Writers' Rights Hitt Woman

Emma Hitt is the medical writer who runs The HittList, a free subscription email sent weekly with info about staff and freelance science and medical writing and editing work. It sounds as though she's a freelance writer, and so should understand the concerns of those in the business. On the front page of her site there is a notice about a "$1500 prize for a true story about your experience as a freelance writer or your experience hiring a freelance writer." Apparently she's putting together a book on freelance writing and is looking for material. Well, fine, sounds like a Chicken Soup for the Soul type of formula; get writers to tell their stories, collect said stories, edit and publish for a profit. But get this clause (because the entry form is technically a contract):

Note: all entries will be considered for inclusion into a book about freelancing. By entering this contest, you agree that the piece can be published in this book after the final edited version has been cleared with you and that you relinquish copyright of your piece. You also acknowledge that the piece is true, not embellished, and has not been previously published. You will receive a free copy of the book if your piece is included in the book. Please do not submit your entry if you cannot agree to these conditions.

So, I send in a story based on my own experience and whether it's selected or not, I'm expected to give away the copyright? And only one of the entries will win the $1500 prize? That is ridiculous. Hell, she could be this rapacious and simply ask for non-exclusive anthology rights to include a piece in her book (and leave it at that), though I'd consider that outrageous as well. If there's not enough money to pay the people who actually create the content, why should anyone make money on the project? It's bad enough to see some Craigslist bottom feeder trying to get something for nothing, but someone who not only is a freelance writer but who runs a job list for writers ought to know better - and ought to act better.

Amazon Buys Book-Centric Social Network

Writers trying to understand the book marketing and various commercial forces within it might do well to read about Amazon's acquisition of Shelfari. It's a social network for book fanciers and, clearly, a potential indirect (or even direct) marketing outlet for Amazon.

As I mentioned before, Amazon also bought AbeBooks, which gave the former a stake in LibraryThing, a Shelfari competitor:

This resulted in an awkward scenario - while Shelfari and LibraryThing are similar and could conceivably be merged by Amazon pending a dual aquision, there is bad blood between them. LibraryThing’s founder has openly criticized Shelfari for spamming users and astroturfing blogs, and generally behaving as a “bad actor”.

It might be that Amazon will cut LibraryThing loose, or it could try to fully acquire it as well and merge the two services together.

What is clear for authors, though, is that the market - in a broad sense, running from production to consumer marketing and distribution and sales - is being tied up by Amazon. I think this is a bad situation for any who want to make book writing a part of their businesses. The more concentration in one set of hands, the more control those hands have. If those hands happen to use spamming and other techniques that annoy users, the results could spill over onto the authors.

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 Must Read for Book Authors

I literally just finished going through the Businessweek article, The Online Fan World of the Twilight Vampire Books, and cannot reccomend it strongly enough to anyone writing fiction or nonfiction books. This is a story of a woman who used online intelligently and imaginatively:

Meyers success isnt due simply to her vivid imagination for vampire romance. She also figured out before almost anyone in the book industry how to connect with readers over the Internet and inspire them to build on her work. Since Meyer published the first Twilight book in 2005, she has reached out to readers on social networking sites, such as MySpace (NWS), and participated in online discussion groups. Fired-up fans have championed her books on Amazon.com (AMZN) and set up their own sites, such as Twilight Lexicon and TwilightMOMS. That has helped propel sales of the series to 7.5 million books. "Other authors have pockets of fans online, but nothing to this extent," says Trevor Dayton, a vice-president at Indigo, Canada's leading bookseller. "Stephenie Meyers Twilight series is the first social networking best seller."

To be fair, her publisher, Little Brown, saw the possibilities and got behind her first novel, as it paid $750,000 for a three-book deal. But that could have flopped. And it's not as though she was a trained marketeer. Instead, Meyer started taking up opportunities that presented themselves. Will every book pushed online do this type of business? Absolutely not. Run quickly from any "silver bullet" solution to your marketing needs. However, the example shows how it is possible to go beyond what the publisher alone can or will do.

How Many Kindles Have Sold? Almost a Quarter Million

Through an inside source, the blog TechCrunch has a lead on the number of Kindle e-book readers that Amazon has sold: 240,000, which turns out to be a lot of money -- probably over $100 million though some estimations that I found reasonably done. Over the next year, estimates of how many more Kindle units that Amazon will sell seem to be running between about a half million and upwards of 750,000. It's hardly the whole book buying public, but this shows a readiness of many consumers for electronic book reading. That will affect publisher and, therefore, author business strategies.

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.

Where Have All the Book Editors Gone?

I came across a Stuart Evers blog entry in the Guardian about the new role of editors at book publishers:

These days, experience of shaping, honing and bringing out the best in an author is unnecessary to land a high profile role: all you need to be able to do is identify the product.

It's a sad observation, but has a lot of truth. I know editors who get frustrated with the entire process because they don't get to edit. All they can do is hope that the book comes in well enough constructed that they can free up some time for the market analyses and major manuscript resuscitations that are necessary. So here's my question: if editors don't get time to really edit and the authors have to do a lot of the marketing, then what is it that publishers really do?

Market Analyst Suggests Explosive Growth for E-Books

Many of us have been wondering just how e-book sales, particularly with Amazon's Kindle, have been going and just how they could change the industry landscape. There's an article on that very topic:

Pacific Crest analyst Steve Weinstein argues that global e-book sales at Amazon could reach $2.5 billion by the year 2012.

To figure this, Weinstein starts with the handiest analogue: iPod and MP3 player sales. He notes that between 2003 and 2008, digital music sales grew from 2 percent of the US market to 33 percent, largely on the back of Apple's ( NSDQ: AAPL) twin offerings. He doesn't expect the Kindle/e-books to track as fast, but he does think the market is off to a strong start already, and that the cycle will pick up steam as the Kindle comes down in price (that's already started) and the ecosystem matures. He also suspects the consumers will be drawn to the instant gratification aspect of Kindle titles, as well as the lower price per book.

MP3 music and e-books aren't exactly the same. People had wanted to buy single tracks for years and not be forced to purchase an entire album for one or two songs. However, they are analogous and the logical is reasonable, I think. Read the article and pay particular attention to the projections he's making for Amazon's profits. Part of that comes out of far lower costs (no manufacturing, warehousing, or shelving), but I wonder how much would come out of the pockets of publishers and authors.

Book Authors Must Get Ready for Instant Books

The Guardian had an article the other day about UK bookseller Blackwell's plan to install print-on-demand systems throughout their 60 chains - right now 40 pages a minute, but eventually 80, meaning that a buyer could get any of the million titles available in about 4 to 8 minutes.

As with most technological changes, there are ups and downs. The pros for authors is the ability to keep books available at stores, where people are doing their buying. Yes, a majority of book sales happen outside traditional bookstores, but don't knock that big an audience. Even if your book isn't on the shelf, there's a chance that someone could find it.

But now for reality. This is going to be a big marketing onus on the writer. Publishers barely support a brand new book in its first three months of life, so who is going to create buyer awareness of your title? You are, or else you aren't going to get sales off these machines. And for how long does the publisher get to keep your book on the backlist? Have you checked the out-of-print clause in your publishing contract recently? It may be that so long as there is one edition - like a print-on-demand one - the publisher gets to keep the title as active. But if you get the rights back, is the book even going to be in the system? How easily can you get another version ready?

There are no set answers, just questions that require some thinking for those of us who want to make a living in this industry.

Contract Review: Adams Media

Here's my take on the latest Adams Media contract I've seen - and remember, I'm not a lawyer, this isn't legal advice, and always try to negotiation your contracts:

• First Paragraph They are calling the “Work” everything including the final draft, all interim drafts, and all drawings, photographs, and so on. This will cause a complication in about 14 seconds.


• Section 1. Acknowledgement of Rights. They want this to be work made for hire, which means once you’re done, you can never make another penny off it. They own it and can do with it as they like. That’s bad enough, but now for the problem I mentioned: The definition of work in the previous graph means that they’re not just talking about the finished product, but everything leading up to it, and everything in it. What if you use photographs from a collection with permission or want a drawing done? They want to own it, so they want you to get a copyright transfer. But what if the person with the rights isn’t willing to do that? There is no provision for having a permission form that is anything less than copyright assignment.


• Section 2. Right to Publish Work. They’re reiterating that they have all the rights and can do with this anything they want, and that you cannot.


• Section 3. Delivery of Manuscript. They've been known, as many other series publishers have done, to set deadlines assuming that you will send in material even before you’ve had a chance to see the contract. I’m a firm believer that all dates in contracts should be based on when they are signed, or at least when you got to basically agree to the deal. If you use photos, note the format in which they want them delivered. There is no allowance for digital photography, so technically, if you wanted to include a color digital photo, you’d have to get it turned into a slide.


• Section 4. Originality of the Work. It’s understandable that they don’t want plagiarized material, and they can use every means to make sure it’s original (though “every means” is too broadly stated). But there’s a bigger problem here: “At its sole discretion, the Publisher may deem a Work as containing plagiarized content, and therefore unacceptable, and may cancel this Agreement at any time, requesting return of all payments made to date.” Their sole discretion? In other words, they can declare you to be a plagiarist unilaterally, and you wouldn’t necessarily have any recourse to challenge the statement. How did they come to the conclusion? Where is their evidence? No mention of their having to produce any of that. At worst, this could become a club brought into play at any moment.


• Section 5. Revision of the Work. The first sentence, “Author shall promptly make such changes in the Work as the Publisher may request,” puts a time onus on you. They can ask for any change, you have to make it, and nothing about working under a “reasonable” schedule.


• Section 6. Publication of the Work. They can use your name and likeness and bio and authors others to do so in the process. However, there isn’t anything saying that they must give you credit. In fact, the last sentence starts, “In the event the author is credited on the cover…”


• Section 7. Background Information and Permissions. If you have people listed in photos, you may have to get them to sign releases, as well, which could be logistically impossible in some cases.


• Section 8. Verification of Facts. If you mention any facts – and who would do that in a non-fiction book? – you technically have to verify them all and give the “checking material” to them.


• Section 9. Author’s Warranties and Indemnity. The warranties are broad – you cannot write anything that, if published, will infringe rights of privacy or publicity, infringe copyright, or be libelous. Now, the contract is interpreted under Massachusetts law, so you could claim to be a journalist, which gives you more protection than the general populace gets. However, if you are mentioning others that are not public figures, you might well get releases from them to be safe. The indemnification is a problem because it has the phrase, “or any allegation which if true would constitute a breach.” In other words, if someone makes a claim of some injury that would be a breach of the warranties, you are indemnifying the publisher, even if you didn’t do anything. That sort of language is a deal-killer for me.


• Section 10. Compensation. They really are cheap bastards, aren’t they? Notice the last part: “The Author may also receive a fee for publicity appearances, if such appearances will be deemed necessary by the Publisher in writing.” It should be a reasonable request and you should be able to turn it down. They own the material, for heaven’s sake, so why should you be at their beck and call?


• Section 11. Termination. Subsection c is a problem, because they can terminate the Agreement at any time, “at its sole discretion,” before they formally accept the Work. That is ridiculous – they can kill the deal for any or no cause. The publisher also has complete control of whether it will let you keep anything or if it will pay you anything beyond what you had already received. If they decide to pay you what they think is a proportional amount, then they get the rights to what you have already written.


• Section 12. Independent Contract. This is pretty straightforward.


• Section 13. Notices. Again, straightforward and self-explanatory.


• Section 14. Waiver or Modification. Also straightforward.


• Section 15. Applicable Law. The contract is governed by Massachusetts law.


• Section 16. Arbitration. The arbitration clause is problematic. Not only does the process potentially eliminate such basic protections as discovery, but this clause doesn't even state which of the dozens of sets of rules of the AAA would be used, how many arbitrators would be involved, or how the arbitrators would be chosen. Arbitration is also a lot more expensive than most companies think, and depending on the rules, there can be hefty minimum dollar amounts that you can raise. And if you found they breached the contract and you had to take legal action, you might not want to travel to Boston for their convenience. Trying to get this clause struck would be wise.


• Section 17. Assigns. You cannot assign any of the work on this without getting written approval from the Publisher. I’d argue that it would cover research assistants and any other help that you might ordinarily use (or not).


• Section 18. Author copies. Self-explanatory.


• Section 19. Entire Agreement. This is the whole agreement, so don’t expect emails or verbal assurances from anyone at the publishing company to make any difference.


• Section 20. Notices and Payments. This clause generally says that money will be paid to the agent, and they can also have terms about the size of the agent’s commissions. Be sure that there is no conflict between what this says and anything you’ve previously signed with the agent. If this states something higher, then the agent now gets more. Generally, if I’m using an agent, I might direct money to be paid to the person (though I prefer having two checks cut – one for the agent and one for me), but if all the money goes to the agent, take out all the business about how much the agent should get. The agent isn’t a party to this contract, and, presumably, you already have an agreement with the person.

That’s about it – not a great contract, particularly with having to sign over the ownership at relatively low rates of pay.

Some Additional Views on the Kindle

The Kindle gets press because Amazon is such a big name that has shown it's not afraid to bully publishers and authors. In fact, if the product really takes off, publishers are going to have an enormous problem; so far as I know, you can only get compatible content through Amazon. I think it's clear that the company wants to become the Apple of downloadable music: Make the device that people want and become the only significant source for satisfying your content cravings.

There has been some additional press on the Kindle since the Book Expo America (BEA) in LA a week or so ago. Paul Krugman in the NYT thinks that a predominantly digital e-book model will drive book prices down to nothing, where they become something you give away to promote other activities, like bands making money on touring, licensing, and merchandise. Danny Hatch's Business Common Sense blog had an entry about the Kindle and Jeff Bezos's pitch for it at BEA. Apparently Amazon claims that the Kindle actually increases print sales:

According to his research, for every e-book bought, Kindle readers buy printed books as well. Kindle increases purchases (e-books plus printed books) by a factor of 2.6.

Who knows what would actually happen? What I do know is that people tend to use forms of communication that work best for particular reasons. Sending e-mails can be fine, but don't replace all uses of the phone. Instead, you could argue that people used to use the phone for virtually everything because it was less of a time sink, but that it wasn't really practical for everything, like having a record of an exchange. Many types of reading you do in a book don't work well on a screen - at least in my experience, and I've been reading heavily from screens for about the last 25 years, literally.

There are some other potential impacts on the book business that the Bezos presentation suggest:

• Amazon wants every book in print available as a Kindle title, which they admit is a big copyright issue. As Hatch notes, is it worth making a Kindle version of a niche title that sells little? That's a tricky question: some, like Chris Anderson and his idea of the long tail, might suggest that digital was the only way to go in such cases. Maybe that type of title is only available electronically, or for POD. That would suggest to me that POD vendors would have to find ways to directly print from popular e-book formats so there isn't double production work.


• Bezos touted how titles never go out of print, leveraging that long tail idea of bringing in money with no investment in inventory or story. POD could offer the same, but in either case you must ask how your book contract reads, and when a title goes out of print and rights revert to you. You're going to want a minimum - maybe 500 or 1000 copies a year - on the number selling via e-book and POD combined. Anything under that triggers the out-of-print reversion clause. But if you don't get such minimums in a contract, you will be stuck for the 35 years it takes, at least in the US, for you to be able to legally recall all rights.


• The Kindle only shows four shades of gray for now, so books depending on illustrations and colorful displays might only work in print. If you don't like the e-book route, that is something to consider in your conception of the book.


• There is built-in audio, so it could become an audio book player as well. (And why not music?) Authors might want to revisit the licensing out of audio book rights, as they might become more important.

One more point that should be read in its entirety:

A member of the audience asked Bezos if Kindle would change what authors and publishers do? “Wait and see,” was the reply. For example, Kindle could revive the old Charles Dickens model of publishing serials—or partsworks—that come out in sequence. Also, unlike printed books, if statistics change, the new material can be inserted, so that the Kindle book is always current.

And it's back to Krugman's point that things could change for authors. No more second editions, for example, which would mean an end to significant continuing revenue for some authors. As for the Dickens idea, where would the parts come out in sequence? That worked for him because he could publish the books in parts in newspapers and then reissue them as full editions. But with newspapers dwindling and magazines feeling the crunch, what would the outlets be? And how about the other major part of Dickens's income - lectures and readings? Are you ready for lessons on how to effectively read on stage and therapy to deal with issues of stage fright?

Some overtly happier thoughts: when people download books, they probably cannot return them, as with buying software or music. Also, publishers no longer have the "returns" issue that makes them and their authors crazy. Can you imagine a royalty statement with no need for reserves against returns?

It could be a different world, indeed.

Contract Review: Jenkins Group

Jenkins Group creates ghosted books for its clients. Given their volume and the number of writers they use, I thought it would make sense to post a review when I finally saw one of their contracts. Please remember that I'm not a lawyer, this isn't legal advice, and negotiating to get better terms is always a good idea:

• Section 1: Services to be Rendered In this section, the definition of work seems overly broad and, as I'll point out in another section, potentially confusing. It's not just the writing, but any ideas that you come up with as well as moral rights, which doesn't matter if you're a US writer because you don't have them. (It's a set of rights in the EU and some other places that provide protection for misuse of a person's work as well as of the creator's reputation.)


• Section 2: Schedule This is straightforward - you'll use the schedule in a project assignment form.


• Section 3: Grant of RightsHere is where things get confusing. You don't sign away copyright and this isn't work made for hire in this section, which would be refreshing for this type of project, except that you have to sign over rights in a later clause. But here, you're providing worldwide book rights exclusively to the "work" - which in this case means more than the drafts you turn in. How you have book rights in an idea just doesn't make sense to me. Would it mean that you couldn't write another book about the idea? I'm not sure that is the case, because book rights are a concept within the broader concept of copyright, and ideas do not enjoy copyright. So I suspect that it would not prevent it. Also, note that this leaves you free to use the material in articles, etc., so long as the writing doesn't appear in another book. Other than the confusion, this is pretty easy going.


• Section 4: Fees and Expenses This is clear - fees are specified in a project assignment.


• Section 5: Payment Fee schedules are specified in a project assignment, so it's tough to say at this point whether what they want is worth what they give in return.


• Section 6: Warranties and Indemnification Subsections A, B, and C are pretty straightforward. In D, you have to agree that you won't do a whole bunch of things. Luckily, the last clause in the contract specifies that the agreement is interpreted under Michigan law, so if someone sued in, say, the U.K. for libel, to be in breach of these warranties, I think they'd have to prove that the libel rose to the level required in the US and, specifically, in Michigan. That keeps you out of a lot of trouble when a contract effectively makes you consider any set of laws anywhere. If F, it would be better if indemnification was only invoked by the warranties, which is a traditional and reasonable approach. Any other alleged breach would be considered as a normal contractual dispute, and they certainly aren't offering to indemnify all of your expenses and costs if they breach any part of the agreement. G is a welcome sight, as you expressly are not responsible for what the client does.


• Section 7: Relationship of Parties This, too, is straightforward.


• Seciton 8: Ownership of the Work OK, now things get really confusing again. On one hand, this is WMFH, and yet they're still asking you to provide worldwide book rights, which, under this section, you clearly cannot do. Also, if doing WMFH on a ghosted book is acceptable to you (and it's hardly the only way copyright is handled under such circumstances), then it should be for the final version only, and not ideas, et. al. However, the assignment letter can state that notes, sketches, etc. would be yours, so it's something to negotiate. Better not to have the default be that it belongs to the client, though.


• Section 9: Releases
  It's reasonable enough for you to get releases, but what if you've been asked to incorporate some material by Jenkins or by the client? Then you should not be responsible for getting the rights, nor for any fees involved in doing so.


• Section 10: Arbitration They probably think that arbitration is good because it typically favors businesses, not individuals. However, arbitration can be more expensive than people realize (you're hiring lawyers and judges or trained mediators). The clause doesn't state which of the dozens of rule sets that the AAA has will be used. It doesn't state how many arbitrators will be involved nor how they're chosen. And it forces you to go to Traverse City, MI for any such dealings, unless it's for under $1,000. So, if they're very late in paying you and owe you $1,500, you cannot go to small claims court, and you can't sue them locally. You have to get arbitrators, and you may not get your fees reimbursed.


• Section 11: Term and TerminationIt's normal to have a breach cure provision as the one in here. But now combine that with the earlier clause about indemnification. If you "cure" a breach they claim, then you've effectively admitted that you did breach some part of the agreement, which would mean they could pass on their "costs," apparently without a limit.


• Section 12 There is no section 12 - they just skipped from 11 to 13.


• Section 13: Severability Again, this is pretty standard - having one part of a contract tossed doesn't mean that the whole thing goes out the window.


• Section 14: Miscellany Just some additional stuff, including having things governed by the laws of Michigan, as I mentioned before.

"On the Media" On the Book Business

If you write books, or want to, then you should read the transcript of a May On the Media broadcast. The NPR show about the media business spent some long minutes discussing the dynamics of the book industry, starting with where the books sell. For example, did you know that traditional book stores, whether chains or independents, only account for 40 percent of book sales? Online is important, absolutely - Amazon represents 11 percent of all book sales - but so are airports and Wal-Mart and toy stores and craft stores and Williams Sonoma. If your publisher only goes after bookstores, then it is not doing its job of getting copies out there.

As you likely know, there are fewer and fewer traditional outlets for book reviews and news. Newspapers have cut back terribly. So you need to find the gowing alternate routes: online reviewers and book clubs (And Oprah if you have any chance, because who else could cause about a million copies of Anna Karenina to fly off the shelves?). The probelm is the volume of books coming out each year is staggering: between 200,000 and 300,000 if you include self-published titles. Twenty or thirty years ago, that number was more like 50,000. It's like being in a room of screaming people. Who will catch your attention?

Jonathan Band, an adjunct professor at the Georgetown University Law Center, had the single-best explanation of what Google Book Search could do for the publishing companies and authors:

It will make books more relevant than they are today. Because right now, a lot of students, when they are given a research assignment, they just go to Google or another search engine. They don't see books, because books are invisible on the Internet.

I had never considered that, but that point alone could change my attitude toward books on Google.

The entire dynamic of how people consider books is changing. The show brought up the example of Touching the Void, which had sat around doing nothing for many years until Into Thin Air became hot and Amazon's automated suggested selling promoted the former during sales of the latter. Bang: best seller.

Back to the beginning: if you want to write books, then you need to read this transcript, because you have to get a sense of how far the reality of the book business might be from your preconceptions. That is, unless you have a trust fund or have no life and can afford to write books during all your "free" hours.

News on Regnery Publishing and a Contract Tip

The following comes, with permission, from the newsletter that publishing attorney Anthony Elia has started. Five writers had brought suit against Regnery Publishing, a conservative publisher, alleging that the parent company:

...entered below market value deals with other wholly owned subsidiaries of Eagle Publishing - in some cases transferring the books at or below cost. Because the authors' royalties were based on a percentage of funds received by Regnery and not on sales by the subsidiary, the authors lost royalties as a result of the shuffle.

In addition, the suit claimed that the company was diverting sales from retail markets to its own subsidiaries, again lowering the royalty payments. The suit was dismissed. Why? Because the contract obligated any dispute to work through arbitration.

Folks, this is not the first time writers have alleged such things, nor will it be the last. I remember a case a few years ago when a book publisher was selling at a steep discount to the distributor that it owned, again artificially reducing the royalty amount. You've got to read your contracts and, in the case of something as complex as a book contract, preferably get a lawyer to go over them.

Anthony's current issue (you can sign up for the newsletter at his site, linked to his name above) also has a tip on language to include to find out more about what happens in subsidiary rights deals.

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.

Call for Amazon Boycott

YouWriteOn.com, a popular UK site for new writers, run by the UK's Art Counsel, is calling for a boycott of Amazon. Apparently Amazon is expanding its punitive efforts beyond just the arm-twisting to force publishers that use print-on-demand technology into buying the services only from Amazon's own offering, which is anti-competitive and an attempt, in my view, to force monopolistic vertical integration into the industry.

Now, at least in Britain, the company is angry with publishers selling their own wares at a discount on their own web sites. To be fair, such channel conflict - when the sources of product undercut the price of a reseller - is considered by retailers to be poor behavior. After all, the reseller cannot possibly match the price of the vendor. But there is talk that Amazon may move beyond what I think might be reasonable dislike of the practice:

There are fears that Amazon may retaliate by regarding a publisher’s online price as the recommended retail price and applying its trading terms to that. If a publisher discounts a £20 book to £15 online and Amazon has a contract for a 50 per cent discount on the full price, Amazon would pay the company £7.50 instead of £10. Publishers say that this would be unfair and could ultimately drive up prices.

In addition, there are more rumors over what Amazon is demanding from the POD publishers whose buy buttons it has disabled:

One source claimed that the online seller recently removed the “buy buttons” from a book on its website to prevent users from being able to purchase it. “They then went to the publisher and said, ‘Give us an extra 2 or 3 per cent or we won’t put the buy buttons back’,” the source said.

An Amazon spokesman said: “It is speculation. We never talk about discussions with suppliers.” He declined to comment further.

So when will the pressure start ratcheting up in the US? Maybe it is time for all of us to take our purchases someplace other than Amazon - and to email Jeff Bezos (email address from Small Publishers Association of North America, or SPAN, whose executive director sent this email) to let him know how many people in the industry are distressed by his company's actions.

B&N Offers Web Site with Free How-To

How-to book authors, take note: Barnes & Noble has a new web site called Quamut.com that offers free advice and help to users. They commission pieces, have them edited and fact-checked, and add photos and drawings to make them clearer:

“Quamut.com positions Barnes & Noble as a leader in digital how-to publishing,” said Dan Weiss, publisher and managing director of Quamut.com. The company simultaneously publishes all content in two formats: as HTML content and as downloadable PDFs. In some cases, Weiss said, Quamut guides are also available as a four-to-six page laminated printed charts, available for purchase at Barnes & Noble stores and BN.com.

The business is supported through three revenue streams: advertising through display ads and Google AdSense, the sale of full-color PDFs ($2.95), and the sale of laminated printed charts ($5.95 each). Many ads on the site are for books related to the subject at hand; for instance, the guide to stretching features an ad for books about stretching, with the line “Learn more with these titles from Barnes & Noble.”

This can't be good news for the many authors who write for the how-to series books. Even if the pieces are short (the downloadable PDFs generally run from 2 to 8 pages, many people buy how-to books to learn something specific. Break it out and you suddenly don't need the entire book - and I'd bet that the Quamot authors aren't getting royalties on either advertising or downloads. Or maybe I'm getting it wrong, and the free material online does just the opposite - sets up an interest in buying the book. B&N advertising full titles on the pages with the how-to content.

More on HarperCollins Move Away from Advances

Last week I mentioned that a new division of HarperCollins was looking to move to profit-sharing rather than book advances and to change the crippling practice of liberal return policies for bookstores. I've read some additional reporting by Jeffrey Trachtenberg in the Wall Street Journal (requires paid subscription):

To be headed by veteran publishing executive Robert S. Miller, the imprint also likely won't pay for more desirable display space in the front of bookstores, a common practice. Instead, the as-yet-unnamed unit will share its profit with writers and focus much of its sales efforts on the Internet, where a growing portion of book sales are shifting.

There's been some discussion in the writing community about whether the huge advances to a few end up causing the problem - and they may trigger it. But most publishers try to gauge advances by expected sales in the first year or two and the attending royalty payments to authors. If a book doesn't earn out its advance - and most don't - then perhaps it's not even selling enough to pay for the advance. Assuming that, then is splitting profits going to be better for authors? ON reflection, I just don't see it. This is part of a cost-savings measure designed to lower risk, so why would the publisher do this if it were going to pay out more money on the average? I suspect that most authors would end up with even less than usual under the arrangement.

Now consider that the publisher is going to focus on Internet sales, and not sales from stores. Oh? As in, let's depend on all our sales from Amazon, B&N, and Borders online? Sure, it's an important channel, but, alone, not enough. Amd then they'd also be changing the return policy to those resellers as well, so figure that they might have the same reluctance to do business that way.

Trachtenberg also points out that Harcourt Brace Jovanovich tried eliminating returns in 1980, offering higher discounts instead: "Orders fell off, however, and the publisher reversed itself." Then again, he notes that B&N CEO Steve Riggio said several years ago that he'd rather be able to mark down books than return them - whatever that means. Retaiers in other industries do that, like clothing, but they also get much higher discounts on products and, so, have more room to discount without an absolute loss.

All this will depend on the economic market in the book industry, and where that comes out isn't completely clear, even though the Journal article tried to paint an overall negative picture. On one hand, Borders has put itself up for sale, and the WSJ noted that Hyperion's operating income (pre-tax profits) is down a bit. B&N saw a 9 percent drop in its earnings in its fourth quarter in comparison with the previous year, but that's only half the story, as it earned more and paid out more dividends to investors than analysts expected and also said that its first quarter this year would be profitable, rather than the loss that analysts had predicted. Then again, many on Wall Street are ambivalent on Amazon. In short, there is too much going on that could be written off to a shaky general economy, I think, to get resellers to embrace big change in the way they operate, which means that the new Hyperion group could find that sales will be largely limited to the Internet. In short, even if dropping an open return policy could cut by 30 to 40 percent the number of book copies they have to print, I'm betting that the overall hit on sales would more than make up for that, meaning that the prospects for authors just don't seem that hot.

Authors Guild: Amazon Tightens Grip on Long Tail; Info Requested

I've mentioned Amazon's egregious and unprincipled decision to demand that any book publisher that wanted to use print on demand services use Amazon's own BookSurge service. The Authors Guild has a note with yet another angle - the desire to control this area of publishing. Here's the AG's view in its entirety, by their permission:

Last week Amazon announced that it would be requiring that all books that it sells that are produced through on-demand means be printed by BookSurge, their in-house on-demand printer/publisher. Amazon pitched this as a customer service matter, a means for more speedily delivering print-on-demand books and allowing for the bundling of shipments with other items purchased at the same time from Amazon. It also put a bit of an environmental spin on the move -- claiming less transportation fuel is used (this is unlikely, but that's another story) when all items are shipped directly from Amazon.

We, and many others, think something else is afoot. Ingram Industries' Lightning Source is currently the dominant printer for on-demand titles, and they appear to be quite efficient at their task. They ship on-demand titles shortly after they are ordered through Amazon directly to the customer. It's a nice business for Ingram, since they get a percentage of the sales and a printing fee for every on-demand book they ship. Amazon would be foolish not to covet that business.

What's the rub? Once Amazon owns the supply chain, it has effective control of much of the "long tail" of publishing -- the enormous number of titles that sell in low volumes but which, in aggregate, make a lot of money for the aggregator. Since Amazon has a firm grip on the retailing of these books (it's uneconomic for physical book stores to stock many of these titles), owning the supply chain would allow it to easily increase its profit margins on these books: it need only insist on buying at a deeper discount -- or it can choose to charge more for its printing of the books -- to increase its profits. Most publishers could do little but grumble and comply.

We suspect this maneuver by Amazon is far more about profit margin than it is about customer service or fossil fuels. The potential big losers (other than Ingram) if Amazon does impose greater discounts on the industry, are authors -- since many are paid for on-demand sales based on the publisher's gross revenues -- and publishers.

We're reviewing the antitrust and other legal implications of Amazon's bold move. If you have any information on this matter that you think could be helpful to us, please call us at (212) 563-5904 and ask for the legal services department, or send an e-mail to staff@authorsguild.org.

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HarperCollins Tries to Cut Writer Advances

According to the New York Times, a new HarperCollins unit, yet unnamed, wants to substitute profit-sharing for author advances. It also will try to eliminate the liberal returns policy that bookstores have, in my view, at least, unreasonably enjoyed for decades. (In what other industry do you get to hold onto goods for six months or a year, send them back at the last minute, and then reorder to effectively extend that ability to return?) This part of News Corp. will also "release electronic books and digital audio editions of all its titles":

Author advances and bookseller returns have long troubled the publishing industry. Best-selling authors can command advances so high that publishers often come away with slim profits, even for books that are significant successes. Publishers also sometimes offer high advances to untested authors in the hopes of creating new hits, but often those gambles do not pan out.

Ms. Friedman said the new group, which will initially publish just 25 titles a year, would offer “low or no advances.” Mr. Miller, who was most recently president of Hyperion, said he hoped to offer authors a 50-50 split of profits. Typically, authors earn royalties of 15 percent of profits after they have paid off their advances. Many authors never earn royalties.

My "headline" reaction was to think, "Cut advances? Is there anything left of them to remove?" But let's take a moment and consider the pros and cons. Relatively few books actually earn out their advances, so that lump sum - often pretty measly money - has become the only sum writers see. There is definitely a risk in dropping the up-front money.

Let's consider the other side for a moment. Advances become one of the gating factors in getting a publisher to take on a title. If your main work is writing books, then, yes, you need the advance. But if you're doing books on the side, it might be that you'd have an easier time selling a title in the first place. Also, even books that don't earn back the advance are still often profitable. Now, if you sell 10,000 copies, getting half of the cover price, and you're aiming, as the article says, at about $20 for a hardcover, that is a gross of $100,000. At 15 percent before tax profit margins, that would be $15,000, or $7,500 to the writer. Not tempting, I admit. Furthermore, you get a cut of profits, so all the costs are going to come out first, and must get paid off for there to be profits. You'll see your money later than before, and now you have to deduct the time-value of money - because you're waiting, you're essentially losing about 1.5 percent or more a month (what it would take in credit card interest to cover the missing sum).

A few more problems. Royalties are hard enough to follow, and that's when you get a list of the numbers sold. But profits? How can you tell when costs are actually paid off? What is the definition of profit? That is going to be an enormous problem; ask any musician or person working in Hollywood who finds that immensely well-selling properties end up never having an official profit. Chances are greater that you'd need an audit to follow along, and that is going to cost you money unless you can show that you're being shortchanged. Contracts will get a lot trickier, because the definition of profit and what can be charged to the costs of a book will become critical. Most book agents simply are not going to have the background and experience to negotiate these terms, because they don't know where the problems will be.

Those are a lot of potential problems. Is there a positive? I'm not sure. If a book sells well, you get the split of profits, not of royalties. Here's where the flip side of paying off costs comes in. As the costs are paid, more and more of the book sales are profit. Eventually, that $10, minus maybe a per-copy manufacturing expense of $1.50 and some amount of corporate overhead (call it 50 cents), leaves you with a cut of maybe $3 or $4 per copy, rather than the $1.50 you'd make with 15 percent royalties. But I suspect you'd have to sell a whole lot of volumes to hit that mark.

There's also a problem in the reporting of the Times that might make the gains turn out to be nothing. Consider this sentence:

Typically, authors earn royalties of 15 percent of profits after they have paid off their advances.

Actually, that isn't typical at all; 10 to 12 percent is more typical, and you're talking about the money coming in to the publisher, which is more than the "profits" would be. And for hardcovers, which is what they will be doing, I'd say 7.5 percent off the cover price is more typical. That means it's really easy to figure out how much someone owes you.

The upshot is that things are changing quickly, and you're going to need really good advice - from a lawyer, and maybe even an accountant - as you go into book deals. Forgo professional advance, and you're likely to make a deal which leaves you with less than ever before.