From Publishers Weekly:

The Borders bankruptcy is one issue that the book industry may have wanted to put behind it. But although there were less than six months between the mid-February 2011 filing for chapter 11 bankruptcy protection to the liquidation of the remaining stores, the bankruptcy is far from over.

. . . .

Despite the closure of hundreds of stores one and a half years ago, it’s still not clear how much publishers will be paid on the dollar even with Manhattan District Court Judge Martin Glenn’s approval last October of the BGI Creditors’ Liquidating Trust’s request to claw back payments made during the 90-day period before bankruptcy papers were filed.

. . . .

Top 20 Largest Unsecured Publishing Creditors & Amount of Claim

1. Penguin Putnam $41,118,914
2. Hachette Book Group $36,879,656
3. Simon & Schuster $33,757,445
4. Random House $33,461,062
5. HarperCollins $25,793,451
6. Macmillan/MPS $11,434,306
7. John Wiley & Sons $11,191,435
8. Perseus Distribution Services $7,776,292
9. Source Interlink Companies $6,879,906
10. F&W Media $4,546,275
11. Houghton Mifflin Harcourt $4,400,756
12. Workman Publishing $4,003,126
13. Diamond Comic Distributors $3,906,550
14. McGraw-Hill $3,093,871
15. Pearson Education $2,784,766
16. Rosetta Stone $2,226,553
17. National Book Network $1,956,713
18. W.W. Norton & Company $1,940,826
19. Zondervan $1,886,752
20. Hay House $1,886,752

Link to the rest at Publishers Weekly and thanks to Abel for the tip.

So here’s a question PG hasn’t seen discussed in any of the Borders bankruptcy stories he’s read – What’s happened to authors’ royalties?

If Penguin Putnam was owed over $40 million at the time the bankruptcy was filed, presumably most of that sum was for paper books that Borders had purchased from Penguin. $4-6 million of that amount would have been paid to authors if Penguin had received received such payment.

So, did Penguin, et al, pay the royalties to authors or not? Were these royalties (paid or unpaid) reflected on royalty reports in any way?

Off the top of his head, PG doesn’t remember seeing any provision in a Big Publishing publishing agreement that addresses what happens to royalties if a bookstore files for bankruptcy.

If print royalties are calculated based on the list price of a book, are they due to an author regardless of whether the bookstore pays for the book or not so long as the book has been sold by the publisher and not returned by Borders?

A royalty provision based on net revenue received by the publisher as is typical for ebooks would seem to let publishers off the hook for those unpaid royalties.

Some contract provisions describing royalty reports call for a statement of the “sales” of a hardcover or paperback Work without expressly requiring that a publisher actually be paid for those sales. If Borders didn’t return any books, a publisher probably couldn’t handle royalties accruing from unpaid book bills under a reserve for return clause.

Does anyone know if any of the publishers listed as creditors of Borders communicated with authors regarding the status of royalties for paper books sold to Borders?

Interesting questions.

From The Los Angeles Times:

F. Scott Fitzgerald made $16,666 — the equivalent of about $219,529.02 today — off the movie rights to ”The Great Gatsby,” according to a calculation by Marketplace. Baz Luhrmann’s “The Great Gatsby,” which is set to open nationwide May 10, had a production budget of about $104.5 million. An earlier version, starring Robert Redford, has grossed $20,563,273 since its release in 1974.

The figures, where Fitzgerald is concerned, come from a recently released digital version of his financial ledger at the University of South Carolina’s Ernest F. Hollings Special Collections Library. The ledger is a meticulous record of everything Fitzgerald earned from his writing between 1919, when he left the Army and moved to New York to begin his career, and 1936, when he went to work for the movies.

. . . .

Fitzgerald was that rare thing: An author who made a living through writing. According to the ledger, most of his income came from the short stories he published in magazines. In 1925, Fitzgerald earned just under $2,000 for “Gatsby” — about the same as he got for a story published in the Saturday Evening Post.

Link to the rest at The Los Angeles Times and thanks to Eric for the tip.

From E-Book Formatting Fairies:

We got to talking about how many authors are making a living on their writing now that they can self-publish and how many of them may not necessarily be “name” authors who everyone is familiar with. Hugh Howey, the acclaimed self-published author of Wool, wrote a great piece for Salon about how success stories like his are not THE STORY of self-publishing. According to Howey, the unknown authors who aren’t selling enough to be in the headlines but who are selling more than enough to support themselves are THE STORY of this revolution. And what a great story it is! Who cares about acclaim when you can quit your day job to follow your passion and make enough to pay the bills, too? A few years ago, such a concept was reserved for the top 1 or 2 percent of authors and was limited to pipe dreams and somedays for the rest of us. Now someday is here, and look at us go!

The conversation on the loop led to me post an informal survey to get an idea of how our members and their self-publishing friends are really doing. I didn’t ask people to give dollar amounts, but rather just their number of sales in 2010, 2011, 2012 and so far in 2013.

. . . .

Those who like to poo-poo the self-publishing revolution (often those who are most threatened by our success), love to offer quotes such as “The average self-published author sells about 57 copies of each book.” Really? Hmmm…. Then there are those who say it’s impossible to build a self-published platform unless you have been traditionally published in the past. If you believe that, I direct you to author Liliana Hart’s results below. She sold 441,069 in 2012 without ever having been traditionally published. It can be done. It’s BEING done all the time.

. . . .

Here are a few of my favorite quotes from authors who participated in the survey:

“I’ve been supporting myself solely through my self-publishing income since mid-2011.” —Catherine Gayle, author of Regency-set historical romance

“I’ve been traditionally published for four years and my income comes primarily from my self-published titles, NOT my traditionally published titles.” —Elisabeth Naughton, NYT and USA Today bestselling author of romantic suspense and paranormal romance

“Since self-publishing, I have paid more in federal income taxes than I made in 10 years of New York publishing 10 titles.” —Cheryl Bolen, author of English-set historicals and romantic suspense

. . . .

“I have what I consider to be a modest indie career at this time…yet last year (my first year self-publishing) I made four times the money Penguin paid me in my best year with them.” —Lauren Royal, author of historical romance

Link to the rest at E-Book Formatting Fairies and thanks to Barb for the tip.

From The Huffington Post Blogs:

I write historical fiction. I’ve been a full-time professional writer for almost 20 years. I realized early on that being an author is a hugely misunderstood job. Because there are no pay grades and very little structure, people make interesting assumptions about the profession. The writer is a mysterious figure, wandering lonely as a cloud, fired by inspiration, or perhaps a cocktail or two. Writers have it easy. If you write a bestseller or have your book made into a movie, you’ll never have to work again, or so the myth goes.

When my first novel was optioned for film in 1999 the common response was “Off to Barbados?” The option was for £3,000 – this remains a fairly average figure for that kind of deal. In fact, the perception at the Society of Authors (which acts as a union for writers) is that in real terms, writers’ incomes have gone down over the last 10 years. The industry values publishers, editors and publicists (who are paid reliable salaries) but when it comes to writers, there are so many people who want the job, that conditions are tough. At publishing houses writers aren’t even treated as part of the team. It was interesting last year when Random House made record profits from 50 Shades of Grey, that it decided to award a bonus of $5,000 (just over £3,000) to everyone working in the US arm of the company. They did not include their writers.

. . . .

For publishers, the hunt is on to find those high earners so they commission more books than can possibly make it – and see what sticks. In the UK something just under quarter of a million traditionally printed books are published annually. Set that against the fact that the average first novel sells something in the order of 1,000 copies and you can see what writers are up against. Although given a (usually) small advance by a publisher, a writer still has to earn that money from sales.

So how much does a writer have to sell to make it?

Average earnings in the UK were around £26,500 in 2012. To make this amount on a book contract for a paperback edition selling at £7.99 that pays 10% a writer would need to sell 33,166 copies a year. And that’s if the book isn’t discounted as part of a 3 for 2 promotion, for example. That is a lot of books! To put it in perspective to get to number one in the UK paperback chart last month you’d have needed to sell almost 20,000 copies a week. This means that going to number 1 doesn’t even earn you the national average wage (and that book may have taken the writer months or even years to produce).

. . . .

In 2005 (the latest figures available) the mean (average) figure that a professional writer-of-books in the UK earned was £28,340 but because there is such a huge bias at the top of the table, the median figure is far more telling. £12,330. Well below subsistence levels.

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

From TeleRead:

“Publishers are beginning to do more aggressive e-book price testing,” according to a brief news item that appeared on thePublishers Weekly website yesterday. “Both Houghton Mifflin Harcourt and Storey Publishing have recently announced monthly pricing promotions that set prices for a selection of titles at no higher than $2.99.”

Houghton Mifflin Harcourt‘s promotion, which the company is referring to as Take 5, will be getting underway sometime next month. Five thematically similar titles will be grouped together as part of the promo, and those e-books will be offered for $2.99 or less.

. . . .

Storey [Publishing] seems to be discounting a ton of its books; certainly more than five. Each month the publisher chooses some sort of theme (April’s theme is Gardening; March’s theme was Crafts), and then of course e-books fitting that theme are offered for $2.99 or less.

Link to the rest at TeleRead

PG decided to run some numbers for indie vs. traditionally-published authors on $2.99 ebooks from Amazon.

The indie author’s numbers for the sale of a single book are easier to run, so PG will show those first. (Sorry for the clumsy formatting, but that’s what WordPress wants to do.)

Now, let’s look at the numbers for a traditionally-published author on a $2.99 ebook sale on Amazon. These assume the author receives the a royalty of 25% of net ebook proceeds which is standard across all big publishers these days.

In round numbers, the traditionally-published author must sell five times as many ebooks as the indie author sells to come out ahead. The indie author receives $2.04 for the sale of a single ebook. The trad author receives $2.16 total royalties for the sale of five ebooks.

From Booktrust:

This week I had an argument with a couple of writers online about money. I said that writers shouldn’t write for money. The writers I was talking about were proud to say that money was the sole reason they wrote.

. . . .

I thought I’d try and pin down what I believe the relationship between a writer and money should be. So here is everything I know about writing and money.

1. Firstly, writing is not for those who want the security of knowing what they are going to be earning. If you are after something financially predictable try something more sensible. Like acting. Or street-performing. Or the lottery.
2. Every writer starts out not earning. You have to write a book. And then get an agent. And then a publisher. And that takes, on average, two lifetimes.
3. You cannot write for a market. You can only write for humans. And humans are fickle.

. . . .

6. Writers are meant to be poor. Even when they are rich they live like they are poor. There is a limit to how much you can spend on toasters and dressing gowns.

Link to the rest at Booktrust

From Publishers Weekly:

Opposition briefs were filed this week in HarperCollins’ lawsuit against Open Road over the digital publisher’s e-book edition of Jean Craighead George’s 1973 bestselling children’s book Julie of the Wolves. While both sides seek to bolster their cases for who owns the e-book rights, the filings further suggest that the case is more about e-book royalties.

“Harper had its opportunity to publish an e-book edition of Julie of the Wolves,” the Open Road brief states, adding that fact is not contested by HarperCollins. “George, who was certain she retained the e-book publication rights, would have preferred to publish with Harper because of their long print association. Harper, however, would not meet Open Road’s 50% royalty offer, insisting Ms. George accept just [number redacted], which she deemed fundamentally unfair to authors given the low costs and high efficiencies of e-book publishing. Therefore, Ms. George chose to publish with Open Road. Having lost in the marketplace, Harper then turned to the Federal Court, asking it to save Harper from its bad business decision.”

Contract questions aside, that contention certainly raises a business question: having published and sold more than 3.8 million copies, did HarperCollins choose to litigate over a contested phrase in a contract drafted more than 40 years ago, before e-books were invented, rather than negotiate a higher e-book royalty rate for a bestselling author? And if so, why? Although the case will almost certainly turn on how the court interprets a contested clause in the contract, the filings suggest the case could have been avoided.

. . . .

Meanwhile, the clause in question, both sides acknowledge, was inserted by George’s agent, Curtis Brown, and a significant part of the Open Road brief is spent explaining that HarperCollins’ reading of the contract is only enabled because Brown’s clause is poorly written and contans a grammatical error. But the fact that Brown inserted the clause in the first place raises questions: would an agent ever seek to insert a clause giving away an exclusive publishing right to a lucrative medium not yet imagined? And, even if HarperCollins prevails, how applicable would the decision be in settling other questions about backlist e-book rights? After all, the language at issue is not HarperCollins boilerplate language.

Link to the rest at Publishers Weekly

In PG’s perpetually humble opinion, the filings reveal distinct evidence of a short-sighted overreach by HarperCollins.

For a little background, during the early days of ebook provisions in publishing agreements, publishers regarded anything to do with computers and books as a subsidiary right and decided that ebook royalties of 50% of the amount received by the publisher were fair. After all, this would probably be a license and the only thing being delivered to the customer was a bunch of bits and bytes that represented no incremental cost of production once the digital file had been created. The publisher’s 50% share would be pure gravy.

As mentioned in earlier filings in this case, the clause inserted by George’s agent provided for a 50/50 split of computer-based proceeds, which reflected the nascent standard.

As ebooks began to sell in small quantities, in an amazing coincidence, major publishers simultaneously changed their ebook royalty provisions to pay the author 25%.

(If PG were cynical, he would point out similarities between this ebook royalty coincidence and the coincidence of five large publishers simultaneously forcing agency pricing on Amazon. Fortunately, PG is never cynical.)

As the filings indicate, after being approached by Open Road about publishing an ebook version of her multi-million copy classic, Julie of the Wolves, at the earlier prevailing royalty of 50%, Ms. George, the author, contacted Harper about doing the same deal.

Harper said no. PG suspects Harper was worried about setting any sort of precedent for other authors by giving anyone a 50% ebook deal – opening the floodgates and all that, you know. If Ms. George wouldn’t cave and accept 25%, there would be no ebook version at all.

PG would note that, if Harper was really confident that, in fact, it had the exclusive right to publish an ebook version of Julie, it would have done so. Counsel undoubtedly warned that taking this path could result in a successful suit for copyright infringement by Ms. George, likely with enhanced damages for willful infringement. And, of course, there was that problematic contract language about paying Ms. George 50% of ebook proceeds.

Unfortunately, advice of counsel is privileged, so the court will not be given the benefit of the warning Harper’s counsel likely gave about Harper not having enough rights to actually publish an ebook.

Harlequin sent out a survey to its authors and, though he is not an author, Joe Konrath answered it.

From A Newbie’s Guide to Publishing:

Harlequin just sent out a survey to its authors, seemingly asking for sincere feedback.

Maybe it has to do with their current lawsuit. Maybe it has to do with their recent financial woes.

Or maybe, just maybe, they really want to try and improve their relationships with the one group of people who are essential to their survival.

. . . .

Are you there, Harlequin? It’s me, Konrath. And I’ll answer your questions honestly.

If you really want to know what your authors think of you, I’m friends with dozens of them, and have been going to writing conventions for over a decade. I’ve spoken to hundreds of HQ authors at RT. I’ve listened to so many tales of woe and hardship and mistreatment that the Big 6 look like angels compared to you.

. . . .

Marketing support is no longer needed in a digital world, except for prime placement on Amazon.com and free ebook announcement websites. Those are the only two marketing efforts I’ve seen that directly translate into sales.

. . . .

Fair monetary compensation is essential to keep me happy. In fact, I think it may be the number one concern of the vast majority of authors.

. . . .

HQ has the worst reputation among writers out of every publisher I know, with the exception of the recently departed Dorchester. But now that they’re gone, you’re Number 1!

. . . .

Transparency? How about allegedly licensing rights to yourself in order to avoid paying authors full royalties? Was that transparent?

. . . .

It is 2013. The benefits that publishers have traditionally supplied, including editing, cover art, jacket copy, formatting, proofing, can all be hired out for fixed costs. There is no need for any author to sign to HQ for ebook publishing. I can reach just as many, if not more, ebook readers on my own than Harlequin can.

With print, HQ still has its large distribution network, which has value. But that value is fading as more bookstores close and more readers embrace ebooks. And that distribution network doesn’t benefit authors much when they are making literally pennies per copy sold.

. . . .

Think about this long and hard: Writers no longer need HQ to reach readers. They can do it themselves, via Amazon.com, and make a lot more than HQ pays them.

Why should any author stay with HQ? Because you throw great parties? Because they have a desire to see their book in Walmart (for as long as Walmart still sells books)? Because they want to (ack) experience a sense of belonging?

HQ was once the only game in town when it came to serial romance. But you are becoming obsolete. And the one group that could save you–your authors–has been paid so poorly for so many years that they are eager to pursue other avenues.

. . . .

I’m very unhappy with HQ, and I don’t even work for you. I’m unhappy with your royalty rates and low advances. I’m unhappy with the sneaky, underhanded way you allegedly licensed rights to yourself. I’m unhappy with how you’ve strung authors along for years, contract to contract, with barely a cost of living increase. I’m unhappy how you keep their rights forever because you claim you sold one ebook in Bulgaria, even though there have been no other sales in years.

I think you prey on the naive and needy, treat your authors poorly, and the best thing for the world would be HQ gone.

But I do like your parties.

Link to the rest at A Newbie’s Guide to Publishing

From author Kaz Augustin:

An interesting email landed in my Inbox earlier this week and, as it was addressed to me, I think I’m safe to use my own discretion and share it with you. The email had to do with pricing changes. I am told:

Last fall, we told you that we were undertaking the task of looking at our pricing and changing backlist pricing where appropriate. After several months of working on this…and getting approvals from our leadership team, we’ve finalized all changes and will be rolling them out in April and July.

…[W]e are no longer pricing based on word count, but utilizing that as only one of the factors.

As Jon Stewart says, chin on palm: Oh, do tell!

. . . .

Please note that, while Marketing, Retail, Sales and Editorial were included in these oh! so very important decisions, nothing was mentioned about the poor Author who, it appears, is only a footnote in this orgy of revenue reorganisation. You will also note “the new addition of the $1.99 price” point.Ouch! $1.99? Them’s scraping-the-bottom-of-the-barrel words! Not so bad for short stories and novellas but I would hate to be an author with a print-viable novel (55K words and above) forced to that price point.

. . . .

Let’s look at DRYNN by Steve Vera. It’s a whopping 91,000 words. (Congratulations Steve. No, I really mean that. It takes a lot of effort and ability to keep a novel humming for that length and, having done something similar after which I collapsed in exhaustion, I salute you.) Its price? Does $5.99 sound fair? It does to me. No, would you believe, $2.69? For 91,000 words. Not self-published.

Is Carina serious? In my last statement from Harlequin (April to June 2012), I received $27.21 on the sale of 29 books. That works out to an average of $0.94 per book on a cover price of $5.99.

. . . .

Remember, 94 cents on six dollars. If the price of my book drops by two-thirds (as I’ve been informed it will), then I can only expect about $0.31 per copy on future statements.

. . . .

For a 91,000 word novel, the author will be getting approximately 16% of the cover price. This is due to various Harlequin shenanigans involving their mother company in Switzerland “selling” rights to their own companies in other countries and thus stiffing authors of at least half of their royalties, then on-selling to etailers who take 50%, etc. So, after all this financial bait-and-switching is done, the average royalty is around 16% (An auditor! An auditor! My royalties for an auditor!) and I think I’m being generous here.

So, on a $2.99 digitally-released 91,000-word novel, the author will be getting 48 cents in royalties.

. . . .

Carina Press has professional editors, so do I. Carina Press has a Twitter account, so do I. Carina Press has a Facebook account…well, I don’t have one because I detest Facebook. Carina Press has a website, so do I. Carina Press sells through various etailer outlets, so do I. In fact, Carina Press does bugger all more than I do all on my lonesome (almost three years later and I’m still amazed at what a skinflint organisation Carina Press is on the marketing front) and I’m still making a multiple of the figure a powerhouse like them can come up with.

Link to the rest at Fusion Feuilletons

From journalist Nate Thayer:

Here is an exchange between the Global Editor of the Atlantic Magazine and myself this afternoon attempting to solicit my professional services for an article they sought to publish after reading my story “25 Years of Slam Dunk Diplomacy: Rodman trip comes after 25 years of basketball diplomacy between U.S. and North Korea.”

. . . .

Hi there — I’m the global editor for the Atlantic, and I’m trying to reach Nate Thayer to see if he’d be interested in repurposing his recent basketball diplomacy post on our site.

. . . .

After a brief phone call where no specifics were really discussed, and she requested I email her:

Hi Olga: What did you have in mind for length, storyline, deadline, and fees for the basketball  diplomacy piece. Or any other specifics. I think we can work something out, but I want to make sure I have the time to do it properly to meet your deadline, so give me a shout back when you have the earliest chance.

. . . .

Thanks for responding. Maybe by the end of the week? 1,200 words? We unfortunately can’t pay you for it, but we do reach 13 million readers a month. I understand if that’s not a workable arrangement for you, I just wanted to see if you were interested.

Thanks so much again for your time. A great piece!

. . . .

Thanks Olga:

I am a professional journalist who has made my living by writing for 25 years and am not in the habit of giving my services for free to for profit media outlets so they can make money by using my work and efforts by removing my ability to pay my bills and feed my children. I know several people who write for the Atlantic who of course get paid. . . . 1200 words by the end of the week would be fine, and I can assure you it would be well received, but not for free. Frankly, I will refrain from being insulted and am perplexed how one can expect to try to retain quality professional services without compensating for them.

. . . .

Hi Nate — I completely understand your position, but our rate even for original, reported stories is $100. I am out of freelance money right now, I enjoyed your post, and I thought you’d be willing to summarize it for posting for a wider audience without doing any additional legwork. Some journalists use our platform as a way to gain more exposure for whatever professional goals they might have.

. . . .

Hi Olga: No offense taken and no worries. I am sure you are aware of the changing, deteriorating condition of our profession and the difficulty for serious journalists to make a living through their work resulting in the decline of the quality of news in general. Ironically, a few years back I was offered a staff job with the Atlantic to write 6 articles a year for a retainer of $125,000, with the right to publish elsewhere in addition.

Link to the rest at Nate Thayer and thanks to Jaye for the tip.