’s Royalty vs. Publisher’s Profit, 2011

The Help, by Kathryn Stockett

Author’s Standard Royalty: $3.75 hardcover; $2.28 e-book.

Author’s E-Loss = -39%

Publisher’s Margin: $4.75 hardcover; $6.32 e-book.

Publisher’s E-Gain = +33%

Hell’s Corner, by David Baldacci

Author’s Standard Royalty: $4.20 hardcover; $2.63 e-book.

Author’s E-Loss = -37%

Publisher’s Margin: $5.80 hardcover; $7.37 e-book.

Publisher’s E-Gain = +27%

Unbroken, by Laura Hillenbrand

Author’s Standard Royalty: $4.05 hardcover; $3.38 e-book.

Author’s E-Loss = -17%

Publisher’s Margin: $5.45 hardcover; $9.62 e-book.

Publisher’s E-Gain = +77%

What’s happening now? We ran the numbers again using the following recent bestsellers. Because of lower e-book prices, the publishers don’t do as well as they used to, though they still come out ahead when consumers choose e-books over hardcovers. But authors fare worse than ever:

Author’s Royalty vs. Publisher’s Profit, 2015

All the Light We Cannot See, by Anthony Doer

Author’s Standard Royalty: $4.04 hardcover; $2.09 e-book.

Author’s E-Loss= -48%

Publisher’s Margin: $5.44 hardcover; $5.80 e-book.

Publisher’s E-Gain: +7%

Being Mortal, by Atul Gawande

Author’s Standard Royalty: $3.90 hardcover; $1.92 e-book.

Author’s E-Loss= -51%

Publisher’s Margin: $5.10 hardcover; $5.27 e-book.

Publisher’s E-Gain: +3.5%

A Spool of Blue Thread, by Anne Tyler

Author’s Standard Royalty: $3.89; $1.92 e-book.

Author’s E-Loss: -51%

Publisher’s Margin: $5.09 hardcover; $5.27 e-book.

Publisher’s E-Gain: +3.5%[1]

Exceptions to the rule

It’s time for a change. If the publishers won’t correct this imbalance on their own, it will take a critical mass of authors and agents willing to fight for a fair 50% e-book royalty. We hope that established authors and, particularly, bestselling authors will start to push back and stand up to publishers on the royalty rate—on behalf of all authors, as well as themselves.

There have been cracks in some publishers’ façades. Some bestselling authors have managed to obtain a 50% e-book split, though they’re asked to sign non-disclosure agreements to keep these terms secret. We’ve also heard of authors with strong sales histories negotiating 50-50 royalty splits in exchange for foregoing an advance or getting a lower advance; or where the 50% rate kicks in only after a certain threshold level of sales. For instance, a major romance publishing house has offered 50% royalties, but only after the first 10,000 electronic copies—a high bar to clear in the current digital climate. But overall, publishers’ apparent inflexibility on their standard e-book royalty demonstrates their unwillingness to change it.

We know and respect the fact that publishers—especially in this era of media consolidation—need to meet their bottom lines. But if professional authors are going to continue to produce the sort of work publishing houses are willing to stake their reputations on, those authors need a fair share of the profits from their art and labor. In a time when electronic books provide an increasing share of revenues at significantly lower production and distribution costs, publishers’ e-book royalty practices need to change.

[1] In calculating these numbers and percentages for hardcover editions, we made the following assumptions: (1) the publisher sells at an average 50% discount to the wholesaler or retailer, (2) the royalty rate is 15% of list price (as it is for most hardcover books, after 10,000 units are sold), (3) the average marginal cost to manufacture the book and get it to the store is $3, and (4) the return rate is 25% (a handy number—if one of four books produced is returned, then the $3 marginal cost of producing the book is spread over three other books, giving us a return cost of $1 per book). We also rounded up retail list price a few pennies to give us easy figures to work with.

Likewise, in calculating these numbers and percentages for the 2015 set of e-books, we are assuming that under the agency model—which is reportedly the new standard in the Big Five’s agreements with Amazon—the online bookseller pays 70% of the retail list price of the e-book to the publisher. The bookseller, acting as the publisher’s agent, sells the e-book at the price established by the publisher. The unit costs to the publisher are simply the author’s royalty and the encryption and transmission fees, for which we deduct a generous 50 cents per unit.

Link to the rest at John Ellsworth and here’s a link to the Authors Guild website

Here’s a link to John Ellsworth’s books

Taylor Swift says Apple Music is ‘shocking, disappointing, and completely unlike’ the company

22 June 2015

From Business Insider:

In response to mounting criticism of her decision to snub Apple Music, Taylor Swift has posted a letter explaining her boycott on Sunday.

She writes Apple Music’s decision to not pay musicians any royalties for its three-month free trial period is “shocking, disappointing, and completely unlike this historically progressive and generous company.”

She says her not being part of Apple Music isn’t just about her — it’s about protecting new artists “who will not be paid for its success,” she writes.

She continues: “Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing. I say this with love, reverence, and admiration for everything else Apple has done. I hope that soon I can join them in the progression towards a streaming model that seems fair to those who create this music. I think this could be the platform that gets it right.”

. . . .

Apple plans to pay music owners 71.5% of Apple Music’s subscription revenue after the trial period, Recode reports. Robert Kondrk, one of the Apple executives who negotiates music deals, explained to Recode that “Apple’s payouts are a few percentage points higher than the industry standard, in part to account for the lengthy trial period; most paid subscription services offer a free one-month trial.”

Link to the rest at Business Insider and thanks to Suzie for the tip.

UPDATE: The Wall Street Journal is reporting that Apple has backed off its plan not to pay royalties to artists during the three-month free period after the protest of Taylor Swift. Link to the article at The Wall Street Journal (Link may expire)

Indie Earnings

18 June 2015

From author Brenda Hiatt:

I’ve finally had a chance to compile all the results from the 2014 “Quick & Dirty” indie earnings survey and crunch the numbers to the point I can put together a report that I hope you’ll find useful.

. . . .

This year, rather than asking authors to email me responses to my questions, I used an anonymous Google form survey, which had both advantages and drawbacks. The anonymity and ease of sharing and answering this year’s survey netted FAR more responses than previously and also made MY job enormously easier (so yes, I’ll be doing it this way going forward, for sure!) However, it also means I can’t follow up if a particular respondent’s answers are unclear or contradictory. For this reason, I had to delete a few authors’ responses entirely (but only a very few-maybe 3 or 4 out of 200+).

. . . .

This year I received responses from a total of 227 authors, representing 2,594 indie titles of which 1928 were frontlist indie titles and 666 were backlist (trad-pubbed, now indie) titles, assuming no duplicates (see above).

AVERAGE indie earnings reported per author: $91,337

Average number of indie-only (frontlist) titles per author: 8.45
Average number of backlist (but now indie) titles: 2.93
Average TOTAL indie titles per author: 11.43 (again, this number could be slightly inflated by any duplicate reporting)

Perhaps slightly more useful, since averages can be skewed by outliers:

MEDIAN earnings per author: $20,000 (half of earnings fell above, half below this amount)

Earnings reported ranged from a low of $4 (which might possibly have been a typo) to a high of $2.1 million.
This works out to an AVERAGE of $7,996 per title for 2014 earnings. (If there are duplicates in the frontlist & backlist columns, average per-title earnings would be greater.)

As I saw in my previous indie earnings surveys, the more titles an author has out, the greater that author’s earnings tend to be. HOWEVER, this year that correlation is noticeably weaker than in previous years. Several of the very top earners had fewer titles than many earning much less.

. . . .

[T]hose earning upwards of $250,000 in 2014 fell predominantly into three genres:
Contemporary Romance, Paranormal Romance, and Romantic Suspense/Mystery (in that order).

Earnings-wise, Historical Romance appears to be next in line, followed by such genres as Erotic Romance, Science Fiction/Fantasy and Young Adult (order is less certain here as fewer authors of these genres responded).

This year I also asked which vendors accounted for the majority of authors’ earnings. As expected, Amazon was #1 for the vast majority of respondents. In fact, out of 227 authors, only 11 listed a vendor other than Amazon as their primary indie income source.

Link to the rest at Brenda Hiatt and thanks to Jo for the tip.

Here’s a link to Brenda Hiatt’s books

Good Agents Audit Royalty Statements

5 June 2015

From agent Kristin Nelson:

Over the last decade, I really wish I had tracked how much money NLA has recovered by carefully auditing our royalty statements every accounting period. Because of some big errors found a couple of years ago, it’s probably to the tune of over $600,000 recovered at this point, and it wouldn’t surprise me if that total was actually more. Even now, nary an accounting period goes by that we don’t recover at least $500 to $3,000 owed to a client.

On rare occasions, we have even found errors in the Publisher’s favor—and yes, we do notify them to highlight the correction. Luckily, those have only amounted to several hundred dollars at any given time.

. . . .

Most errors we catch are human errors. In other words, the Publisher’s in-house royalty management staff simply keyed incorrect information into their accounting system. Also, “accounting departments” at some mid-sized publishers and small presses are staffed by English majors. Mistakes will be made.

These mistakes need to be found and corrected and the monies paid to the author client. Here is the jaw-dropping fact: A good percentage of agents do not audit their clients’ royalty statements.

Let me repeat that. Even though authors hire literary agents to guide their careers and most importantly, manage their business publishing interests (royalties being a huge component of this), many agents do not actively audit or even read client royalty statements. This leaves authors to fend for themselves regarding reading and understanding their statements.

. . . .

When I was newer to this business, I did the time-consuming auditing and analysis myself, every accounting period, and shared my comments with my client. Every accounting period. I even hired a professional book royalty auditor to mentor and read behind me to assess my competence and capability. Then I hired and trained our amazing Contracts & Royalties Manager Angie Hodapp to handle this at NLA.

And Angie took it to a level that leaves me in awe every accounting period. I imagine our clients are often in awe as well when every six months, she sends a detailed letter with my comments as well as her analysis of the statement and what questions we had to track down and if extra monies are owed.

Link to the rest at Kristin Nelson

PG agrees with Kristin that every agent should do this for every royalty report.

However, he observes, if most of the mistakes on royalty reports are human error, one would expect errors to the publisher’s disadvantage would make up about 50% of the errors instead of occurring only on “rare occasions.”

Canadian Writers Working Harder While Earning Less

29 May 2015

From The Writers’ Union of Canada:

The Writers’ Union of Canada (TWUC) has released today a summary report from its latest income survey of Canadian writers. Devaluing Creators, Endangering Creativity contains the very bad news that writers in Canada are making 27% less from their writing than they were making in 1998 (when last surveyed to this extent). What’s more, a full 45% of those surveyed indicated they are working harder in order to earn that lower amount.

The Writers’ Union believes these results represent a cultural emergency for Canada. For 81% of respondents, income from writing would not allow them to live above the poverty line, and the average writer’s income ($12,879) is a full $36,000 below the national average. This despite the fact that writers have invested in post-graduate education in large numbers.

“This is not a sustainable situation,” said TWUC Chair Harry Thurston. “If we want a strong and diverse publishing and cultural industry in Canada, it’s essential that creators are reasonably rewarded. Everyone — governments, corporations, institutions, and individual consumers — have a part to play in fairly compensating writers for the content they expect, need and enjoy.”

Similar findings have emerged from recent income surveys in the U.S. and the United Kingdom. Writers’ incomes are in steep decline across the English-language publishing industry. Changes to contracts and publishing practices (declines in royalty percentages and advances on sales), industry consolidation, as well as worldwide pressure on professional creators to work in a disastrously weakened copyright environment are all likely contributors.

Link to the rest at The Writers’ Union of Canada and thanks to Tudor for the tip.

It’s interesting to PG that this announcement from Canada is released at the same time The Authors Guild announces a steep decline in the income of traditionally-published authors in the United States.

Both announcements fail to mention the incomes of indie authors.

Halt sales of Jonasson bestseller, court tells UK publisher

28 April 2015

From The Guardian:

The high court has ordered the British publisher of Jonas Jonasson’s smash-hit novel The 100-Year-Old Man Who Climbed Out of the Window and Disappearedto stop selling it, following an alleged failure to pay royalties.

Hesperus Press was ordered, after a hearing on 24 April, to cease publishing, printing and selling the English translation of Jonasson’s bestselling Swedish novel and to return copies to Hachette Book Group, which owns world English rights and which brought the legal action against the independent publisher.

“Following an action brought by Hachette Book Group against Hesperus in London, the English high court has issued an order confirming Hesperus’s undertaking to desist from selling or distributing an English translation of The 100-Year-Old Man,” said a spokesperson for Hachette.

The case follows a report in the trade magazine The Bookseller last week that, although Jonasson’s story of a man who runs away from his 100th birthday celebrations at his old people’s home had sold more than 500,000 print copies and 700,000 ebooks since it was published in English in July 2012, his agent Carina Brandt had said the author had seen only “a small amount” of royalty money in the autumn of 2012, and nothing since.

Jonasson told the magazine last week: “My former agency, my current agent, my Spanish lawyers and Hachette US lawyers are involved in this mess. I feel helpless. I do not understand what happens except that it’s a lot of money that I have not received.”

. . . .

Roma Tearne, a Sri Lanka-born novelist whose books have been shortlisted for the Costa and longlisted for the Orange prize in the past, released her new novel, The Last Pier, with Hesperus on 10 April. Set just before the second world war, it “vividly depicts the devastating impact of war on ordinary lives”, said the Independent, and “creates a palpable sense of some danger that’s lurking in the shadows”, but the novel is now facing obscurity with no staff to champion it.

“It took three years to get to publication, and I’d got a wonderful team at Hesperus who loved the book. It’s such a fragile thing, this book – it is getting fantastic reviews, but I just don’t know what the future is for it,” said Tearne. “The thing I want is that this book doesn’t die. It isn’t about the money. I went to a small publisher for the TLC, and I got it, so this is tragic. I found out as the publishing date was coming up. The editor was in tears telling me – they were terribly upset. My agent is now investigating. More than anything, I want the book to live.”

Link to the rest at The Guardian and thanks to Meryl for the tip.

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