Author Earnings/Vanity Presses

In a comment to a post titled The Measures That Matter yesterday, TPV regular, Felix J. Torres, made a couple of comments in response to questions that PG though would benefit any who didn’t read them in the earlier post.

Comment 1

It’s Pay-to-Play publishing.

Not quite Tradpub, not quite vanity…or at least the honest ones are. The problem is it’s closer to Vanity that tradpub and it’s hard to tell the honest operators from the scam artists.

The idea is they offer one-stop publishing services for hire for authors unwilling or unable to manage the process themselves, typically because they want the “all-important” B&M shelf space. Which, yes, would be important to established legacy authors but… well, to a total newcomer without an installed base POD is a whole lot cheaper, albeit with a lower margin.

A hybrid publisher might offer editing, formatting, graphics, and the connections to China to order up a traditional print run…all paid up-front by the author, either in cash, a piece of copyright, or both.

Easy to see why they struggle to prove their bonafides, right?

And the OP is right: it is an old business model that harks to before the nineteenth century, when authors would pay a printer to run a batch of pbooks for an upfront free. Over time, the printers started doing more and demanding more and became what is now the legacy publishing business that has been mostly taken over by the multinationals. The smaller players that are getting hit the hardest by disintermediation seem to have reverted to the older model to try to stay afloat.

Personally, I don’t think there is enough money in today’s markets for the model to work for honest operators.

At the low end sales will be too low for a fair distribution so one or the other (most likely the author) will get shorted. At the high end, sales will be high enough the author will have enough leverage to negotiate a non industry-standard contract with an advance somewhere, instead of having to pay. What remains is mostly a narrow band of legacy midlisters dropped by the BPHs, successful Indies willing to pay to offload the backend workflow, and… Well, Dreamers with cash…

The idea is that you have to spend (lots of) money to make money but the assumption that B&M access is essential isn’t real. The payoff is limited and in most cases not justifiable for newcomers.

Comment 2

Sure they can [be hybrid publishers].

They can try, anyway.

As the OP points out, it’s a bad term but they haven’t come up with anything else to explain it.

An author is a hybrid if they send some books down a traditional publishing channel and some through non-traditional channels like direct sales, KDP, KU, D2D, Lightning source, etc. “Hybrid” refers to their distribution channels and revenue sources.

A publisher is hybrid if they earn some of their money from selling/licensing books and some from the author. “Hybrid” publishing refers solely to how they get their money.

An honest Hybrid publisher might split the cost of getting a book to market 50-50 with the author and, likewise, split 50-50 the net revenues (after warehousing and returns, pulping, etc), if any.

The risk is the “if any”.

An honest hybrid publisher that takes on too many “less than popular” titles might find themselves making 90% of their net from Author payments instead of from the minimal book sales. Depending on their bookkeeping, that might put them out of business or make them an accidental vanity press.

It’s slippery turf on both ends.

Publishers want to minimize risk and one way to minimize it is to not only pay minimal or non-existent advances but to actually “share” their costs with the author. How the costs and revenues are shared and how discriminating they are in taking on “partners” to share them with is the distinction between a hybrid press and a vanity press.

As with everything publishing related, the devil lies in tbe details.

It’s just a different minefield for authors to navigate, different risks and different trade offs. And, more often than not, another game that it is safest not to play because there is no significant difference between a scammer and an honest but incompetent operator.

From Writer Beware, an item PG thought he posted earlier.

Last week, Bowker released its periodic report on ISBN output in the self-publishing field, updated with 2016 and 2017 figures.

There are many interesting bits of information in the report–including CreateSpace’s hulking dominance of the field, with more than 10 times the output of its closest competitor, Smashwords (although it should be said that the usefulness of this comparison–and of the figures themselves–in assessing the growth of self-publishing is undercut by the omission of popular self-pub platforms like IngramSpark and Draft2Digital, and also by the fact that many authors who employ these services don’t use ISBNs at all).

What I want to focus on, though, is Author Solutions–where ISBN output is a useful measure of overall activity, since all AS publishing packages include ISBN assignment.

In previous posts, I’ve followed AS’s steady decline, from an all time high of 52,548 ISBNs in 2011 (one year before Pearson bought it and folded it into Penguin), to less than half that in 2015 (the same year that Penguin unloaded it to a private equity firm called Najafi Companies*).

In the latest version of Bowker’s report, that slide continues. 2016 did see a small post-Najafi uptick, from 24,587 to 30,288; but in 2017 the freefall resumed, with ISBNs dropping to 25,971–just slightly above 2015’s output. A few of the individual imprints do show negligible increases, but for the most part they all go down (by four figures in the case of AuthorHouse).

. . . .

Looking separately at print and ebooks, it’s clear that the decline is primarily driven by print. Between 2012 and 2017, print ISBNs dropped by nearly half. There’s no 2016 bump–in fact the numbers continue to fall–and output plunges more than 18% in 2017.

. . . .

Turning to ebooks, we can see that the 2016 bump in overall ISBNs was entirely due to ebooks, which decreased drastically in 2015 but more than doubled the following year. In 2017, though, the trend reasserts itself. Although some imprints do show gains, the net result is a drop of 6%–less than print, but down is down.

. . . .

AS’s long, slow fade says a lot about how self-publishing has changed over the past decade, and it’s both good and bad news. The costly and often deceptive “assisted self-publishing” services that proliferated in the early days of digital publishing are gradually being supplanted by better options, and authors who are savvier about self-publishing know to avoid them. At the same time, though, the self-publishing field is increasingly monopolized by Amazon. And at least for now, the bad old services like AS are still managing to snag enough customers to hang on.

Link to the rest at Writer Beware

From Writer Beware:

Once again, Publishers Weekly’s annual overview of fast-growing independent publishers features not only innovative indies, but publishers whose business model is largely built on author fees: Morgan James Publishing and Austin Macauley. Seriously, PW? Why do you  keep doing this?

. . . .

Billing itself as “The Entrepreneurial Publisher”, Morgan James Publishing requires its authors “to commit to purchasing, during the life of the agreement, up to 2,500 copies [of their book] at print cost plus $2.” (Reports Writer Beware has received indicate that writers are asked for a “deposit” of up to $5,000 on contract signing; we’ve also had reports that additional fees may be due for editing and PR.)

To make this sizeable outlay of cash seem more palatable, MJP falsely claims on its “compare” page that “Many major houses require authors to purchase 5,000 copies, or more, of the book upon its release”, and that even with self-publishing, “[the a]uthor is expected to purchase however many copies required to sell to the general public.” (It also–again falsely–suggests that “old school traditional publishers” take possession of authors’ copyrights.)

Despite all of the above, MJP declares that “No Publishing Fee [is] charged, hidden or otherwise.”

. . . .

I’ve written before about Austin Macauley–and I’m not the only one: others have called AM out on its business model as well.

AM bills itself as a “hybrid” publisher*, and does reveal on its website that it offers “contributory” contracts. However, it presents itself as an “innovative independent trade publisher” and states that “we look at every new manuscript with a view to offering a traditional mainstream publishing deal.” This certainly encourages authors to believe that they have a good chance of a traditional offer. But Writer Beware has heard from just four authors who were offered contracts they didn’t have to pay for, while we’ve gotten 60+ reports from authors who received fee-based offers. Obviously this represents just a fraction of those who’ve submitted to AM; still, the proportion of non-fee to fee-based offers certainly suggests that the bulk of AM’s business is fee-based.

Link to the rest at Writer Beware

PG says if there’s a sucker born every minute, there’s a vanity publisher born every ten minutes.

A number of years ago, PG had the naive expectation that the breadth of information for authors on the internet and the ease with which the reputation of almost anyone can be examined online would put vanity publishers out of business.

Alas, while widespread access to the internet has changed a great many things, it has not changed human nature.

From Publishers Weekly:

The growth of hybrid publishing, the business model where authors subsidize the publication of their books, was one of the major points of discussion at the Independent Book Publishers Association’s (IBPA) Publishing University held April 6-7 in Austin, Tex. The event was a sellout with 300 publishers of all stripes—traditional independent publishers, hybrid publishers, and self-published authors—in attendance.

. . . .

One session featured three women who have developed successful hybrid publishing companies. To help ensure the professionalism of hybrid publishers, IBPA recently created a list of standards that publishers must meet if they are to be considered in the category. All three panelists stressed the importance of adhering to these standards. To meet criteria, publishers must vet submissions, take responsibility for the design and editing of the book, offer active distribution, and attain respectable sales.

Brooke Warner, publisher of the hybrid house She Writes Press, was involved in developing the criteria. She explained on the hybrid panel that while “respectable sales” was a fuzzy term, hybrid publishers must work to achieve sales levels that are appropriate for whatever type of book they are publishing. Sales of a poetry book, for example, would not be expected to achieve the sales level of a popular mystery.

Warner stressed that while She Writes is paid up front, her company is heavily invested in selling its authors’ books because its reputation is tied to the success of its titles. “We need to demonstrate we can get sales,” she said. We want the industry to be impressed by these books.” In addition, while the authors earn at least 50% of royalties under the hybrid model, She Writes also receives a cut.

Link to the rest at Publishers Weekly

PG suggests the threshold “standard” for these “publishers” is whether the author has enough money to pay them a large fee upfront to provide services the author could acquire directly from independent editors, book and cover designers on much more reasonable terms.

The fact that this program was a “sellout” at the IBPA conference does not bode well for credulous authors.

PG hasn’t seen publishing contracts from any of these 21st century vanity publishers. If anyone cares to share one with him for his contract collection, he can be reached via the Contact link at TPV.

From Dean Wesley Smith:

It’s got a ton of stuff in it. And takes a vast amount of time to go through. But worth it.

And their new side-business they are only offering to big publishers is flat scary.

Horrifying, actually if they are doing it wrong.

And I got a hunch that unless they are pulling names, that new business is setting them up for more lawsuits than I want to think about. Because from my understanding, they are releasing personal sales numbers of writers to businesses who can get past their paywall.

. . . .

Data Guy, Hugh, tell me I am wrong here… Please?

I know in the free report you released some names and blocked some information and other names. I hope that every bit of data you release attached to a name is permission granted. Please, please tell me you are doing that…

Because behind that stupid paywall of needing ten million in sales, any of my pen names, my name, Kris’s name, or our numbers better not be out in public there. And how will I know? Let me think… I have been around this industry for forty years and have a lot of friends who will be glad to send me information about myself they buy from you.

Link to the rest at Dean Wesley Smith

PG is an admirer of Dean. And Dataguy and Hugh.

Each of them has contributed a great deal of information (without compensation) that has benefited all authors and indie authors in particular.

PG is a big believer in personal and business privacy for those who don’t affirmatively spread their personal business everywhere.

However, the first question which came to PG’s mind after reading Dean’s comments, having earlier seen the information Dataguy made available from his new data analysis.

Who owns the information about how many books Dean (or any other author) sells and the prices at which those books are sold and the royalty rates Amazon and others pay to authors who self-publish with Amazon, Kobo, etc.?

Does Dean own the information because he wrote the books and owns the copyrights?

Does Amazon own the information because it reflects the number of books it sells on its own website?

Does Dataguy own the information because he gathers and aggregates it in ways that Amazon/Kobo, etc., don’t?

PG took a quick blast through the KDP Terms & Conditions which Dean and any other author who sells via KDP has agreed to. He did not find anything in the Ts&Cs that directly addresses the question of who owns the data respecting the sales and pricing of ebooks that Amazon sells. (PG suspects we can look for some clarifications on this topic in a future edition of the Ts&Cs)

PG did find some terms that tangentially address data ownership, however. (This is from the version last updated on   September 1, 2016)

Here’s a first section – Customer Prices:

5.3.4 Customer Prices. To the extent not prohibited by applicable laws, we have sole and complete discretion to set the retail customer price at which your Digital Books are sold through the Program. We are solely responsible for processing payments, payment collection, requests for refunds and related customer service, and will have sole ownership and control of all data obtained from customers and prospective customers in connection with the Program.

The question here is that, if Amazon has sole ownership and control of “all data” obtained from customers “in connection with the Program,” what things do “all data” cover?

The prices the customers paid for ebooks and the numbers of ebooks they purchased would seem to be part of the data obtained from customers in connection to purchases of books offered for sale via the KDP program. If so, the author doesn’t own that data.

Is there an implied license permitting Amazon to aggregate and categorize this data? Those activities, although not expressly mentioned, are required if Amazon is to calculate and create royalty reports for the purposes of paying authors. Providing authors access to this type of information would also seem to be required under Paragraph 5.4.2 which says Amazon will “will make available to you an online report detailing sales of Digital Books and corresponding Royalties. ”

Since this is so exciting, let’s move on to 5.5 Grant of Rights.

You grant to each Amazon party, throughout the term of this Agreement, a nonexclusive, irrevocable, right and license to distribute Digital Books, directly and through third-party distributors,

. . . .

(e) use, reproduce, adapt, modify, and distribute, as we determine appropriate, in our sole discretion, any metadata that you provide in connection with Digital Books;

. . . .

In addition, you agree that we may permit our affiliates and independent contractors, and our affiliates’ independent contractors, to exercise the rights that you grant to us in this Agreement. “Amazon Properties” means any web site, application or online point of presence, on any platform, that is owned or operated by or under license by Amazon or co-branded with Amazon, and any web site, application, device or online point of presence through which any Amazon Properties or products available for sale on them are syndicated, offered, merchandised, advertised or described.

Metadata is not expressly defined in the KDP Ts&Cs. Paragraph 5.1.2. requires the author to make certain she/he provides correct metadata. Under Subparagraph (e) of 5.5 above the author permits Amazon the right to use, reproduce, adapt, modify, and distribute . . . any metadata it receives from the author.

Is pricing of the book metadata?

One definition of metadata outside of the KDP docs is “a set of data that describes and gives information about other data.”

PG has a hard time seeing that the price of the book is not metadata – it describes and gives information about what the royalty rate will be under KDP and provides a basis upon which the mathematical calculation of the total royalty payable to the author will be calculated.

If pricing is metadata, Amazon can do almost anything it wants to do with pricing information, including distributing it to others besides the author.

One last KDP paragraph:

7 Confidentiality. You will not, without our express, prior written permission: (a) issue any press release or make any other public disclosures regarding this Agreement or its terms; (b) disclose Amazon Confidential Information (as defined below) to any third party or to any employee other than an employee who needs to know the information; or (c) use Amazon Confidential Information for any purpose other than the performance of this Agreement.

. . . .

“Amazon Confidential Information” means (1) any information regarding Amazon, its affiliates, and their businesses, including, without limitation, information relating to our technology, customers, business plans, promotional and marketing activities, finances and other business affairs, (2) the nature, content and existence of any communications between you and us, and (3) any sales data relating to the sale of Digital Books or other information we provide or make available to you in connection with the Program. Amazon Confidential Information does not include information that (A) is or becomes publicly available without breach of this Agreement, (B) you can show by documentation to have been known to you at the time you receive it from us, (C) you receive from a third party who did not acquire or disclose such information by a wrongful or tortious act, or (D) you can show by documentation that you have independently developed without reference to any Amazon Confidential Information.

PG didn’t find a specific provision where the author agreed that Amazon Confidential Information is the sole property of Amazon, but reaching that conclusion from the language above is a short step.

This provision limits what the author can do with information the author may receive from Amazon. The author is prohibited from disclosing any information regarding Amazon:

1. Finances
2. Business Affairs
3. Communications the author receives from Amazon
4. Sales Data related to the sale of Digital Books by Amazon
5. Any other information Amazon provides the author with respect to the KDP program

This covers a lot of ground.

Taken according to its terms, the author is not permitted to disclose:

1. Finances – Do sales and royalty reports the author receives disclose information about Amazon’s finances if the author shares them with others?
2. Business Affairs – Is there anything Amazon does that isn’t covered by this term?
3. Content of Communications between Amazon and the author – Are the contents of sales and royalty reports made available to the author communications? PG thinks so.
4. Sales Data related to the sale of Digital Books – If Content of Communications doesn’t cover sales and royalty reports provided to the author, Sales Data certainly does. If Sales Data is Confidential Information the author can’t disclose, does that mean sales data regarding number of books sold, prices for those books, etc., owned by Amazon. Again, there is not a specific agreement with respect to ownership of this data in the T’s&C’s, but, as between Amazon and the author, the author will have a hard time arguing he/she is the owner of the sales data.
5. Any other information Amazon provides the author about the KDP Program – This provision is a catch-all for just about anything Amazon provides the author.

For any visitors to TPV experiencing shortness of breath, PG will point out the boilerplate exceptions to the definition of Amazon Confidential Information. Anything that falls into these baskets is not Amazon Confidential Information even if it’s described in the first part of Paragraph 7 as Amazon Confidential Information (aren’t contracts wonderful?).

1. information that (A) is or becomes publicly available without breach of this Agreement,
2. information that (B) you can show by documentation to have been known to you at the time you receive it from us,
3. information that (C) you receive from a third party who did not acquire or disclose such information by a wrongful or tortious act, or
4. information that (D) you can show by documentation that you have independently developed without reference to any Amazon Confidential Information

If anything in complex Ts&Cs is straightforward, the exceptions to Confidential Information are.

• If other people know about it without you telling them, it’s not confidential.
• If you knew it before Amazon told you, it’s not confidential.
• If somebody besides Amazon told you and that person got the information without committing a bad act, it’s not confidential
• If you figured out something that Amazon told you, it’s not confidential.

So where does PG end up on this issue?

First, the standard disclaimers –

• This is not legal advice, you obtain legal advice by hiring a lawyer (and hopefully paying a lawyer) and not by reading a blog.
• PG could totally be wrong about this.
• PG spends more time before he provides legal advice than he does before he makes a blog post.
• PG might have missed a piece or lots of pieces of the KDP Ts&Cs that totally obliterates his reasoning.
• PG typed this post without reading it.
• PG could be high on Coke Zero and out of his mind.
• Those monkeys in the corner of PG’s office might not be real.
• Ditto for the aliens looking in through PG’s office window, one of whom looks like Jeff Bezos in disguise.

With the standard disclaimers firmly before you, PG thinks:

1. Amazon probably owns and controls the data related to the ebooks (and other books) it licenses and sells to its customers.
2. This data includes how many books it sold that are written by a particular author and how much money it paid to the author.
3. If Amazon owns the data, it could release the same information as Data Guy publishes to the whole world if it wanted to do so.
4. If Amazon owns the data, it can share as much of the data as it wants to with third parties, including Data Guy, subject to whatever limitations it places on Data Guy’s use of the information.
5. In their disclosures of information, both Amazon and Data Guy should be sensitive to the privacy issues of authors even if they are not contractually required to do so.

One of the aliens just brought a pizza into PG’s office as a sign that aliens want only peace. There is no spinach or canned tuna on top of the pizza, so PG will close for now.

From Author Earnings:

It has been nearly a year since our last Author Earnings report, which is probably far too long between updates. But while we haven’t said much publicly during that time, behind the scenes we’ve been super busy on the commercial side, and as a result we’ve taken our industry data and analytics capabilities to a whole new professional level.

For large publishers and other scaled industry players, this has led to a brand new source of real-time business data: a perfect complement to Bookscan, covering digital and online book sales. For authors, it means that we can now provide a far greater depth and accuracy of analysis here, pro bono, under the AuthorEarnings banner. So it’s a win-win for everyone.

But why did traditional publishers and publishing-industry analysts become so interested in our data in the first place?

Two reasons: Full-market coverage. And timeliness.

Over the past few years, traditional publishers have largely been able to navigate the digital disruption and adapt their businesses to the changing bookselling landscape with varying degrees of success. Unfortunately, the industry’s legacy sales-reporting providers, upon whom those publishers rely for data… haven’t.

Which has caused problems industry-wide.

For some book formats, these providers were still able to give decent visibility into overall sales. Print sales data from Bookscan, for instance, captures somewhere between 70%-80% of all US hardcover and paperback purchases at point of sale, giving publishers a reasonably accurate and statistically meaningful picture of which books US readers are buying in hardcover and paperback formats. And more importantly, Bookscan sales numbers for last week are available this week, to support publisher business decisions for next week.

Data reporting on the digital side of the market has been a whole different story.

Legacy data providers like PubTrack Digital and the AAP are effectively blind to vast sectors of the consumer ebook & audiobook market. And those non-traditional sectors are precisely where ebook sales have continued to grow, year after year, even as PubTrack-and-AAP-reporting publishers have seen their own ebook sales dramatically shrink. As a result, what was once a small blind spot in the industry’s online-sales numbers now blocks half the view. Data from PubTrack and the AAP is now missing two thirds of US consumer ebook purchases, and nearly half of all ebook dollars those consumers spend. (And reporting is so long-delayed–often by 4-6 months–that even if the data were more complete, it would still be useless.)

. . . .

While these commercial efforts have been kept wholly separate from AuthorEarnings, they’ve put us in a unique position, data-wise. In the past, even when we analyzed a million top selling titles at a time, we were still only looking at a single day’s sales. But no longer.

Now we capture over a million top selling titles a day. Every day.

Our analytics run in real-time, 24/7.

Which means that if a book sold even a single online copy since April 2017, no matter whom the publisher or author, we can probably find it in our ever-growing dataset. Whether that title sold two copies yesterday or two thousand, we can see those sales. We can total them up in our dashboard. And for next week’s unreleased titles–or next month’s–we can tally up their accumulated online preorders, too.

. . . .

During the last three quarters of 2017, we recorded $1.3 billion in individually tracked ebook sales, $490 million in individually tracked audiobook sales, and $3.1 billion in individually tracked online hardcover and paperback purchases. While this is not quite 100% of online sales during the period, it comes pretty close — we ramped up from a much smaller share in April, to where we are capturing more than 90% of all US online sales for Q4 2017 and beyond.

. . . .

The above two pie charts show 2017 US online book sales by format: on the left, total units purchased, and on the right, total consumer dollars spent.

(It’s worth noting that even print sales have, by now, moved mostly online: in 2017, we show a full 45.5% of Bookscan’s reported 687 million total US print book sales coming from Amazon alone. By our measurement, Amazon’s share of the print market has been steadily and continuously climbing, from “only” 41.7% in 2016 and 37.7% in 2015, while sales at bookstores and other brick and mortar outlets shrink — a fact obscured by Bookscan’s lumping of Amazon online sales and brick and mortar bookstore sales together in a single combined category called “Club & Retail.” So the red online “print” share shown here represents roughly half of all US print sales, period. ).

Unsurprisingly, when we look at the above pie charts, most online book purchases in 2017 were ebooks (55%), while audiobooks made up a small but fast-growing share of units (6%), and print books accounted for the remaining 39% of units. In dollar terms, ebooks–with their generally lower purchase prices–made up a far smaller share of total online dollar spending, while 63% of online book dollar spending was for print.

But that doesn’t mean adult fiction dollars split that way. Nor even trade adult nonfiction dollars.

Why? Because it turns out a huge chunk of those print dollars are actually going to textbooks and other academic/professional print titles (strangely, the DSM-5 Psychiatric Manual of Mental Disorders was a particularly high 2017 seller). Textbooks, which are generally priced in the $60-$200 range, skew the dollar total significantly toward print. As do children’s books (including Board Books), another huge category of book sales where almost all purchases are in print.

When we leave out textbooks and children’s titles, and look only at adult fiction & trade nonfiction, the picture changes somewhat…

. . . .

70% of online purchases of adult fiction & nonfiction are ebooks & audiobooks, and online consumer dollars skew mostly digital, too. In fact, most of the remaining online print share here is nonfiction; further narrowing the scope to just adult fiction, we see that online sales are even more digitally dominated.

. . . .

Romance readers are overwhelmingly buying digital now: 90% of all Romance purchases are ebooks. And we can see that Science Fiction & Fantasy, with roughly 75% of sales now ebooks & audio, is not that far behind. On the other hand, readers of Poetry are still buying 82% of those Poetry books as print, and 85% of Drama & Plays are bought in print, even online.

Link to the rest at Author Earnings