Authors and agents play hardball on backlist ebook deals

In the world of paper, royalties are paid on list price. If that’s what they’re talking about, good luck. With distributors taking their 50%, giving authors 50% would leave exactly zero percent for everyone else. If they’re talking about 50% of net, that might make sense for backlist titles that have already been edited, already had marketing investments, etc. For new releases, 50% is extremely aggressive. Even most traditional ePublishers generally pay a bit less than this.

Rob Preece
Publisher

EBooks are the hot new thing. And, as always, everybody is driven by greed to grab as much of the newly baked pie as possible.

I think the best policy for us readers is to gravitate towards those publishers and authors who treat us with respect and fairness.

For example, I love what Tor is doing. It’s just too bad they don’t have more books I want to read.

Greed Greed ….

The only way this model is going to succeed is busting open the existing Publishing houses who have built enormous money eating machines over the last 100 years on the backs of their writers. The new broom needs a whole new model of publisher.
It looks like blood on the tracks and a lot of lost opportunities because the public won’t be screwed and as I have said before on this forum, the torrent sites will be cleaning up until they get their acts together.

Is it greed for the writer to want a higher percentage of the profits when there wouldn’t be a product without him? As is, the writer currently makes less money than anyone else on the big publishing food chain created by the book.

The way royalty works is the author gets a set percentage of what the publisher gets from the distributors. In other words, after Amazon takes its cut, the author and publisher split the remaining profit 50/50 or 30/70 or 25/75 or whatever.

Now that the infrastructure of the ebook has been created within the big publishers, it only makes sense that the author should make more. After all, the piddling royalties were justified by the cost of setting up the infrastructure.

As the majority of the profit moves from paper books to ebooks, the big publishers will need to raise their ebook royalties anyway because their major attraction for authors is their paper distribution system. When that ceases to be a major draw, the lean and mean small epublishers with their higher royalties will have a distinct advantage over the bloated corporate structure of the big publishers for authors.

As it becomes easier to spot potential winners in the book lottery, so it will become easy for nimble deep-pocketed newcomers (or smart traditionals) to approach unknown authors with deals that focus on marketing with muscle. The author will have done the groundwork. Editing requirements and all the other costs associated with the old system will be minimal.

We tend to focus on percentages (for good reason) but we need also to look at the absolutes. If a newly smart publisher (or super-agent) can take my unknown book and put it on billboards or tv and assure me that sales will be in the multiples of a hundred times greater than I can make on my own and that my book swimming alone among a million others priced at $1 can now command a value of $7.99 then surely that will be worth a pretty substantial percentage?

This, I believe, is what someone with deep pockets should do (and it does not have to be someone in the game at the moment). Traditional publishers trawl the slush pile for new talent and then spend as little as possible on the new author until they see what bites. Harry Potter’s first print run was 5K.

In the model above, it should be easier for big business to spot and then manufacture winners from which they can then share the rewards from movie, merchandising and other deals.

There is a lot of wishful thinking among authors. Sure, some will make it alone but there is still a role to be played by intermediaries. Few people really understand how difficult it is to get your work noticed above the noise. The business of promoting your book is a full-time job. If you are not doing it, you will probably remain unknown and if you are working as hard as you need to, you are probably not writing as many books as you could.

Social filtering will transform the space but there will always be room for big budgets to magnify interest in a work that has mass-market appeal.

I’m a writer. I want to write. I also know that if I don’t make it happen, no-one will. If I spend half my time writing and half on the other stuff, there’s another 50% right there.

In the future, readers will win because they will read better books at keener prices. Born-again publishers will win because they will be more efficient and will not have to use their winners to finance the losers. Writers will win because, if they decide to team up with a publisher, it will be from a position of some strength. Real partnerships will be formed instead of the one-sided contracts offered to starry-eyed authors plucked from the slush pile.

I wonder when an angel investor will see this opportunity and grab it?

Paul, the problem is that the big publishers have learned that major promotion money for an unknown author’s book usually doesn’t work. The major promotion money for James Patterson and Nora Roberts works because they are brands so the money also promotes backlist.

Just look at the movie industry. Movies that are wildly promoted are as likely to tank as movies that aren’t, and movies that don’t have the big bucks behind them go on to break records.

There’s an old story in publishing about the business meeting of a publisher’s staff with the accountant for the conglomerate that bought them out. The accountant tells them they should only publish bestsellers, and the publishing staff laughs hysterically at him. Finally, some kind soul explains to him that no one knows what will sell and what won’t. Some can make a good guess, but it’s only a guess.

That’s not to say that putting some targeted promotion money into each book won’t work. A good example is Medallion Press, a small publisher which specializes in romance. Every book has a good-sized ad in most of the magazines that cater to genre readers as well as in the trade press. They focus on promotion to their special audience and not on the wide broadcast of information via highway signs and TV ads.

I don’t think any of their books have hit a major bestseller list, but they are surviving.

And Medallion is owned by a ketchup heiress who also writes romance so some real money has been poured into the mix. Medallion also expects the author to put as much time into the promotion as they do so it is a partnership of sorts.

So far, social media hasn’t proven a major player in the success of books. Of the unknown books hyped there by publishers, authors, and fans, very few have seen any major success.

Thanks, Marilynn. That was an informative and useful reply. It is true that Patterson was not an unknown, but he was pretty small fry when he tried to get his publisher to run an ad on tv for its launch. At the time convention had it that that wouldn’t work for books and his publisher refused. The author made the trailer himself and we know what happened then. The following is from a Jan 2010 NYT article.

http://www.nytimes.com/2010/01/24/magazine/24patterson-t.html?_r=1

‘…Patterson wrote, produced and paid for a commercial himself. It opened with a spider dropping down the screen and closed with a voice-over: “You can stop waiting for the next ‘Silence of the Lambs.’ ” Once Little, Brown saw the ad, it agreed to share the cost of rolling it out over the course of several weeks in three particularly strong thriller markets — New York, Chicago and Washington. “Along Came a Spider” made its debut at No. 9 on the New York Times hardcover best-seller list, ensuring it favorable placement near the entrance of bookstores, probably the single biggest driver of book sales. It rose to No. 2 in paperback and remains Patterson’s most successful book, with more than five million copies in print…’

It is precisely because publishers are reluctant to take chances on new things that they are in the position to be dethroned if they do not start leading instead of following.

While I believe that a newcomer without baggage can cherry-pick unknowns, I do take your point that there will be no guarantees. However, when a heavily-promoted movie tanks, it is usually because the producers have been found out and the public has not fallen for hype over substance. That is not what I believe should happen in the future of book promotion.

While you may not be impressed by social filtering at the moment, I believe we all will be in the near future. With the power of the Net and tens of thousands of readers sifting the slush pile as a by-product of their normal reading habits, it should be possible to make sure that hype is only applied to books that have proven themselves to be worthy (and not just by a few people in the publishing chain but real book-buying readers).

If an entepreneur is willing to put 10 lots of $1m into 10 startups with crazy ideas, knowing that 8 are likely to fail, then it is not too much of a stretch for one of them to use the new tools available to find a number of gems from the self-sorting pile and then reduce that number to a handful using market research among ordinary people to decide where the big bucks should go.

An advertising campaign paid for by a movie’s creator is not to be trusted but one from someone who has plucked a book from relative obscurity, who believed in it so much that they were willing to put a million bucks behind its promotion – that is something else entirely. I would believe it was worth a look to find out why.