The author of Blonde Lightning, Earthquake Weather, Angry Moon, and others, told his prospective publisher to take a walk after he was offered a 25% ebook royalty rate. In a blog post entitled Maybe the Mayans were right … but they were talking about the publishing industry he discusses the negotiations he had for a new book and killed the deal, saying to the publisher:
“I’m just amazed at this. No amount of “platforming” can justify this rate. If this is the way publishers are going to try to hold onto the business, then I think they are doomed. If that’s the rate they expect me to sign up for if I do a deal over there, I’m going to have to pass and save us the time working on the pages. If there is the chance of doing a book deal where I retain the e-book rights, I would be interested, but I think that’s what they are really looking for anymore anyway. So guess this is it.
He then goes on to say:
I’ve spent the last week checking around with some of the agents, editors and writers I know and have found that this is, indeed, the standard rate that publishers are expecting on e-book sales. When I asked my agent how they can justify this, he told me that they would give me a large enough advance that it wouldn’t matter for a long time. And yes, the advance we were discussing was very good money for someone who hasn’t had a book published in five years and has had what could only be considered “minor” success in the writing field, if that. I was probably a fool to walk away from even the possibility of such a deal. But I had two good reasons for doing so.
My two children.
While this deal may have given my family a quick infusion of cash, the fact is that by the time I finished the book in question the cash would be gone. And by the time that book “earned out” at a rate of 3-1 in the publisher’s favor in e-book sales, the publisher would have seen a small fortune without noticeable expense. And we would be saddled with a deal that would probably haunt my family long after I was dead and gone. …
Another way to look at it would be this: Let’s say the publisher picks up one of your old books and turns it into an e-book: text transfers, new editorial, a new cover, placement with the vendors, etc. Right now you yourself can do this for far less than $2,000, so we’ll assume the publisher’s cost will be that or less. By the time your book has earned you $10,000 in royalties, the publisher would have collected $30,000 for themselves. And what would their contributions have been? A “platform”? Publicity? We’ve all seen how well publishers promote “mid-list” books. What would make us think that things will change in this new e-world?
There’s a lot more worth reading in the post.
Thanks to eBookNewser for the heads up.
It amazes me that the “agency” publishers can guarantee 30% to an online reseller (without a blush) and then only offer 17.5% to the author. This at the same time that Amazon will give them the full 70% to self publish.
In principle I am sympathetic to Lee’s situation and the offered royalty looks bad.
But what we don’t know if the size of the advance and what the publisher was to spend on marketing.
Lee asks “What this “sizable advance” now looks like to me is a very expensive loan.” My response is ‘of course it is’ … Not only a loan but a loan made with the risk that it may never be repaid!
If a Publisher is a) spending a good deal of money on promotion and b) is advancing a significant sum .. then it makes sense for them to get a significant cut; a greater cut than if they are doing neither. They, after all, are putting out a lot of cash up front, taking the gamble that his title may not sell. That HAS to be recognised.
My opinion is that each author needs to be looking at the ‘business case’ of the deal for each title. He needs to recognise who is the one taking the biggest risk.
Going self publishing will mean all the risk stays with the author. It also means all the promotion costs stay with the author. The reward is a high royalty. Great. But how confident is he that he can produce those sales ? that is the key issue here.
The problem is in the marketing. Publishing your own book for Kindle, Nook, etc., is fine and dandy (I’ve done it!). But having been traditionally published–and now having ventured into independent publishing–I can emphatically say I was exposed to many, MANY more readers as a ‘traditionally published’ author. Amazon, BN and other ebook venders are going to have to find some way to help indie authors ‘get the word out’ about their books.
Bob W: It boggles the mind, no?
Maybe they think writers are hermits thatt don’t have a clue of what the real world looks like?
Especially since Amazon is just taking the publishers’ own terms to the content producers. From their point of view it makes no difference if they deal with the author, the agent, or a publisher, as long as they get the 30% cut the Price-Fix scheme set as a retailer baseline.
In other words, they are playing the Publishers against their content providers and inviting authors and their reps to maximize their return by bypassing the big publishers.
Agency Pricing: the gift that keep on giving… to everybody but the Price-Fix Five…
Wow, that was sneaky. They went from a 10%/12.5%/15%-of-list-price royalty to 25% of net receipts without making it clear the percentages were based on different things. It certainly went right by me when I wrote an article about it the other day.
17.5% is still an increase over what they had been paying, but in that context not all that great of one.
Chris, I haven’t seen how they are defining net. I was being generous in assuming that it was based on the remaining 70%. They might also be removing “distribution costs” like DRM and administration costs around the sale. I wouldn’t be surprised if it still works out to 10-15% of list.
I would be interested in a followup to this story. It appears that the book has yet to be written. Having turned down the publisher and the admittedly good advance, the author now has to support his family on his own plus write the book. After writing the book, he then has to sell it.
In his analysis, the author fails to take into account the value of the risk the publisher takes by providing an advance that, as the author admits, would feed his family for at least the couple of years needed to write the book and get it off the the ground but has no certainty of earning back. We aren’t talking instant-hit-author like Stephen King or James Patterson; we are talking a midlist author who has published in 5 years.
Additionally, he is very dismissive of the costs involved in producing either the print or ebook, suggesting that the publisher will pay no more than $2,000. He may be right, I can’t say specifically for his book, but I’d be surprised if it were anywhere near that little. That is less than what a good copyeditor alone would be paid, never mind the cover designer, the developmental editor, and the proofreader, among others, that a properly prepared book should have.
I’m not suggesting that the author didn’t make the right decision for him; I am suggesting that it isn’t as cut and dried as either the author or the commenters imply. I know this has been the topic of discussion numerous times here and on other forums, but repeatedly saying that publishers don’t earn their keep as a mantra isn’t the same as making it fact.
Speaking as a copyeditor … the publisher could pay $2000 or more for a good edit … then there’s book design and proofreading. It all depends on the size of the book and the quality of the text. Some authors write good, clean prose and some leave me wondering, “What were they thinking when they decided to publish this?” The latter take a lot more time.
My only concern with the author is with the combination of two things he says:
“So the “publisher” makes $5.25 per copy and the writer makes between $1.40-$1.75 per copy. And this is all with very little tangible expenses, other than the accountants to keep the money all straight.”
“.. the advance we were discussing was very good money for someone who hasn’t had a book published in five years and has had what could only be considered “minor” success in the writing field, if that.”
So on the one hand he is saying that the Publisher is paying very little cash up front, while at the same time talking about a good advance. It cannot be both. And as Zora says above, the editing alone would probably be ~$2,000. So assuming the advance is also about $10,000, we are looking at an advance gamble of $12,000 – $15,000 before ANY marketings is done. He doesn’t mention ANYthing about any marketing the publisher was going to do so the total cash outlay by the Publisher would likely be something like $20k.
I am in no way an apologist for this or any other publisher but this is a lot of front loaded cash. It looks to me like a combination of two things. A publisher who is unimaginative and unable to come up with some alternative negotiating deals, and a writer who can only see a red or a green light. If I were advising either I would sit down and look closely at the total advance outlay, look at each party’s estimate of the likely sales of the book in the coming three years and find a way of sharing the earnings in a fair way. Front loaded for the publisher until he received most or all of his money back and reverting to a much lower share once that happens.
I keep seeing the 70% floated for what the publisher takes in, but if the pub gets 70% and the retailer gets 30% (those are the numbers we keep seeing), what about the distributor? In Amazon, B&N, Sony and Kobo’s case they are also acting as distributor are they getting a cut for that too? Overdrive and Ingram, etc. certainly are getting a cut for distributing to Books on Board, Diesel, etc. what’s their cut (I’ve seen 10% a couple of places) and where does it come from (the pub’s cut or???)?
I see there is some confusion here about my blog post. Possibly my bad, or maybe some of you are just reading excerpts instead of the whole post.
The “$2,000” figure I was talking about was the cost of reprinting one of your older books, not a new title. The cost here involves scanning (if you don’t have a digital copy of the book handy), making any small editorial changes you might want to make (certainly not the entire editorial process all over again), formatting and designing a new cover. All of this is easily available to anyone for less than $2,000, so I doubt a publisher would spend more than that on reissuing an old title.
As far as the many other publishing expenses that a publisher will incur with a new title, again there was a paragraph you should read where I wrote that for the sake of this experiment we should consider the hardcover and softcover sales of the book as the break even point for all involved. It’s certainly not the case for all books and in other cases a book may be well into profit long before an author “earns out” that advance even on hard/soft sales and well before you factor in the e-book sales. So I was trying to take the overhead out of the equation and just look at e-book sales.
For me the long term effect of a 75/25 split in e-books looks disastrous and usury. I may be wrong and I may have just shot myself in the foot. But the day I hit the number of that advance (if it happens), then I will know that every day afterward I’ll see an extra $3 for every dollar I make. That seems like a lot to me.
As I said in my original post, I was very grateful being presented with the opportunity to get back in the game at this time (and for the record, the editor sought me out, not the other way around). But I can’t see making any deal on these terms. Forever is a really long time.
Terrill Lankford
For Howard: The lack of “tangible expense” I was talking about in the case of e-books was the fact that the publisher doesn’t have to print a book, ship it to a bookstore, share 40% of the sale with the store or possibly have it shipped back to them unsold, destined to be a remainder (then it’s shipped out again, possibly back to the same store) . That’s where the REAL gamble in publishing has always been. An e-book is a file that, once the master is generated, costs very little to ship to a customer. And very few are returned (I think you’ve got 60 minutes to do so on Amazon, for example). But if they were returned it wouldn’t cost the publisher a dollar in shipping both ways as it does for tangible books.
I’m now somewhat ashamed to say that the advance we were discussing was much higher than the one you suggest. But I should also state that it was far from a done deal. We were just talking ballpark, but the editor had agreed on a floor and it would have been up to my agent to work out the final figure (hopefully a bit higher than the number we kept discussing). And there was always the possibility that something could have gone wrong at that stage and the deal could have crashed and burned. But I no longer wanted to waste anyone’s time if that e-book rate was what they expected. Not the editor’s, the publisher’s, my agent’s or my own. It may sound arrogant to have walked away from that kind of money, but it has been my experience – and the experience of many of my writer friends – that if you don’t get a sizable advance you can forget about getting any kind of decent publicity and marketing push for your work.
Yes, if we had entered the deal the publisher would have had many expenses to consider and I’m fully appreciative of that. But writers have expenses too. And families. So I had to think of my family first. And the short money here – no matter how much it was – looked like a bad deal in the long run. I’m used to thinking of advances as expensive loans (which they are of course). It’s the “very expensive” part of it that I couldn’t quite handle this time around.