Royalties

On the True Costs of Bargain Books, Or Guilting Readers Because Authors Signed Bad Contracts

10 June 2016

From The Digital Reader:

James Mayhew has taken up the cause of trying to guilt, harangue, or otherwise convince readers to overpay for books from legacy publishers.

About a month ago (I just now found it) Mayhew published a post where he argues that fans should not buy bargain price books because an author’s royalties are slashed as the price drops.

So how does it all work? Authors get paid royalties, which are a percentage of the book price which you may (or may not) earn from books sales, usually around 5-10% of the price, but very often less; most books are discounted in any case, and the royalty shrinks accordingly. In simple terms, you would expect to get between 50p and £1 for each hardback book sold (and less on a paperback). This is completely normal, and I have no complaints, although it’s often a shock to people.

What happens when books get discounted further? Subject to contractual terms, the royalty may shrink on cheaper books. So you end up getting a tiny % of an even smaller amount. We are talking pennies. Once upon a time there was a system called the Net Book Agreement, limiting the extent to which books could be discounted. But that was abandoned in favour of a “free market” years ago. The result? books can be reduced to next to nothing.

But increasingly, publishers broker cold, hard, cynical deals with these people and then print to order. The publisher is complicit in the arrangement and sells books at extremely low prices (less than 50p per book) to the discount catalogue (but not at a loss to themselves) who then sell them on at a very nice profit – usually £1 per book. Tens of thousands of copies. And the author? I get less than 4p a book, while the discount company makes millions every year. …

. . . .

Authors and publishers might see things differently, but what I see here is an author who is trying to guilt readers over the price they pay for books.

That is a pretty obnoxious behavior, but it gets worse when we look at it sideways. That’s when we realize that the real issue here is not the price of the books but the contract terms Mayhew agreed to. He’s trying to make readers responsible for his, and other authors’, bad business decisions.

Link to the rest at The Digital Reader

That’s just the strategy for attracting more book buyers – make them feel guilty for doing so when books are discounted.

PG suggests that when indie authors are talking to readers, in addition to thanking them for buying the author’s books, it might be a good idea to let the readers know that when they buy indie ebooks on Amazon, in many cases, most of the money goes directly to the author. That’s why Amazon is such a great friend to authors and readers.

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Les Misérables: gloomy French writers face crisis as incomes plummet

22 March 2016

From The Guardian:

French writers have never felt more badly paid, undervalued or under pressure, according to a new survey that shows more than half of established authors earn less than the minimum wage.

Many are so depressed by the state of the book industry that they are considering giving up altogether, according to a new report that canvassed more than 100,000 authors of fiction and non-fiction.

“Authors have a high social status but almost empty bank accounts,” said Marie Sellier, president of the SDGL, one of the five writers’ and publishing groups behind the study.

. . . .

Established writers with years of relative success behind them struggled to make a living, with their median annual earnings of €17,600 ($19,800), less than three-quarters of national average.

The most staggering statistic of all in the report, which was backed by the ministry of culture, is that six out of 10 published writers make less than €1,500 a year.

. . . .

The survey of writers as well as poets, illustrators and translators found they were they “generally worried, disenchanted and discouraged”.

“Many were asking themselves whether they should diversify into other work or stop altogether,” it concluded.

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

PG was reminded that France is the home of  the Lang Law (named after a long-departed Minister of Culture). In a nutshell, under the Lang Law:

  • The publisher decides on a price for its book and prints it on the back
  • Booksellers are not allowed to sell a book for a discount of more than 5% below the publisher’s price.

Sounds like this law may be fine for publishers and bookstores, but not so much for authors.

Publishers should pay authors as much as their other employees

14 February 2016

From The Guardian:

Writers and publishers are in it together, I tend to feel. Not always in a cuddly way. Sometimes more in a screaming-down-the-mineshaft way. But in one critical respect the partnership feels increasingly strained.

. . . .

The Society called for publishers not to hold on to rights that they don’t actively exploit, not to add crippling restrictions on writers’ other work and to stop insisting that authors contractually indemnify them against all risks. It also wants ebook royalties to rise from 25% to 50%, to fairly reflect the lower cost and risk of digital publication.

No writer has a right to be published. If you’re an avant garde poet, good luck to you – you’ll need it. The issue is when the publisher makes money out of a book and the author doesn’t; when contracts exploit the desperate asymmetry of the parties’ negotiating strength.

. . . .

Responding to the Society’s campaign, the then chief executive of the Publishers Association, Richard Mollet, wrote that “publishers share the frustration of the author community” that it is increasingly difficult “to make a decent living” from writing.

“Decent” is a dream. Authors are traded according to perceived value, so few ever admit publicly how little they actually earn. But a 2014 survey by the Authors Licensing and Collecting Society found that professional full-time authors typically earned £11,000 – a median down 29% on 2005. Of course, a few writers make fortunes. But talk privately to authors – including well-known, much-loved and “bestselling” authors – and you’ll find many in financial distress and professional despair.

Richard Mollet felt the source of the problem lay not in “contractual relations” but in “deeper market factors”. Margins are indeed “being squeezed across the whole supply chain” – yet publishers’ profits have not, on the whole, tumbled by 29%. As for “there simply being more writers”, as he also claimed, quality has always been hard to find, even in a buyers’ market.

. . . .

Publishers pay printers. They pay rent – often for staggeringly high-value London commercial properties, despite those squeezed margins. And they pay salaries.

Rates for lower-ranking editorial staff are shocking. £16,000 for a graduate? In London? And yes, unpaid and low paid internships are rife, despite the damage they do to diversity. (A recent survey by the Society of Young Publishers found that 38% of respondents got their first job through internships – half of them unpaid.) But even the lowliest shuffler of proofs gets more than £11,000 a year.

. . . .

So when a publisher tells you he “shares your frustration”, ask him how much he earns – and quite how little he’d pay his lowest paid editorial assistant before he felt he was exploiting the vulnerability of their position. Before he felt he was endangering the long term sustainability of his business.

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

PAY THE WRITER—Pirates, Used Bookstores & Why Writers Need to Stand Up for What’s Right

31 December 2015

From Kristen Lamb’s Blog:

All righty. I’d vowed to take off for the holidays but *laughs hysterically* sure. Like THAT was going to happen. No, seriously, I’m working on resting more. I’m also working on learning to shut up. Clearly those two goals are getting re-slated for 2016 resolutions because the whole “Inside words stay inside…”

Not working out for me. So why not leave 2015 with a bang? Haters gonna hate.

To quote the great Tywin Lannister, Lions do not concern themselves with the opinions of sheep.

Today I’m going to say something that could quite possibly be grossly unpopular, but whatever. It’s for your own good. I’m feeding y’all broccoli to offset all that fudge and alcohol you’ve consumed during the holidays.

There’s a trend that just makes me see red and I’m calling it out today because if we do not address this 500 pound used paper elephant in the room, then it’s going to be really, really hard for you guys to reach your dreams, which I assume is to work as a full-time PAID writer.

For those of you who do NOT want to be PAID to write? The following does not apply. If you are content to work a full-time regular job AND slave over a manuscript as a second job and your ONLY reward is simply nice reviews, compliments, hugs, cuddles, and the joy your stories might create in the hearts of others?

I am NOT talking to you.

. . . .

Yesterday, I was on Facebook and it would have been one thing to see one writer post this link. But I saw like TEN writers post this link and they were excited…as if this Washington Post article were announcing a GOOD thing for our profession.

In an Age of Amazon, Used Bookstores Making an Unlikely Comeback.

Here’s the deal. I don’t care about bookstores. I care about writers. In fact, readers should care about writers more than bookstores because no writers? Well no real point in bookstores now is there?

Want to support the arts? Pay artists. Want to support books? Pay writers. It is simple.

. . . .

Often, we blog for free (though if you do it the way I teach you actually DO get a return on that investment). Once we are published? We do interviews and guest posts for…FREE.

So please. Do not expect to ALSO get our books for free. We are frankly DONE with free.

How can a writer get PAID?

. . . .

So happy you asked.

Digital pays writers the best. Then print copies. NEW ones. Buy on-line or in a bookstore or at an event in person. We writers get a royalty. Depending on the contract, writers can even get paid if a book is checked out of a library. That library PAID for the book and the writer was then, in turn, paid a royalty.

Upon so many times checked out? The writer is then PAID again for a new “copy” of the book.

Want to support a writer in the new year? BUY BOOKS.

Writers are NOT PAID for the purchase of used copies. So while I LOVE used bookstores I want to make a point here. Writers MAKE NO MONEY.

. . . .

To be clear, I do not mind used bookstores. What I mind is the attitude that somehow digital is bad and Amazon is bad whereas “paper” and used bookstores are “cultural” and therefore GOOD and preferable for writers.

. . . .

Want to support civilization? Buy old books. Want to support a writer and his/her family and career? Buy new ones or e-books.

Encourage and educate readers to do the same. Because here is the deal. If we writers go around cheering how AWESOME used bookstores are? How the heck are readers going to know they are benevolently gutting our careers?

They (readers) see us posting the links. They ASSUME we are benefitting. They have no idea how we get paid. Why not direct them to places where we might make money?

Link to the rest at Kristen Lamb’s Blog and thanks to Scath for the tip.

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

A children’s tale that will have adults moved to tears too

13 December 2015

From The Daily Mail:

Somehow it seems both entirely fitting and slightly surreal that I’m sitting with Julia Donaldson and Axel Scheffler discussing how knowledgeable Father Christmas is.

Julia is the slightly eccentric former busker who’s become the fourth biggest-selling writer in British history – despite only publishing her first book when she was 45 – and the first author to record UK sales of more than £10 million for five consecutive years, while Axel is the illustrator who brings her stories to life.

. . . .

 Although the book is aimed at a pre-school audience, parents seem to adore it too. She doesn’t bat an eyelid when I tell her Stick Man’s happy ending is so touching it used to make me weep when I read it to my children.

. . . .

 Like so much of Julia and Axel’s work, Stick Man came about by accident. It was pure chance that Julia started writing books in the first place – she was working as a songwriter when a publisher asked if she could turn her song A Squash And A Squeeze into a book. Axel was the third illustrator she approached, which in itself turned out to be a happy accident for him.

. . . .

 ‘I can’t make the figures tally,’ she says. ‘Axel and I get about three per cent each per book – probably less once you count the foreign sales or the books that are sold at a discount. But even then I still can’t work the figures out. I certainly don’t receive as much as you might think. I’m not complaining but I imagine people think we’re billionaires; that’s certainly not the case.’

Link to the rest at Daily Mail and thanks to Mike for the tip.

PG is moved to tears by these royalty payments.

End the Discount Double-Cross

16 November 2015

From The Authors Guild:

In our last installment of the Fair Contract Initiative, we detailed how publishers’ outdated accounting practices consistently delay and minimize authors’ royalty payments. But that’s not the end of the story. In another common practice, publishers routinely use contract provisions to slash authors’ royalties to mere pennies per copy sold.

Standard trade royalties are based on a percentage of the publisher’s list price. But publishers have come up with a variety of clever methods to base royalties on the much lower net amounts they actually receive from booksellers and wholesalers. Then they add insult to injury by cutting the royalty rate itself by as much as two-thirds. When an author gets paid on less than half the list price, that’s bad enough. When an author gets paid only one-third the normal rate on that reduced price, the word “pittance” seems appropriate.

So-called “deep discount” clauses let publishers offer titles to booksellers and wholesalers at big markdowns. They stipulate that a publisher’s sale at a discount of over 55%, for example (a number that appears to be the new standard), the author’s royalty suddenly drops from, say, 15% of list price to 15% of the far smaller amount the publisher actually receives. A standard deep discount clause looks something like this: “On copies of the Work sold by the Publisher at a discount of greater than 55% from the publisher’s retail price through channels outside of ordinary retail trade channels, the author will be paid a royalty of 15% of the Publisher’s net proceeds.” (Many smaller publishers, which pay royalties on net proceeds to begin with, often slash the royalty rate in half on discounts from 50–70%, and by 2/3 for greater discounts.) Thanks to that drop in royalty payments the publisher makes out like a—well, the word “bandit” springs to mind.

It seems fair that when a publisher sells a book at a deep discount, the author’s take might be reduced proportionally. But there’s no proportionality in many standard “deep discount” clauses.

. . . .

We’ve seen these discount double-crosses applied for sales to book clubs and book fairs, for “special sales” in bulk outside the usual book trade, for large-print editions, for export editions. Let’s say the publisher sells our sample book in bulk for just $2.00. The discount double-crossed author would get one thin dime per copy, a royalty cut of an astounding 93%—even though the net to the publisher would decline by less than 33%.

. . . .

Even crazier, some reductions can apply even to direct sales from publishers to readers, despite the fact that the publisher gets to keep the share of the transaction that would normally go to a retailer or wholesaler. If anything, an author’s royalty rate on such direct sales should be higher than normal.

. . . .

The documented decline in authors’ incomes stems in part from these unconscionable reductions in royalty payments. Unless publishers begin to see authors as partners rather than patsies, many authors will no longer be able to afford to deliver publishers the quality work the industry was built on.

Link to the rest at The Authors Guild and thanks to Jacqueline for the tip.

PG says some authors get excited when they see their books in Costco. Unfortunately, it’s almost certain that their Costco sales will fall under the deep discount royalty structure, generating only tiny royalties.

Then, there are publishers who sell virtually everything at “deep discount” so the author never receives the royalty rates that are listed first and most prominently in their publishing contract.

PG has mentioned this before, but perhaps it bears repeating. During PG’s legal career, he has helped clients with a wide range of business contracts, including agreements prepared by many of the largest and most successful companies in the world.

Standard publishing contracts from large traditional publishers stand out in the constellation of business contracts for their one-sidedness and, in some cases, outright duplicity for anyone who fails to read them very carefully. The way that Randy Penguin and its cohorts write their standard contracts is not the way that Apple, Microsoft, Morgan Stanley, Bank of America, Disney, Intel, Hewlett-Packard, American Express, Merrill Lynch and similar entities write their contracts.

PG doesn’t agree with many initiatives undertaken by the Authors Guild, but he’s pleased to see their latest efforts to shine a light on some of the most abusive contract provisions routinely employed by Big Publishing.

However, the cynic in PG holds little hope that AG’s efforts will bring about any meaningful reform. Treating authors badly is too much a part of the corporate and cultural DNA of traditional publishing to change. These dinosaurs will die before they evolve.

PLR rate to increase by 1p next year

11 November 2015

From The Bookseller:

The British Library Board has proposed an increase in Public Lending Right (PLR) payment made to authors next year, following a decrease in the estimated number of book loans.

The board has recommended the PLR rate should increase from 6.66 pence to 7.67 pence per loan in 2016, a rise of 1.01p, which the department for culture, media and sport (DCMS) intends to accept.

Following the proposal, the Society of Authors c.e.o Nicola Solomon has written to Dominic Lake, deputy director of arts, libraries and cultural property at the DCMS, urging the government to ring-fence the PLR fund and “protect and maintain the library service which is under serious threat.”

Lake said: “The proposed increase has been possible in part due to efficiency savings and increased income, and in part as a result of a reduction in the estimated number of loans of books registered for PLR. The DCMS notes the British Library Board’s recommendation that the 2016 payments are made at an increased rate per loan of 7.67 pence and propose to amend the PLR Scheme accordingly.”

. . . .

“PLR continues to be an important source of earnings for authors and we would urge the government to ring-fence the (already meagre) PLR Fund in any future spending review,” Solomon said. “We are sad to note the decrease in the estimate loans of books registered for PLR, caused, no doubt, by the cuts in library services and the exclusion of some volunteer-run libraries from the scheme. We urge the government to include volunteer-run libraries within the PLR scheme so that true figures for library lending can be recorded and remunerated.”

She went on to say: “We understand that the government is considering plans to bring in PLR payments for remote e-lending. Libraries now remotely lend a significant number of e-books and it is only fair that authors should be remunerated for these. Publishers have been reluctant to ensure that authors receive a fair share of licensing revenues for remote lending. We believe that an author’s receipts from e-book lending should equate to the total earnings the author would have received on a physical copy over the lifetime of the book from the combination of royalties on sale and PLR on every loan. The same considerations apply to the remote lending of digital audiobooks.”

The PLR payment is made to authors by the government each time their books are loaned through the public library system. The amount due to each author is based on a rate per loan, calculated on the basis of the size of the fund available and an estimate of the total number of loans of their registered works, obtained by way of a sample of public libraries in the UK.

Link to the rest at The Bookseller

America’s Most Surprising Six-Figure Jobs

17 October 2015

From Forbes:

Think all of the country’s six-figure salary professionals are confined to corner offices? Think again.

Each year, Forbes examines data from the Bureau of Labor Statistics (BLS) to find some of the country’s most surprising six-figure jobs, using data from the Occupational Employment and Wage Estimates released annually for more than 800 occupations, refined by geography and industry.

. . . .

Highly-trained stargazers–those who “observe, research, and interpret astronomical phenomena to increase basic knowledge or apply such information to practical problems”–can earn as much as $162,630, with California paying the most for analysis of its skies. As a group, the more than 1,600 astronomers in the U.S. earn a mean annual salary of $107,140.

. . . .

Some writers and authors–even those without a bestseller to their name, as yet–also bring in annual earnings that might raise a few eyebrows. The mean annual salary for preparing “scripts, stories, advertisements, and other material” is $67,870 with the top 10% earning an average $114,820, annually.

Link to the rest at Forbes and thanks to Meryl for the tip.

Should You Go Wide or Join KDP Select/Kindle Unlimited?

6 October 2015

From Lindsay Buroker:

When I uploaded my first book, The Emperor’s Edge, in December of 2010, it was a foregone conclusion that I would put it out there everywhere I could, in the hope that new readers would stumble across it and give it a try. Then, a couple of years later, Amazon introduced KDP Select, a program for self-publishers that requires exclusivity.

Right off the bat, Amazon introduced a couple of promotional tactics that are still available to those who are enrolled. Eventually, Kindle Unlimited and the ability to be paid for borrows also came along.

. . . .

So, what do you lose? Obviously, if you’re exclusive with Amazon, you can’t receive ebook income from the other stores. Let me emphasize that we’re only talking about ebook income, as you can still have audiobooks in iTunes and paperbacks in Barnes & Noble and elsewhere. But, as you probably already know, ebook income is huge for self-published authors. Even though I’m working on getting more audiobooks out there, and I’ve done paperbacks for most of my novels, ebooks easily account for 95% of my income.

. . . .

Before I go further, I should disclose that I am not in KDP Select with any of the books under my name, but that my pen name is currently “all in” with KDP Select. I started the pen name books there, to take advantage of the sales ranking/visibility boost from Kindle Unlimited, and I returned them to KDP Select this August, after not gaining much headway in the other stores and after Amazon switched to Kindle Unlimited 2.0, a system that rewards novelists by paying based on total pages read.

For my LB books, I’ve been around longer, and my books do sell on the other platforms, especially on Barnes & Noble (Kobo has been coming on strong these last few months too). I also make some sales on iTunes and Smashwords, and through Smashwords, I make a nominal amount at Overdrive, Oyster, and Scribd.

. . . .

Still, even with all that, Amazon always seems to make up about 85-90% of my ebook income. In my case, if things are going well elsewhere, they’re going even better at Amazon.

There have been times that I’ve considered trying KDP Select with a couple of my series, to see how much it would affect sales and if I would make more overall with the borrows added in. But after almost five years of publishing widely, I’ve gained some loyal readers from those other platforms. It’s uncomfortable enough when I have to explain that my pen name books are only available on Amazon!

I also, from a moral and business standpoint, don’t like the idea of being exclusive with Amazon and relying wholly on one vendor for my income. I’m quite tickled to have reached the point, in the last year or two, where my non-Amazon income has grown to enough that I could still make a living at this if Amazon disappeared. (Of course, I hope it won’t!)

But I understand why some authors choose exclusivity and KDP Select. With 3-4 books out wide in all of the stores, my pen name made a little shy of $1,000 on platforms other than Amazon between January 2015 and July 2015 (that’s total, not per month).

. . . .

When KU changed to KU2.0 this summer, I decided to put all of the pen name books back into KDP Select. I’d probably recommend almost anyone doing a pen name start out this way, not only because it takes more effort to gain traction on the other stores but also because, if you’re publishing frequently, it’s more work to upload everywhere and keep the back matter updated.

Link to the rest at Lindsay Buroker and thanks to Stephen for the tip.

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

Miss Congeniality: South African Fiction

4 October 2015

From Calling Through the Fog:

Authors’ incomes collapse to ‘abject’ levels.

That’s what the headline on The Guardian said, and I was frantic to know more. Which authors? Was it me? Were my annual royalty cheques of R250 about to plunge to R50? Less?

Usually I read like a millenial, which is to say I base my world view on the first three words of headlines from Buzzfeed articles on Twitter. But this time I read on.

Many professional authors in the United Kingdom, I discovered, were seeing their royalties plunge. Some who had earned their living from writing books were facing the prospect of – dear reader, are you sitting down? – not being able to write fiction as a full-time occupation.

. . . .

Mal Peet, a celebrated writer of novels for children, told The Guardian that his direct income from sales had become “literally abject”. His royalty cheque for the last months of 2013, which included all his books in print, was £3 000.

That might sound like quite a lot to a South African writer, but of course Peet doesn’t live in South Africa, and for a UK resident, twice-yearly cheques of £3 000 are basically enough for a bus ticket down to Lidl and a packet of Jaffa cakes.

Still, for South African writers the alarmed cries of authors in the UK might have a slightly comical ring to them. I mean, 6 000 abject pounds a year can’t keep a Briton in Marmite but that’s still about R115 000 a year, and for most South African fiction writers that’s the stuff of pure fantasy.

. . . .

But then your publisher explains that it’s not 12% of the cover price of the book. It’s 12% of what the publisher gets, which is the price of the book minus VAT minus bookshops’ 40%-ish cut.

So if your novel costs R150 you’re looking at getting about R10 per copy.

No problem, right? You only have to sell 100 000 copies to make a million bucks, and your mom has already bought six, so that’s only another 99 994 to go. And so you scamper down to Exclusives Books and find your novel, lovingly shelved under Non-Fiction or Mind/Body/Spirit or Wildlife, and you notice that they’ve sold two copies since the last time you were there. Which is actually pretty good seeing as the last he last time you were there was three hours ago, compulsively counting the number of copies of your book on the shelf.

. . . .

But as weeks become months, and you start seeing your book in second-hand shops, marked down from R100 to R70 to R40 to Shem to Bwahahahaha, you realize that your publisher’s initial print run of 2,000 copies wasn’t a defeatist lowball estimate to knock your self-confidence. You’ve sold a thousand and change. And that’s that.

. . . .

The bottom line is that the vast majority of South African novels written in English sell between 700 and 1,500 copies. Their quality doesn’t really seem to be a factor. Some novels that are basically typed poo sell quite respectably. I know one literary prize-winning novel that didn’t crack 900.

So.

Your novel sells 1 000 copies. You get R10 per copy. Over the entire lifetime of your book (a year or three) you’ll make R10 000. Before tax. That’s about £600.

Link to the rest at Calling Through the Fog and thanks to Jules for the tip.

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