HP Competes with Google on Books - Only Smarter

Hewlett-Packard, which, aside from PCs, is a giant in imaging, is taking on Google on the book front and has thrown the gauntlet down via a partnership with the University of Michigan, one of Google's most important partners in its online book offering, because it has one of the great academic research libraries. First, check the story I wrote at BNET for the details. I really do think that HP has outsmarted Google on its own territory.

That's the view from the business and tech front, but let's consider what this means for writers. Remember that there's still wrangling over negotiations on the class action suit by writers and publishers. (I opted out, considering it a bad deal, so don't have a direct personal stake in it.) The HP announcement would seem likely to have a big impact on how the discussions are going:

• Google is going to point to this as proof that there is competition and that it's not closing things off.


• The writers and publishers should argue that the HP deal shows that there's no need to grab rights going forward.


• The judge might well see the HP deal as proof that handing over rights to so-called orphaned works (still in copyright but the rights holder difficult to ascertain or find) is bad from a market view because it would provide a sanctioned advantage to one company over another.

My short take, for whatever it's worth, is that the HP entry is going to do more to kill the rights grab than almost anything else that could have happened. On the balance, the argument becomes that there's no need for a special deal and that Google or any other company can clearly go into business looking at public domain works and that they don't need to have an extraordinary access to the intellectual property rights of individuals or organizations.

Furthermore, this gives Google a competitive kick in the rear. Since HP is doing it, why not Xerox, which is also big in imaging? Why not Amazon? IBM? It's a case where more is merrier, at least for those of us who own book rights. In fact, I'm wondering why some of the organized writers groups don't do something equal to HP's tactics. Instead of protesting, often long after the horse is out of the barn, some activity, create something practical instead. How about partnering with an Amazon or Barnes & Noble or Xerox or someone who might have the wherewithal to create a competing service. Think of it as an iUniverse that is actually effective - able to store scanned or reproduced books, create paper copies on demand, take and fulfill orders, split revenues. Negotiate with a few and use that as leverage to get a better deal out of one, rather than getting tied into an Amazon "you can have 35 percent" deal. That would be real activism, because it could be effective and makes the market system work for writers, rather than the other way around.

Image courtesy of stock.xchng user designkryt.

Poor Mistreated Ancient Roman Authors

This is just a link to a piece that should bring a wry smile to your face if you've ever complained about the publishing industry. It's at least as old as ancient Rome:

Like Martial, most Roman writers knew that the profits of their writing ended up in the pockets of the booksellers, who often combined retail trade with a copying business — and so were, in effect, publishers and distributors too. At best, the author received only a lump sum from the seller for the rights to copy his work (though once the text was “out,” there was no way of stopping pirated copies). Horace, the tame poet of the emperor Augustus, made the obvious comparison: booksellers were the rich pimps of Roman publishing and authors, or even the books themselves, were the hard-working but humiliated prostitutes. He refers to his slim volume of poetry being “on the game, all tarted up with the cosmetics of Sosius & Co.,” his publishers. Not that Horace did so badly from his writing. In the absence of royalties he was, like most of the best-known authors in Rome, taken under the wing of a patron. In fact, Maecenas, Augustus’ unofficial minister of culture, set him up in a house.

Definitely worth a read.

Check Google Books for Your Out of Print Titles

As you probably remember, Google settled the lawsuit brought by the Authors Guild and some publishers over Google Books, which displays up to 20% of the contents of out of print books online. Now you can sign up. Some notes:

• To be eligible, your work must be in their system.


• A full book gets you $60 plus the majority of revenue from ads placed around the display of the book.


• An "insert" gets paid only part of a fee. The definition of an insert is "any text and other material, such as forewords, essays, poems, quotations, letters, song lyrics, children’s Book illustrations, sheet music, charts, and graphs, if independently protected by U.S. copyright, contained in a Book, a government work or a public domain book published on or before January 5, 2009 and, if U.S. works, registered (alone or as part of another work) with the U.S. Copyright Office. Inserts do not include pictorial content (except for children’s Book illustrations), or any public domain or government works."


• If you want, you can also opt out of the settlement or file an objection or indicate that you plan to be at the fairness hearing, but you'd have to do it by May 5, 2009.


• Claims have to be filed by January 5, 2010.

Time to go check for your name and what might be up on the system. I just found out that the ASJA Guide to Freelance Writing, for which I suuppled the business planning chapter when I was still a member of the organization, is on there, so I'll be filing my claim, after thoroughly reviewing the settlement itself.

But if you do plan to get your little chunk of change, check the dates - if interested parties can file objections by May 5, there is the possibility that the settlement could be challenged. In any case, clearly no one is going to see any money until some time next year at the soonest.

Boondoggle in Google Rights Win? (Warning, Rant)

Google has finally settled a two-year-old law suit filed by the Authors Guild and five publishers. The topic? Infringed rights, of course, coming out of the company's scanning millions of library books and making them available for search. The plaintiff argument was that this was a new use of entire copyrighted works without permission.

Google is paying $125 million (making the settlement over unregistered magazine works seem like petty cash). Someone or other is supposed to establish a books rights registry, allowing people to view books in whole or in part and then enabling payment, whether from Google or the readers is unclear to me at the moment, to the rights holders. However, I'm a bit suspicious because $30 million of this settlement is going to setting up this registry.

I thought that there were at least two existing registries, one set up by the NWU and another by some combination of the Authors Guild, ASJA, and possibly others. And even if there weren't, $30 million to set this up? You could fairly comfortably fund a start-up high tech company for that period of time and get it running. This is very serious money. What the hell is it being spent on? This isn't someone else's money, folks. It's probably partly your money, if you write books. What transparency will there be in this new registry? Where is all the money going? Is Google doing all the tech work? (In which case, the $30 million becomes normal cost of doing business and hardly a win for anyone other than Google.)

By the way, this was also clearly a strategic win ... for Google. Going forward, people will buy books they want online and libraries will pay for access. Who gets 37 percent of the revenue? Google. Plus, there's advertising revenue and Google gets the same percentage of that. So for $125 million, it's probably nailed down many, many times more future revenue. This will turn out to be a pretty cheap business acquisition for them. That means the publishers and the AG have, through this negotiation, validated in a practical sense the business model of taking intellectual property of writers, making money off it, and then, if enough writers and publishers scream loudly enough, giving in just enough to keep what you established. Why should a company go this route? Because the publishers and writers are so determined to keep anyone from prying rights out of their hands that they aren't actively considering and pushing for new business models. In that view, this "victory" is completely Pyrrhic.

Another Read for Book Authors

Unfortunately, I came across an amusing concept in a Guardian blog this morning after my post for the day had already gone out, or I'd have combined these two. A novelist decided to bring in some extra cash by selling shares in his future US royalties. Though, on reflection, perhaps amusing isn't the right word. There is something sad about having to trade on your future potential because you can't get enough money to undertake your profession based on what you've already done. But there is something intriguing about the publicity possibilities in such a move. Sadly, once done, I think it would be tough to get attention a second time. All you have to do is come up with the next outrageous gimmick to get media attention on your book, which is really where you want it.

A Good Observer Blog on the Wages of Procrastination

As I'm still on deadline, but thought that the earlier post was a bit light (although I enjoyed it), here's an amusing post on the Guardian's book blog about publishers demanding repaid advances for books never completed and the important role procrastination plays in the life of every writer. (Well, maybe everyone other than Joyce Carol Oates.)

Random House Pushes Out of Print Definition

A reader forwarded an email she got about new problems with Random House contracts:

Society of Authors deputy general secretary Kate Pool said her major concern with RHG's new boilerplate was an out-of-print clause allowing rights reversion only if the publisher cannot supply a physical or electronic copy of a book within a month, or if there have been no royalty earnings for a year. The author body plans to raise the issue with RHG.

Pool said: "Random House could long since have given up actively publishing your book, it could have sold one copy a year for the past three years, and take three weeks to produce a print-on-demand copy, but you can't terminate the contract. We can see e-books are another way of reaching readers, and that print on demand for old titles has advantages, but this is a way that publishers can sit on rights for years on end."

As the information was from an article in the Bookseller, it referred to English authors. However, that doesn't mean that Random House isn't doing the same in the US. The publisher is apparently also pushing for more aggressive "high discount" provisions. Although there aren't enough details to tell, my guess is that the company is trying to set high discount provisions, which are a trigger for significantly lower royalties to authors, at levels that would be far more easily hit.

I'm not a member of the Authors' Guild (though I keep meaning to join) - anyone hear anything similar from AG about Random House in the US?

Authors Guild Warns About Simon & Schuster E-Book Letter

The Authors Guild has sent a message to its members, warning that Simon & Schuster is trying to get many of its authors to sign an e-book royalty rate amendment to their contracts. They're trying to "set those rates at 15% of the 'catalog retail price' of the e-book." The organization suggests caution:

1. Discuss the amendment with your agent or attorney, if you have one.

2. Depending on your existing contract with Simon & Schuster, the amendment may grant the publisher rights that you've otherwise retained.

3. Be aware that the amendment may affect your ability to obtain a reversion of rights.

Furthermore, the Authors Guild thinks that 15 percent of retail price will be "the low-water mark for e-book royalties." The reason is that the publishers virtually no costs in warehousing, printing, shipping, or handling. My guess is that e-books probably strip a good $2 to $3 from the actual cost of a given title. (And if any publishers read this and disagree with my estimation, I'd be glad to hear the arguments on how it should change and why.)

However, I think we all have to keep aware of the broader economic issues that are happening. Yes, costs for publishers drop, but if Amazon has its way, so will the money that the publishers get in the first place. And by no means am I suggesting that S&S has got the best interests of the authors in mind. If they are trying to set the amount at 15 percent, I suspect they are trying to offer something that sounds generous compared to print royalties, but that leaves more money in their pocket. If you figure a $20 cost for a trade paperback and 50 percent discount, that means the publisher is saving maybe $2 on income of $10, which is an additional 20 percent in available profit. Instead of 15 percent, an author might reasonably get 20 or 25 percent of the sale price.

But read about the prices Amazon is charging for big titles. It's very little compared to print prices - even though Amazon itself is also saving lots in the new format - and the company is taking aggressive portions of the money that comes in. That's why they're pushing on the Kindle so hard. Should other e-book readers come out and become popular as well, there might be multiple formats and outlets, meaning far less ability to twist arms. If the publishers are forced into taking $5 to $7 for a title, there's a whole lot less money now available for all of us.

Writers' Rooms

Ever wonder where such writers as Bernard Shaw, Lord Byron, and Virginia Woolf worked? The Guardian has a writers' rooms feature online with pictures of said roosts. If you need a distraction but want to justify the tangent as research into efficient working, this should provide a few minutes excuse.

Book Promotion 2.0

Author Dennis Cass has a funny video on Youtube.com about an author hopelessly trying to get with internet promotion of his work. So smartly depressing that you can only laugh.

More on Movies, Net Profits, and Authors

Well, I've just been pointed to another LA Times piece that goes over the numbers a bit more:

• Olivia Goldsmith, author of The First Wives Club, was paid $250,000 for the movie rights, although worldwide gross for the film was reputedly $181.4 millon.


• Winston Groom was promised $350,000 and 3% of the net profit for the movie rights to Forrest Gump. He got ... $350,000.


• Alice Walker, who was supposed to get 3% of the gross for the movie version of The Color Purple, eventually got something, but only "a fraction" of what she thought she was owed.


• Art Buchwald sued Paramount Pictures for what he said was theft of the concept from his treatment for the idea of Coming to America. He won in court, after being told by the studio that although the movie grossed $350 million, there wasn't any money to pay net profits. Must have been a catered lunch or two that put them in the hole that completely.

The story has a great quote:

Ernest Hemingway once noted that authors should drive up to the California border and throw their books over a fence while studio officials throw bags of money back over the fence. That, he said, should be the end of the transaction.

Story of a Blockbuster

The Wall Street Journal had a story last Friday (which may or may not be available depending on when you look at this and if you have a WSJ.com account) about how Viking used a series of calculated moves to turn "Eat, Pray, Love" into a best seller when it finally came out as a paperback from Penguin, another imprint owned, as is Viking, by Pearson.

If you can get a hold of a copy of the article, it's worth reading to get a sense of how publishers are trying to change their marketing, and how they approach the business. Note this bit:

The vast majority of books face a tough reality. New releases that fail to take off in the first couple of weeks -- when publishers often pay to place copies on stores' front tables -- are relegated to the back shelves.

That sentence alone is worth a wow. Up until now, I thought the usual practice had become a month on the shelves and three months of publicity and marketing. Apparently I've been over-generous. The only way this changes is if the publisher thinks the book has break-out potential.

That means a number of things. One is that platform, which has become a heavy stone crushing the chests of many authors, is becoming every more weighty. And the early reception to the book is critical. "Eat, Pray, Love" got an excerpt in O and a cover article in the NYT Book Review. Here's another reality check:

Each month Penguin publishes 15 to 20 fancy "trade" paperbacks -- high-quality editions that are larger in format and easier to read than their cheaper, mass-market cousins. But it only really lends its weight to one or two.

This is like literary Calvinism, only with clear proof of predestination rather than theological speculation. Penguin, in this case, invested in freestanding store displays and ads, and the marketing person in charge asked everyone in sales and marketing to read the book, so they could effectively convey enthusiasm. And now for the "beautiful author" part, as I mentioned in my writing and literature blog:

Selling Ms. Gilbert, the author, was just as crucial. Unlike many writers who don't like touring and are uncomfortable in front of crowds, Ms. Gilbert has a sunny, upbeat personality that plays well on television and in personal appearances. Notes Ms. Court: "When the writer of a book is attractive, generous, and funny, booksellers end up rooting for her."

Then it was touring, getting book club traction, and so on. Here's another tidbit that tells you how sales work these days in moving from hardback to paperback:

"One of the mantras of publishing economics of the 1970s and early 1980s was that mass-market paperbacks could achieve 10 times the sales of a hardcover," says Stuart Applebaum, a spokesman for Bertlesmann AG's Random House Inc. Then retailers started discounting hardcover titles, and the smaller, cheaper paperbacks lost ground.
Laurence Kirshbaum, a book agent who heads up LJK Literary Management in New York, estimates that the current ratio between hardcover and paperback sales is one to one -- mostly because so many hardcover books are so steeply discounted. "These days the bulk of the people who are interested in a book buy it in hardcover; that's what makes titles such as 'Eat, Pray, Love' so exceptional," says Mr. Kirshbaum. "They are throwbacks to the days when paperbacks sold huge multiples of the hardcover."

In case this isn't sinking in, most book authors don't have a snowball's chance in hell of mass market success. That means you have to find a different business model, and fast - one that doesn't rely on big publishers and traditional marketing, and one that doesn't leave you trying to eke out a living from a relatively tiny royalty.

Emerging Term on Agent Contracts

Book authors have directly felt the pinch of falling advances for a time. Royalties are all well and good, but the vast majority of titles don't earn out, which means that the money you see up front is likely to be all that ever comes your way.

But now there seems to be the possibility of a secondary bite. A writer had asked if I would review an agency contract. One of the interesting terms was in the commission section. If the book didn't sell for more than an $X advance, then the commission automatically jumped from from 15 to 20 percent.

There are a number of problems, here. One is that the agent is supposed to get the best deal possible. This clause can actually give the agent a disincentive to get the best deal possible when things are borderline. Let's pretend that the point at which the commission changes is $10,000 and a publisher has offered $9,000. The agent has done work with the publisher before and knows that it might be possible to get the advance up to $11,000 with an accommodation elsewhere in the contract. But work out the numbers: 15 percent of $11,000 is $1,650, and 20 percent of $9,000 is $1,800. It pays the agent better to take the deal that is poorer for the writer. Of course, the author wouldn't know that $11,000 would have been a possibility. The net amounts to the author are even worse: $7,650, versus $9,350.

Then there are other considerations. If the book does really well, the agent is now getting 20 percent of all additional money, and not seeing a drop in commission for what the writer and publisher have actually pulled off. Such deals become even more problematic when you're looking at the series books, where the advances really do hover in this range - and it's in this range that I've seen the demand for a commission escalation. I'm sure some agents would say that they can't make a living doing 15 percent deals at such money levels. I'd counter that the authors don't have the luxury to move to more profitable projects once they've locked into the one, while the agent can go sell other properties.

If you get a contract from an agent and see this sort of provision, I'd strongly advise against signing the paper, and even reconsider whether you want to do business with an agent who isn't willing to take his or her share of the selling risk.

The Fallible Book Excerpt

The New York Times had yet another article on book marketing, this one on whether book excerpts help sell the titles. It's another facet of what I covered in my Book Blockbusters article. It comes down to the subtle and treacherous world of publicity. Contrary to popular opinion, not all press is good. As the article points out, if there is one major revelation to be found in a book and that finds its way into the excerpt, then you've just killed sales. Here are two paragraphs of the article that give a good summary:

Because the excerpt is just one weapon in the publicity arsenal, publishers are hard-put to assess its role in the campaign. Still, they can point to recent successes like "It Ain’t All About the Cookin’" by the restaurateur and Food Network host Paula Deen, which was serialized in Ladies’ Home Journal and hit the New York Times best-seller list immediately after publication.

On the other hand, Time magazine’s excerpt of "I Am a Soldier, Too: The Jessica Lynch Story," by Rick Bragg, put a dent in book sales, according to Mr. Bogaards of Knopf. "The excerpt gave away too much — I think people felt they’d had their fill," he said. "We sold 175,000 in hardcover but had expected to do twice that."

Publishers in the past were motivated to place excerpts because the money for them could hit $100,000 - and that's the equivalent of a lot of copies at one shot without the actual cost of producing them. Yes, writers get a big chunk - sometimes 90% of such serial sales - but that's still a lot of cash for a single book. When the magazine paid big money, they wanted big and juicy parts, sometimes even taking a bit here, some there, and putting them all together, even if they've given away important parts of the book.

Now the fees are less and the benefit less obvious. As the publisher of Hyperion was quoted, "For $1,500, why risk exposure of all the juicy bits if it’s going to hurt sales?" That's pretty short money, which means someone will have to explain why this is all a good idea and just how many copies moved as a result. For authors the point is clear: You have to take significant interest in the marketing of your book, because there are so many ways it can go wrong. So much habit, so little desire to do something new, which only shakes up the status quo and leaves everyone at the publisher feeling less comfortable. Oh, and then the entire marketing department is so overwhelmed with work and titles and lack of resources that all they can do is plod along like automatons. If you're not keeping watch, there's little chance that anyone else will.

Breaking the Book Blockbuster Bane

I have a new article up on getting smarter about book publicity that came from a post I had at ASJA that a number of people found useful. Hope it's useful to you as well. Look under Resources to the left, or click here.