Royalties

The New Landscape

12 December 2014

From author Russell Blake:

I just looked at the Amazon top 100. #1 is a trad pub title at $2.99. #2 is a trad pub title at .99. #3 is an Amazon imprint pre-order at $4.99. #4 is Baldacci’s latest at $10.99, #5 is Michael Connolly’s latest at $3.99, #6 is Gone Girl at $2.99, and on and on and on.

For those indie authors who have seen a marked downturn in sales since KU came in, I believe that’s only part of the story. The other is that since Amazon got lower prices from trad publishers, the price of trad pubbed books is through the floor.

Which means that the tried and true gambit most indies have been using, which is selling based on price, at .99 or $2.99 or $3.99 or $4.99, likely won’t work particularly well anymore. Because when you can buy Gone Girl for $2.99 and Connolly’s latest at $3.99, why would most readers buy your book at or around the same price?

. . . .

Readers are now being presented with a host of worthy, readable, high-quality offerings at or below the same prices indies offered their books at, eliminating the bargain perception/edge that indies learned to rely on as a differentiator.

That will translate into crap sales for many, and the effective end to many careers that relied on their work being attractive because it was cheap. In a world where everything is cheap, selling based on price doesn’t work.

Bluntly, if you as an author want to sell books in this environment, you have to do it the old fashioned way: you have to write books your audience will gladly pay for, even if a dollar or two more than the latest Michael Connolly, or Gillian Flynn’s blockbuster. That means you need to up your game, that suddenly story and craft will matter more, and that simply being cheap, with a homemade cover and lackadaisical or no editing, won’t cut it.

That’s awesome news for readers. It’s disastrous news for many indie authors.

. . . .

Now for the good news. As my prior blog discussed, more authors than ever before are earning good money as indies. So it can be done. But those authors are very, very good at delivering a reading experience their following will pay for, and they value their readers above all – they don’t put out slop, they don’t think in terms of “good enough,” and they’re every bit as demanding of their work as the harshest acquisitions editor.

Link to the rest at Russell Blake

Here’s a link to Russell Blake’s books

For those unfamiliar with him, most of Russell’s books are self-published and he writes 7-10,000 words per day.

Russell points out in a part of his post that PG didn’t excerpt that, under the deep-discount clauses present in almost all tradpub contracts, the royalties authors receive from heavily-discounted tradpub books are much, much lower than the already-low ebook royalties tradpub pays for list price ebooks.

Thus, ranking high on Amazon’s bestseller lists at $2.99 doesn’t mean nearly as much money to a tradpubbed author as it does to an indie author.

Kindle Needs A “Subscribe To Author” Button

6 December 2014

From TechCrunch:

When Amazon launched the Kindle Unlimited service last July, the idea was that popular indie authors could use the service as a way to gather royalties and raise their author profiles in tandem. The all-you-can-eat reading service was supposed to help, not harm, authors.

The opposite has been the case. After the launch of KU a number of prolific writers have seen sales drop precipitously. The Digital Reader found a number of examples including writer H.M. Ward whose sales fell by 70 percent. She wrote:

Ok, some of you already know, but I had my serials in it for 60 days and lost approx 75% of my income.Thats counting borrows and bonuses. My sales dropped like a stone. The number of borrows was higher than sales. They didn’t compliment each other, as expected.Taking a huge ass pay cut while I’m still working my butt off, well that’s not ok. And KU effected my whole list, not just KU titles. At the time of enrollment I had about 60 titles total.I planned on giving it 90 days, but I have a kid in the hospital for long term care and I noticed my spending was going to exceed my income-by a lot. I couldn’t wait and watch thing plummet further. I pulled my books. That was on Nov 1, & since then my net revenue has gone up. I’m now at 50% of where I was pre-KU. During the time I was in KU, I had 2 new releases. Neither preformed vastly different than before. They actually earned far less (including borrows).

But Ward added an interesting aside near the end of her post: she would love to offer her readers a paid subscription to her work.

Ward, with 60 pieces in the Kindle store, is a rare case of a writer who is making a living from her writing through sheer volume. Most writers have one book in them at best but, as most Kindle experts note, the best way to make money is to write, publish, and repeat – ad infinitum.

 By allowing users to subscribe to writers like Ward they will be doing everyone a solid. Ward and other writers will get a steady stream of income, readers will get the work of their favorite authors automatically, and Amazon has a captive source of revenue. Patreon, created by Jack Conte, is a perfect example of this dynamic. That service allows fans to pay a small amount every time an author creates a piece of content, be it a song, a blog post, or a podcast. By ensuring that the creator is paid the consumer ensures the content keeps coming.

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

KU Crushed My Sales

29 November 2014

From author H.M. Ward via Kboards:

Ok, some of you already know, but I had my serials in it for 60 days and lost approx 75% of my income. Thats counting borrows and bonuses. My sales dropped like a stone. The number of borrows was higher than sales. They didn’t compliment each other, as expected.

. . . .

And KU effected my whole list, not just KU titles.  At the time of enrollment I had about 60 titles total.

I planned on giving it 90 days, but I have a kid in the hospital for long term care and I noticed my spending was going to exceed my income-by a lot. I couldn’t wait and watch thing plummet further. I pulled my books. That was on Nov 1, & since then my net revenue has gone up. I’m now at 50% of where I was pre-KU. During the time I was in KU, I had 2 new releases. Neither preformed vastly different than before. They actually earned far less (including borrows).

This model needs to be changed for it to work. Authors shouldn’t be paid lottery style. For this system to work we need a flat rate for borrows, borrowed or not borrowed (not this 10% crap), and it needs to be win win for the reader AND the writer. <– That is the crux of the matter.

Id like to see Amazon create something new, something better instead of falling in step with Scribd and Oyster.

Link to the rest at Kboards and thanks to Dan for the tip.

Here’s a link to H.M. Ward’s books

Royalties, Oh Royalties, Wherefore Art My Royalties?

24 November 2014

From author Dan Meadows via The Watershed Chronicle:

“It is our hope that Hachette, in light of the loyalty its authors have shown throughout this debacle, takes this opportunity to revisit its standard e-book royalty rate of 25 percent of the publisher’s net profits.” Roxana Robinson, president of the Authors Guild

So here we are. Hachette has a deal. Simon & Schuster has a deal. They have the pricing responsibility they wanted. Amazon has its “specific financial incentives” to compel them to use that power to price lower. Now we’ll get to see just how badly publishers want to institute a price-based windowing system for new releases (I’m setting the over/under on new release ebook prices at $16.99. And I’m taking the over.) But what did writers get out of this? I’m glad you (rhetorically) asked, because nobody else seems to be.

I’ve read all the coverage I can find and, as far as I can tell, the sum total of what writers got from this is that Hachette writers will have preorders reinstated and be back on two-day shipping. That’s about it. Oh yeah, there’s all the sales they lost during the past seven months. They’ve got that, too. There’s no Macmillan-like pool of recompense for those folks; no extra royalty payout for the damage done to their business. And they’ve got the hit yet to come from all those lost sales when their next contract rolls around. But at least, like the Robinson quote above, they’ve got hope that possibly Hachette (and others) maybe might take some time to reconsider their ebook royalty rates, if it’s not too much trouble. Because loyalty. My dog is loyal, but if I screw with his food, he bares his teeth and growls. I don’t screw with his food. Loyalty unrespected is subservience.

The blatantly obvious here is that anyone who thought writers would get anything but screwed on this was deluded. Especially after their authors interjected themselves into it in, bluntly, the stupidest possible way. They threw all their weight behind one side, not coincidentally, the side that needed them and they had leverage with, and asked nothing in return. Now we’re told they did it out of loyalty as if that’s some kind of honorable thing and not horribly misplaced naivete. Now we’re told authors are going to try to get better terms.

. . . .

If you can’t even consider paying me a fair (or even just slightly higher) ebook royalty without it triggering fears of going under, does that make you more or less attractive to me as an author? You’re leveraged so thinly that fair recompense to writers can threaten the very existence of your company? What’s the upside for me to sign with you? A “quality” product no one buys or a product they do buy but I don’t reap fair reward for?

. . . .

“Questioned on author earnings, CEO Tom Weldon said that Penguin/Random House was always looking at how much authors were being compensated, but for the moment the 25% digital royalty rate would not be changed.

“Authors are, alongside readers, the foundation of our business,” he said. “We are always, always looking at our commercial arrangements with authors to make sure they’re fair and equitable. With e-book royalties, firstly and most importantly, the business model is as clear as mud. Rather than arguing about what slice of the cake we should distribute, we need to work out how big the cake should be.”

There you go, fair and equitable and the rate would not be changed. Get a load of that last sentence. We need to work out how big the cake should be? What the hell does that even mean? Is he talking about pricing? Is it a more ominous suggestion of further attempts at limiting the ebook market itself to a certain market share? Or even more ominously, is he talking not about how big the whole cake is but deciding how big the portion of the cake is that your portion comes from? The cake is a pretty big one, dude, I think portions are an appropriate topic of discussion at the moment. Look at how he phrased that, too: “Rather than arguing about what slice of the cake we should distribute…” They’re planning on keeping the whole damn cake and then deciding what tiny sliver they can afford to slice off for you. Do you need any more evidence that they see the proceeds from your book as “their cake”? Funny how they’re not waiting to work out how big the cake should be before touting the increased profits they’re reaping from this particular literary confection. But let’s not argue about it. Then they might actually have to address the issue rather than keep enjoying all that delicious extra cake they’ve got. Did you catch him wiping the crumbs from the corner of his mouth as he said “fair and equitable”?

Link to the rest at The Watershed Chronicle

Here’s a link to Dan Meadow’s books

The Authors Guild: Do More Than Hope

16 November 2014

From Joe Konrath:

From Authors Guild Prez Roxana Robinson:

“In the meantime, it’s our hope that Hachette—in light of the loyalty its authors have shown throughout this debacle—takes this opportunity to revisit its standard e-book royalty rate of 25% of the publisher’s net profits.”

The Authors Guild has, many times in the past, voiced that ebook royalties should be raised.

So do something about it.

The AG, and Authors United, have been able to get beaucoup media attention during the Hachette/Amazon spat. They were squarely on the side of Hachette (even while proclaiming they weren’t taking sides) and they waged a war for public opinion that did a decent propagandist job of demonizing Amazon.

Now the AG, and all of the bestselling authors who supported AU, need to show some backbone and integrity and use the same tactics to force the Big 5 to raise digital royalties.

Robinson is correct that many authors remained loyal to their publishers. And it makes sense that the loyalty should be rewarded. When a dog does a trick, it gets a treat.

Perhaps the treat will come, and Hachette, after suffering an 18% sales decline during the negotiations, will decide to give away even more profits by raising royalties.

. . . .

If not, the AG and AU should wage a similar public campaign to the one they did against Amazon, and make the world aware that authors earning 1/3 of the digital royalties that publishers earn is lopsided, unfair, and will no lnger be tolerated.

Back in the day before they were called ebooks, and digital rights began to get mentioned in contracts, the Big 6 almost unilaterally came to the conclusion that 25% author royalties were fair.

Where was the AG and the AAR to push back? Not only were digital costs lower–no cost for production or distribution–but the distributor was essentially removed from the money chain. Rather than share this extra money with authors, publishers simply grabbed it.

I’ve done the math in the past. On a $25 hardcover, the author makes about $3.75, and the publisher around $5, after all production, delivery, and middleman costs (distributors and booksellers).

On a $25 ebook, an author makes $4.37, and the publisher $13.12.

Link to the rest at JA Konrath and thanks to SFR for the tip.

Here’s a link to Joe Konrath’s books

As Amazon-Hachette Dispute Ends, Authors Want More

14 November 2014

From Bloomberg via Yahoo Finance:

Now that the dispute between Amazon.com Inc. (AMZN) and Hachette Book Group has ended, the next disagreement may pit authors against publishers over how to share e-book revenue.

Writers who stood by Hachette through the Amazon negotiations over print and digital book sales want to be rewarded for sticking by the publisher. Now they’re asking Hachette to share more of the money it receives on e-book sales with them.

. . . .

At stake is revenue from sales of digital books. Under the current structure, an e-book sold by Amazon for $9 brings in about $2.70 for the Web retailer and $6.30 for the publisher and writer. A smaller fraction of that — about $1.58 — then goes to the author. The writers contend that their share should be greater, because there’s no manufacturing or distribution cost associated with digital books.

“It is our hope that Hachette, in light of the loyalty its authors have shown throughout this debacle, takes this opportunity to revisit its standard e-book royalty rate of 25 percent of the publisher’s net profits,” Roxana Robinson, president of the Authors Guild, said in a statement following today’s announcement of a resolution between New York-based Hachette and Amazon.

. . . .

“There’s definitely a feeling that the amount going to authors should be higher,” said Steven Gould, an author and president of the Science Fiction and Fantasy Writers of America.

Link to the rest at Yahoo Finance and thanks to Chris for the tip.

PG says Whoopee!

Signing a Publishing Contract

11 October 2014

What to Do Before Signing a Publishing Contract

Column by Brandon Tietz at LitReactor

Writing a novel is damn hard. Selling one to a publisher, in its own distinct way, is even more difficult because you’re essentially convincing a company to gamble on you and your work. This is part of the reason self-publishing is booming right now. Searching for a publisher is both a hassle and a blizzard of heartbreaking rejection, so when you actually do get an offer, it’s a huge moment. So euphoric that emotion can often blind the writer to those important details on what’s on the actual contract. It amazes me how many authors took their time working on their novels only to sign a contract after skimming it once. It’s not an iTunes update, guys…read the damn thing. Here are some key things you should know before signing on the dotted line.

Who Are These People?

I will go on record and say that I have scared away authors from a publisher I went through because it was a sub-par experience. They’re out of business now, if that tells you anything. What I’m saying though is that you should know the publisher before you sign any sort of contract that binds you to them. Now I don’t recommend asking authors whether they do or don’t like the publisher while you’re querying, but after you get the offer, feel free to reach out and get a feel for how they’re handling their business. Unhappy authors are usually a good indicator that you should tread lightly.

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Conclusion

Don’t be blinded by your contract. Signing a bad one can be the thing that ends up screwing you over for the life of the novel. Do your research, ask questions, and for the love of God, don’t be afraid to ask for changes if you don’t like something. If three author copies sound low—ask for more. If you don’t want your book assigned to a certain designer—ask for an alternative. A contract is an agreement between two parties…not one party telling the other how it’s going to be.

Read the rest here.

From guest blogger Randall

15,000 Harlequin Titles + Scribd = ?

6 October 2014

From Jane Litte at Dear Author

Harlequin has signed a deal to provide exclusive subscription access to 15,000 backlist titles to Scribd subscribers

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Monthly subscribers to Scribd can now find titles from a variety of Harlequin imprints:
• Harlequin Series Romance (including Harlequin Presents, Harlequin Desire, Harlequin Superromance, etc.)
• HQN Books
• MIRA
• Carina Press

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Scribd is offering a free 3-month subscription.

From Guest Blogger Randall with a thanks to Shelly for the tip.

See Shelly’s books here.

Randall can’t help but wonder what affect this will have on authors attempting to get their titles back from Harlequin.

Is Amazon responsible for the Ellora’s Cave fiasco?

3 October 2014

From Sal Robinson at Melville House

Ellora’s Cave, publisher of erotica, was for a long time a great success story of the electronic publishing age. Founded in 2000, they published stories and novels that contained material that was more explicit than mainstream romance publishers would touch. And because this was the pre-ebook age, they published them as PDFs, emailed to readers. Their audience turned out to be huge and undaunted by the format, and their revenues grew accordingly.

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Posts like the one by Kayelle Allen, founder of the site Marketing for Romance Writers, give a sense of what’s going to come out when these stories start being told: Allen published a novel with Ellora’s Cave in 2013 and was faced with, first, having to hassle the publisher just to get a royalty check (which, when it came, was for $17) and then a series of disturbing developments, like learning that her editor was being let go, that executives were leaving, and that many, many other Ellora’s Cave authors had also had problems with missing royalties.

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Each story adds to a larger picture of a company in dire straits. Which is weird. Because the perplexing thing about Ellora’s Cave (as Litte pointed out in her original post) is that as the ebook market has matured, the fortunes of the company — so good at ebook publishing they ruled it even before there were actual ebooks —have gone the opposite direction.
Growth stagnated. In 2010, it was revealed that EC’s revenues were $5 million but a reported $6.7 million in 2006. How on earth was a digital publisher’s income declining in the biggest boom period of digital books?

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Well, funny you asked. Because in a story that doesn’t appear to be about Amazon (and we only let ourselves write stories that aren’t about Amazon when swayed by a) dogs and b) Satan), this tracks back at least partly to everyone’s favorite purveyor of pet sweaters.
Earlier this year, Ellora’s Cave saw steep declines in their Amazon sales. Calvin Reid reported on it for Publishers Weekly:
[CEO Patty Marks] said Ellora’s Cave sales via Amazon have dropped by as much as 75%. “We’re talking to Amazon and trying to figure out why this is happening,” Marks explained, noting that Amazon is the biggest sales channel for the digital-first erotic-romance publisher.
According to Marks, the issue is likely related to a change in Amazon’s search algorithm. Many of Ellora’s Cave’s bestselling authors and titles simply don’t show up in the Amazon search engine anymore. She pointed to one of the house’s most popular authors, Laurann Dohner, whose books are New York Times bestellers, noting that a search for her titles on Amazon initially retrieves only free giveaways.

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Or it could be about money—discussions on romance messageboards describe the high prices of EC titles on Amazon, compared to buying the books through the company’s website, and it’s mentioned that Ellora’s Cave refused to give Amazon the discount they were asking for, which meant that prices were sometimes double on Amazon versus the EC site. Could Amazon have retaliated by making the Ellora’s Cave titles harder to find? Or was it a misjudgment of their strength on Ellora’s Cave side? A commenter on Litte’s post suggests the following explanation:

They’d been almost the only place that people could go to for that type of product for so long, that when competitors opened and started actually competing for authors and readers, and when Amazon became the third party seller powerhouse, it was like EC threw a tantrum, like, “No, *I* want to be the only one!” and packed up its toys and hoarded them, instead of trying to find a way to be part of this new way of selling books.

In any case, whether the house’s troubles are due to their own decisions or to outside factors, they’re a stark example of how much publishers are dependent on Amazon, and how much of the market it controls. When those sales disappear, all the abs and cowboy hats promised at Romanticon – EC’s annual conference, happening next week in Canton, Ohio – aren’t going to change the picture for authors.

Read the rest here.

From Guest Blogger Randall

Finally, a Big 5 publisher raises digital royalties

3 October 2014

From Laura Hazard Owen at GIGAOM

Digital royalties have been one of the major sticking points in the debate over traditional vs. self-publishing, with many people (even from the traditional publishing world) arguing that big publishers should raise digital royalties on ebooks to at least 50 percent. Nonetheless, until now, publishers’ standard royalty on new ebooks has been stuck at 25 percent.

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“While our first priority is to sell books through as many different retail channels as possible, we are pleased to provide this platform for our authors who want to sell directly,” Brian Murray, HarperCollins president and CEO, said in a statement. In a veiled reference to the ongoing dispute between Amazon and Hachette and/or foreshadowing of similar disputes between Amazon and HarperCollins, he said, “Our authors can also be certain that their books will always be available to consumers through HarperCollins, even if they are difficult to find or experiencing shipping delays elsewhere.”

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Nonetheless, it’s a step and it’s not difficult to imagine it expanding. Now let’s watch and see whether other big publishers do the same thing.

See the full article at GIGAOM

From Guest Blogger Randall

Speaking in the third person (as is tradition he thinks) Randall says 35% was still less than 70% last time he checked.

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