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.

Analyze the Web Site Before Paying the Ad Money

PageOneLit.com will say that it's:

• # 1 Literary Newsletters Website out of 1,770,000 (GOOGLE)


• # 3 Newsletter Website search out of 90,200,000 (GOOGLE)


• # 9 Author Interview Search out of 4,000,000 (GOOGLE)

Owner (I think) John Weaver will tell you that in a letter that his site was listed on the 2009 Writers Digest best 101 web sites (which it was, but more on that in a moment). At least that's a letter that he's been known to send to people who have forthcoming books. And then he notes that for a mere $250, he will offer:

A full personal interview page at Pageonelit.com PageoneLit.com and AuthorsPressReleases.com with your photo, bio, book summary, short book review, etc...This is a one time fee for long range promotional goals. Note: Your interview page will stay up forever. Note: Your interview page will stay up forever. This is your interview page to market your book as you like. Plus AuthorsPressReleases.com & Books-and-Authors.net

The claims seem to be accurate, and lord knows book authors want sales. But you're in business to get exposure and results, not to waste money, so let's get beyond the surface for a moment. Here's how Writers Digest described the site:

Page ONE is a one-stop shop for author interviews, contest news, inspirational quotes and writing resources.

That's significantly different from endorsing it as a way of getting people to buy your book.

Google rankings are fine, if the particular search term someone uses is what they might use to look for the book you are offering because, after all, search marketing is something that depends on specific intent of the audience, not a general nosing about. If your title would be of immediate interest to someone searching for a literary newsletter, then you're set. If not, then the search results aren't necessarily going to do you a spit of good.

And Google rankings aside, if you are appearing somewhere, then you want traffic flowing in, because only a small percentage of the people are going to be interested enough and motivated enough to buy the book. So what are the traffic rankings of PageOneLit? Not so hot. According to Compete.com, which samples large panels of Internet consumers for their surfing habits, since January 2009, the average monthly number of unique visitors has been around 1,000. That's a pretty damned small number. To put it into perspective, even my domain gets more traffic, and given that you either have to be looking for me or, more likely, something I wrote about freelance writing, that is a sad state of affairs.

Granted, the sample size for both is low, as noted by Compete.com, which measures U.S. traffic to web sites. But that, in its own way, is a clear statement as well. To triangulate, I also checked Alexa.com, whose "percentage of Internet users" going to a site depends on knowing how many users they think there are, but sill gives a potential comparison. That site suggests that my domain has been receiving almost three times as much traffic over the last three months, and, I cannot stress enough, that number is nothing to brag about, as Internet stats go.

To put it differently, PageOneLit.com gets hardly any traffic. If you've traditionally published and are making, say, $1 in royalties per copy, then you need to sell more than 250 companies in addition to what you would have sold to talk about the investment in "exposure" as offering a return on your investment. So the interview is up, maybe gets the majority of its notice in a month and then drops off radically in effectiveness, because that's how traffic works on the web. As in anything else, you get the biggest boost while you're top of mind. So let's be generous and say that the primary sales pull-through lasts for two months. That would mean you'd need to see 250 sales out of 2,000 visitors, meaning a conversion rate of 12.5 percent. In my experience in direct marketing, that is a total pipe dream.

Before you believe the come-ons of people preying on the desire of writers to be read, check the numbers. There are better ways to spend your time and money.

DOJ Shoots Holes Though Google Book Settlement

If any one business dealing represented the potential to reshape media, it’s the Google Books class action settlement. The agreement has received some heavy criticism, though, clearly, the publishers and the one professional writers’ group, the Authors Guild, involved in the negotiations seem to support it. (Usual caveat: I’m a book author who opted out of the settlement, which suggests that I see flaws, at least as to how it could affect me.) But now the Department of Justice filed a last minute memo in the case, and it gives a strong view of the problems the DOJ sees and the difficulty facing Google and its would-be publishing partners.

For the rest of the post (on BNET), click here.

Another Writer Mill: Atlantic Publishing Co. (APC)

I seem to be on a kick of discussing professional wastes of time, which I'm calling writer mills. These organizations bring in writers, grind them for whatever word juice is available, and pay a pittance. Now there's another to add to the list: Atlantic Publishing Company (APC).

Recently I've mentioned Helium and Demand Studios. Both share some telling characteristics and give insight into the institution of the writer mill:

• The pay makes burger flipping seem like glamorous high-rolling.
• The only way to really make money is to let quality fly to the winds, because you almost need to end the assignments before they start to make a reasonable dollar per hour figure.
• They constantly advertise for new writers, suggesting the deal is so bad that they cannot keep people around for long.
• (Bonus Characteristic) They have executives scouring the web, looking for potential criticism and trying to counter it.

On the first three points, APC seems to be lining up as a classic writer mill. The company advertises fairly frequently. Here's the copy of an ad on JournalismJobs.com (though the ad is set to expire on July 29:

Atlantic Publishing is looking for writers in various fields to write books on subjects such as: Building, Cooking, Farming/Animals, Gardening, Arts/Crafts, Recycling, Internet/Technology, Business/Investing, Real Estate, Finance, Parenting, Pets, Publishing, Education, and Self-Help. This position is a freelance opportunity. The payment varies from project to project. Writers are not required to reside in Ocala, FL, work may be done anywhere in the United States. If you are interested please contact Amanda Miller at amiller@atlantic-pub.com with your resume and writing sample.

I was curious at one point this year and replied to one of the ads. Here's what they said in an email about their projects:

Because we have many manuscripts that need to be rewritten, and each are in different stages of writing, the amount of work that needs to be done will vary. Some of the material in the manuscript may be useable [sic] or the book may need to be rewritten completely. Some sections may just require you to revise information to make the material up-to-date or reorganize. We would like to hear your comments on the manuscript, how much work you feel needs to be done, and how you can contribute to the book.

On the low end it's supposed to be copy editing, and the upper bound is full rewrite. Given that range of scope, what do you think they might pay? Here's the answer:

Upon acceptance of your bid we will e-mail you our freelance author agreement ( work for hire), and research material to complete the work. Typical time frames run from 30 days to 90 days for completion, we pay upon acceptable stages of completion, we check all manuscripts against proprietary plagiarism software, and we typically pay from $500.00 - $1,600.00 depending on the scope of the work involved. Many of our authors have completed several manuscripts for us. We give you full credit on the cover, in online databases such as R.R. Bowker, Amazon.com, B&N.com, and recorded CIP data in the library of congress.

Oh, goody -- credit. And a full typical $1,600 to completely rewrite a flipping book on a work for hire basis (though technically books don't quality for work made for hire under U.S. copyright law). That even makes a publisher like Adams Media, known in the industry for its relatively low fees, seem like a spendthrift. No wonder they check manuscripts with plagiarism software, because they're barely paying enough for a chapter. Why does any writer mill think that people will slave away for laughable sums? Because they get enough inexperienced ones to do so and know when they leave, dejected and squeezed, there will be others whose credulity and eagerness to "get into the business" will leave them vulnerable.

The only point I couldn't verify was the bonus characteristic of whether their executives also troll online, looking for anyone that might question their practices. I'm sure we'll find out soon enough.

Author Reveals Kindle Book Sales

People have been wondering about actual sales of e-books on the Kindle. JA Konrath was kind enough to do this in significant detail. A few things jump out:

• His publisher released a couple of novels. One was at $1.99 each and sold over 10,000 copies in a month. But publishers get 35% of the sale, which would be around $7000. So you can figure that the author's take would be between roughly $700 and $1000. Another title was listed for free. As Konrath is releasing some out-of-print books at very low prices to encourage more readers and is focusing on copies moved, not profit, it sounds as though the publisher did the same.


• The publisher actually promoted the books on Amazon, which means that the net for it is likely next to nothing, reinforcing the "get audience members" view.


• As previously mentioned, Konrath is selling some of his out-of-print titles, earning $2781.35 in just over two months.


• From the little price testing that he's done, at least on the low end there doesn't seem to be a lot of sensitivity, and I get the sense that charing a few dollars per title might work.


• With the way things work, for self-sold work, authors set the price and Amazon pays 35% of that, and then might further discount. So raising the price increases your take per copy, and even then Amazon might sell at a lower price to move more units. Effectively, you end up getting a bigger chunk of what the company actually takes in.


• Genre seems to trump the strength of the work's listed description, which to me makes sense. To specify genre is to effectively describe the size of the potential audience. Even a killer description of a book of poetry is going to be limited to attracting people who would buy poetry.


• Some authors who have never traditionally published are doing as well or better than Konrath, who has had seven book in print.


• Publisher releases "vastly" outsell author releases, because the publisher can get better placement from Amazon.


• Being active in the Kindle and Amazon social network features and in newsletters seems to be important to success.

If you're a book author, don't depend on this summary and do read his blog entry, becuase there are other things to learn from it.

Round-Up of Google Book Settlement Criticism

The Department of Justice is showing increasing interest in the settlement between Google, book publishers, and the Authors Guild. And the way debate is shaping up in the publishing community, what had seemed a PR stroke of genius for Google — make use of copyrighted material, wait to get sued, settle, and seem like a hero — seems more likely to turn into an expensive and messy public black eye.

At BNET Media, I have a short summary of the issues.

Interesting Article on Amazon and Kindle

BusinessWeek has an article on the Kindle 2 that is interesting because of the business issues, including the following:

• Analysts think that the Kindle is already turning a profit, which is impressive.


• Really increasing the Kindle's popularity would require dropping the price, but that would threaten Amazon's relationships with publishers - suggesting that Amazon is far from able to simply dictate terms, even with the large slice of the book selling business it represents.


• Amazon also makes more money on paper books than on e-books. One analyst guesses that the margins are 5 percent to 10 percent higher. That surprised me. I would have expected higher margins on the e-books.


• Jeff Bezos has said that e-books are now 10 percent of book unit sales, which means that their numbers are feeling increasing pressure. I'm not sure that I believe this figure, though perhaps the Kindle owners do buy that many titles.


• An analyst suggests that the Kindle makes sense only for a small percentage of the buying public, because most people wouldn't get more than five books a year, making the device too expensive.


• The iPhone may become the iPod of books, as Google creates a version of its online book search for the device.

Borders is Hurting

It's prudent to keep an eye on the companies that sell what you produce. And Borders continues to be in trouble that is so bad that the company has bounced its CEO and other top managers. Borders has also close to being delisted from Nasdaq. If you don't follow business issues, then you might not realize how big a problem this can be for the following reasons:

• Credit rating agencies will degrade the credit status of the company, meaning that getting the money it needs to operate will be more difficult.
• Delisting puts vendors on guard, so the company will likely also have bigger problems getting the stock it needs to sell.
• Loans and other financial agreements often have financial covenants, or agreements that certain measures of company performance will not fall below certain benchmarks. That can include keeping the stock listed. If the company breaks a covenant, it can find itself suddenly owing a lot of cash, which isn't good if you're short of cash to begin with.
• Although a delisted stock can still be traded "over the counter," practically speaking, it's far less liquid and, therefore, less attractive. Lower stock price means a harder time raising money through issuing more stock.
  

Ron Marshall, who is a private equity firm founder and someone with experience in turnaround situations, is now in place as temporary CEO. But that's not necessarily going to help:

Before his tenure at Pathmark, Marshall held senior management roles at Dart Group Corp.'s Crown Books unit and at the college bookstores unit of Barnes & Noble Inc.

That book retailing experience might be a little dated, said Michael Norris, a senior analyst for Stamford, Conn.-based Simba Information. He said he believes Jones' approach had been effective, but that investors must have thought it wasn't working rapidly enough.

The final straw was likely that the company's sales dropped this holiday season by 11.7 percent compared to the same time last year. Same store sales - a big measure of how well a company is doing when established for at least a year - dropped by 14.4 percent at Borders locations and by eight percent at Waldenbooks.

That's even worse than you might think, because retailers typically make 60 percent of their sales at the holidays, so the impact is magnified. Not that the stock can drop that much - it's under 60 cents a share, compared to the $11.60 a year ago.

Book Review: The Ultimate HTML Reference

If you've ventured at all into web sites, blogging, and social media, you find yourself running into HTML. Visual editor tools are fine for getting the effects you want into writing, but that is slow and limited. For the greatest flexibility in formatting text, creating tables and lists, inserting pictures, and many other tasks, a knowledge of HTML is handy. The Ultimate HTML Reference by Ian Lloyd is a reference book that should be close by a dictionary, thesaurus, or volume on English usage.

I've found myself frequently reaching for it when trying to remember how to control a table layout in a blog entry or double-checking how to get a link to open in a new window. The material is complete so far as I can tell, and the organization, including TOC and index, is strong and lets me easily find what I need. At $45 it isn't a cheap volume, but could easily save you its cost in time efficiency in your first time or two of using it.

Writing News Roundup

I do this in some other blogs, so thought I'd experiment with it here - an occasional round-up of stories that should be of interest to freelancers. Let me know if this seems like a good idea and, if so, how often you'd want to see something like this. My initial thought was weekly.

• Free Recipes as Cookbook Sales Mechanism Will Schwalbe, former EIC at Hyperion, has started a food site called Cookstr that gives away recipes from top-name and lesser-known but solid cookbook authors as a way to get people to buy copies. (NYT)


• Random House to Digitize Books Random House will make thousands of additional titles available in e-book form. Thius should make any writer who has published with RH check their contracts to see exactly what the company can and cannot contractually do. (AP)


• Writing the Unwritable in the U.K. Britain has much stricter (or looser, depending on your viewpoint) libel laws than in the US, as well as other impediments to freely publishing information. But journalists have developed all sorts of ways to report on that which could get them in legal hot water. (NYT)


• Houghton Mifflin Harcourt Stops Buying - For Now Houghton Mifflin Harcourt has told its editors that it has “temporarily stopped acquiring manuscripts” in trade and reference. They can't say when the ban will end. Although claiming that the move is about "doing things smarter" than "the end of literature," note that not buying now means not having a selection of new titles in 12 to 18 months. Either the house has a massive backlog, or things are worse than management wants to admit. (Publishers Weekly)


• Obama and New Book Directions A Guardian blogger suggests that Obama's election will open the book industry to many new types of titles as well as creating a market for some backlist entries. (Guardian)


• US Branch of Manga Publisher to Close The U.S. branch of Broccoli International, a Japan-based manga, anime, game, and merchandise publisher, will close. Although probably few readers of this blog are interested in manga and anime, it's something to note. Graphic novels have become mainstream business and the same approach to story telling has been moving into the non-fiction world. This might be a very early indicator of changing tastes of younger generations, which could mean the necessity of changing longer-range business plans. (PW)


• EU Book Digitization Project The European Union has launched Europeana, a plan to scan and make available online "millions of books, artworks, manuscripts, maps, objects and films from the most important libraries, museums and archives, and provide them free to download from one website." It will also include video and audio of interest. Having paid attention to the suit against Google, the EU is focusing on works in the public domain. The site is currently down because there was such overwhelming interest that the traffic crashed the servers. (Guardian)

Big Landmine in Google Agreement

The New York Times ran a story about how the settlement among Google, publishers, and the Authors Guild of the class action suit over scanning and indexing copyrighted books includes the ability to sell e-book versions of out-of-print titles. There is a huge problem here: publishers generally have no rights to books that went out-of-print. For a full explanation, please see my blog at BNET, where I just posted at length about the issue. I'm no lawyer, but I see the potential of another blow-up should some class members object - and I can see how many might object. Heck, I might add my name to an objection this time. I think the potential for this to become another debacle as happened with the class action lawsuit over magazine articles in databases is pretty strong.

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.

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.

Feel free to post or forward this message in its entirety.

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.

Amazon Twists POD Arms

According to various stories (Writers Weekly, Wall Street Journal, and Publishers Weekly, to mention a few), Amazon.com has admitted that any print-on-demand publisher that it use Amazon's Booksurge publishing services or have their Buy buttons on the book retailer's site disabled. In other words, Amazon is trying to force all POD work to go through its own facilities or else it won't sell the book. That's a form of intimidation and economic coercion that I find appalling.

This is of vital interest to all writers. What if you want to own your books and self-publish? POD doesn't provide the most ecnoomic way of doing so (and Amazon's service for individuals is no bargain). What if your publisher decides to use POD? It's an option that even the largest companies are considering. Will Amazon treat them the same way? I suspect that by going after the POD contractors, Amazon is trying to set the stage for this next natural extension - and, in fact, it appears that some smaller traditional publishers are already being pushed down that path. That means lots of books will become far less economically feasible. Guess who will be asked to drop their financial expectations? The writers. That is, if they can get a contract.

Now is the time to complain, and loudly, to Amazon.

The Memoir Market

A few weeks ago, USA Today ran an article about the memoir business. It quoted Michael Cader, who produces the newsletter Publishers Lunch and the site Publishers Marketplace, as saying that memoir sales were actually up last year:

Michael Cader, who tracks book deals for his electronic newsletter, Publishers Lunch, counts 295 memoirs signed by publishers last year, compared with 227 debut novels and 214 memoirs in 2006.

Memoirs accounted for 12.5% of non-fiction deals, up from 10% in 2006 and 9% in 2005.

Cader tracks deals, so while this may not be complete representative, I would look at that data as important and informative. The article also mentions, without providing the source, that "most memoirs sell modestly with first printings between 10,000 and 30,000." That number seems pretty damned high for an average.

The End of Paper Book Manuscripts?

Call it the beginning of the end - according to New York Magazine, Hachette Book Group has distributed Sony e-book readers to its editorial staff. Agents have to email files of manuscripts rather than sending paper. Apparently Simon & Schuster also has the devices (Amazon was too tardy with the Kindle), though only some of the editors actually use them. Unfortunately, there is no edit function, so editors can only read and not mark up documents, leaving some writers, I'm sure, cheering.

Editor Pat Strachan on Her Career and the Business

Poets and Writers magazine has an interview with Pat Strachan. Aside from the general interest for people in the business, there are some practical nuggets of advice you can mine. For example, she mentions the "stopper" - a term from her New Yorker days meaning some image "that causes the reader to stop and read in a daze over the next pages." So you don't want to follow something like that with a section that is critical to the book, because people will miss it. Or there's the most common problem with first fiction books:

They can be too controlled. I find a lot of first novels too careful and too polite. I mean, let’s face it, Housekeeping is a wild book. I don’t think Marilynne had ever published anything before, even short pieces. She was doing what came from her mind and her experience. Larry Heinemann’s book is another example, a graphic war novel, but just gorgeous. Sometimes others can be a little tight and a little fearful of being messy.

Certainly not something I would have known. Also, she generally knows within ten pages whether she'll like a book. It's definitely worth a read.

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.

Net Profits Screw Book Author

A studio taking advantage of an author - I know, it's hard to believe, eh? Thanks to a reader pointing to Sarah Weinman's blog, which pointed to this LA Times piece, we have a story of an author, Deborah Gregory, who wrote a popular line of books for girls: The Cheetah Girls. But when she signed on for a cut of net profits of the movies, CDs, DVDs, and even concerts that Disney has sold, she didn't realize she was also signing on for Hollywood accounting:

Her breezy, street-smart tales of five girls chasing pop music careers were turned into two hit television movies, and a third is now being filmed in India. Cheetah Girls CDs and DVDs have sold in the millions, and concert tours have hit more than 80 cities. Meanwhile, Disney's fabled merchandising machine flooded the market with Cheetah Girls shoes, dolls, toothbrushes, video games, backpacks, note pads, pillows, posters, T-shirts and the like.

Gregory expected to get a piece of the action when she signed a 2001 contract promising her 4% of the net from all of this activity. But like many other authors who have signed away dramatic rights, she says she never got a penny of the profits. Unlike screenwriters, who were backed by a strong union in their recently ended strike, most literary writers are at a disadvantage when negotiating with Hollywood. And it is difficult, if not impossible, for them to crack the safe.

According to the story, Gregory has seen $125,000 total in the last nine years. She's never gotten a "net profit participation statement" from Disney, although she's been asking. She lives in a studio apartment in Manhattan.

"This is an old, old story in Hollywood," said literary agent Nicholas Ellison, who has represented numerous clients in book-to-film negotiations. When studios are asked why an author has not received any net profits, he said, they often point to expenses that have grown larger than expected and contend that a hit picture has not, in fact, made money.

It's called "Hollywood accounting," and in some cases studios may be on solid ground, citing legitimate costs such as promotion and development. But in other cases, contracts contain definitions of "net profits" that make it all but impossible for an author to collect money that once seemed tantalizingly at hand.

No kidding. According to the WGA, 43 percent of Hollywood movies over the last five years were adapted from books, articles, and other writing. As Paul Aiken of the Authors Guild said, "The best advice we give is that you should try to get as much of your money upfront. You can't count on net profit deals for anything." And apparently the studios are ready to walk away from writers, including ones that aren't big names, because there are always other books available.

But don't think this is restricted to Hollywood. I've often found these "net profit" clauses in both book and magazine publishing contracts. Writers assume they're getting something real, rather than asking just what the hell gets taken out before you get to "net." It makes me angry - really angry - because this isn't some accident, or just a poor choice in wording, or even contract terms taken from some other kind of contract and assumed to be applicable, as happens often in publishing agreements. This to me reads as the deliberate intent to trick a writer into the assumption of getting one thing, while offering an opportunity to play with definitions to deliver a great big fat zero.

Let me ask you: Have you ever signed a contract that provided for participation in net sales through syndication, or licensing to overseas magazine titles? Now, I've known a couple of writers who have gotten extra money from Hearst, but other than those couple of cases, I've never heard of anyone getting money down the line.

This suggests that writers should absolutely push back on these net deals. Either the publisher isn't using the rights you grant and there is no money of which to get a cut, in which case this is opportunity wasted, or they do make sales and come up with ways of not paying. Do you ever get notification of other sales? Is there a clause, as in the book publishing business, where you could audit them? Nope, and I'm betting that's for a reason, though I cannot bring myself to calling it good. According to the story, Gregory wrote 16 novels in the Cheetah Girl series, sold 2 million copies, and got $180,000 in advances. Think that's good? Do the math: it's $11,250 per book. You could write how-to series titles and probably do better. As for the pittance she saw from what Disney got, I guess their expenses were inordinately high:

The first movie was broadcast in 2003, drawing an estimated 6.5 million viewers on its first night; the second aired in 2006, attracting 8 million. Two CD soundtracks sold a combined 3 million copies. National concert tours in each of the last three years have played to sold-out crowds. Merchandise made by a flurry of companies who leased the rights from Disney began flooding into malls across the nation.

Hollywood is again courting Gregory over a new series she's written. And this time she's not depending on just her agent, which is William Morris these days, but is independently hiring an experienced entertainment lawyer to represent her interests. You and I can't do that with magazine contracts, so maybe a "get this out of the contract" approach is what is necessary. And if the publisher insists that it needs the rights, then tell them you want something in there about being able to audit the results and to get notification of when these deals happen. Oh, and a definition of exactly what comes out between gross and net.

Book-A-Month Publisher

NPR's All Things Considered had a piece the other night on Jonathan Karp, former EIC at Random House and now publisher and EIC of Twelve, a publisher that produces one new book a month. His impetus was interesting:

"What I really wanted to do with this imprint was to make a promise to every writer we publish that we would do everything in our power to make his or her book a best seller," Karp explains.

In other words, he wanted to get out of the "legalized gambling" business model of publishing gazillions of books and hoping that some number of them would be a hit, and then get behind those.

A welcome relief? Perhaps. It's important for businesses to realize what they are doing and to make efforts to find "products" that will appeal to customers, and publishing is no different from any other industry. However, let's look a bit deeper. On one hand, their strategy is generally a "me too" approach, in which they all look about for what seems to be selling and then try jumping on that bandwagon. The mathematical result amplifies each accidental direction, making the entire industry lurch this way and that without more thoroughly thinking through what it is doing. It's the old problem, seen in strategic planning circles, of trying to plot company direction by looking at history. Knowing what has sold in the past has some value, but that only tells you where you've been. Real breakthroughs come from figuring out where you should go. When you look only at sales histories, you're driving forward while looking only in the rear-view mirror - an old analogy, but apt.

Will Twelve find a different approach? It's hard to say. Karp comes out of the established way of doing business, and his first two books in the new venture were both hits - and came from Christopher Buckley and Christopher Hitchens, both name authors. Yes, he can marshall resources behind one book instead of multiple ones, but I think that may push him in the direction of largely looking for editorial safe bets. A large publisher can have a surprise hit come out partly because of the industry's traditional model (which corporations have been turning in a detrimental direction, I think): the hits subsidize all the other books. When you have only 12 titles a year, you'd better be making a lot of good choices.

At the same time, Karp (hopefully) has avoided the biggest problem with corporate publishing: a priori profit goals that may not relate to what the business might organically support. The large companies that bought publishers decided that the roughly 5 percent profit margins were due to the business ineptitude of the families that once controlled the houses. Certainly some of the practices that came out of that era - the ability of sellers to return books six to even 12 months after they purchased them - make it difficult to predictably do business. But I suspect there is also something inherent in the nature of selling books that keeps them from being quite the cash cows CEOs would like to order.

Giving Away E-Books to Drive Sales

Author Paolo Coelho has apparently been giving away electronic versions of his books to great marketing effect. There's a quote on a site called TorrentFreak:

In 2001, I sold 10,000 hard copies. And everyone was puzzled. We came from zero, from 1000, to 10,000. And then the next year we were over 100,000. […]

I thought that this is fantastic. You give to the reader the possibility of reading your books and choosing whether to buy it or not. […]

So, I went to BitTorrent and I got all my pirate editions… And I created a site called The Pirate Coelho.

And here's something from his official blog discussing a talk he gave about the phenomenon. I'm not saying that every author should immediately run off and give away copies, but the success that some have with this method does give one pause to think. With so many book purchases happening online, maybe this is the online equivalent of going to a book store, having a title catch your eye, flipping through it, and deciding to buy it. Or perhaps this will only work with a few authors and eventually the whole approach will fall apart. Interestingly, the people I've heard of who have had success - Coelho; journalist, science fiction author, and co-publisher of the popular web site BoingBoing.net; and M.J. Rose - have all been giving fiction away.

It makes me wonder whether there has been any success with giving away non-fiction - at least the non-literary type. (If you've heard of a case, please email me and let me know.) It could be that it's an approach that only works with more "literary" works. Or perhaps it's just that non-fiction authors generally have an easier time to get commercially published, and aren't quite desperate enough to take big chances that could result in success.

It Can Happen To You

I recently had a book project get canceled in the middle. Although I had proposed the basic idea, the publisher wanted something near to it but different (like the difference between Manhattan and Trenton - at least they're both in the Northeast). The head of this imprint had decided to fit the book in with a new concept she tried in another book. And then the initial sales results came in: that book did terribly and she decided to can this project, assuming that it would have as many fiscal problems.

There was a clause in my contract that let the company cancel the contract should it decide that the book wouldn't sell in advance of its actually coming out and selling, and my legal remedies were limited to getting the parts of the advance that had come due. And I singed it, because the chance of losing the project was low, and even if it occurred, the advanced owed me would reasonably cover the blow. And, to be fair, my editor let me know, but said that I wouldn't be asked to pay anything back. I now have to look around for some replacement work, but it's only inconvenient, not a disaster.

I went into this with my eyes open, and only agreed because I had inherently limited any damages. That's because I've been around the block enough in life to know that any given unexpected event may be unlikely, but when you add all the things that can go wrong, chances are that something will. Many writers go into projects holding their noses at some unpleasant clause in a contract, but tell themselves that the situation can't happen. But of course it can. Look at all the news you've heard about the sub prime credit meltdown. Sophisticated and highly-paid managers at prestigious financial institutions told themselves that they were getting their organizations into easy money. After all, what could go wrong? Oops.

If you see a clause in a contract that makes you uncomfortable, be realistic about how safe you might be. If you're writing an essay about how you did something foolish and embarrassed yourself and don't mention anyone or anything else, then, sure, you aren't going to have a problem with libel. But if you tell yourself that you're only writing a small article and that who would take offense at something you said, then you are out of making a realistic analysis and into the realm of rationalization. You've crossed the line and aren't thinking, but coming up with ways to excuse your behavior to yourself.

You can't eliminate all risk from doing business. Risk is an inherent part of business, because it is the risk that also offers the opportunity. But do avoid foolish risks, and make sure that for the ones you take, you've got enough protection to keep yourself from taking an unexpected bath.

An Interesting View on E-Books

Tim O'Reilly is a smart book publisher, and he took a look at some of the numbers that e-book enthusiasts tossed around with the advent of Amazon's Kindle. His argument is that even if prices do tumble for e-books, it will likely be only temporary. It's worth the read.

I'll add an additional angle. Let's assume that he's wrong and prices do drop and stay at $5 a title. What publisher and author combination can make money that way? Reading hasn't reduced in volume because the prices are too high - books just aren't that expensive. If you have a current business model under which most titles don't even make back the pitiful advances that authors get, and where the cost of the actual paper is only about $1.50 a copy, then dropping the price by 60 to 80 percent is going to mean that publishers won't be able to afford to print anything that isn't going to be wildly successful.

Current backlists may stay around (if the publishers have acquired the necessary rights), but forget the variety of titles coming out now. You'll be down to a handful of authors who can generate the necessary sales. Some individual authors might be able to self publish, but if they're getting 35 percent of $5, that's $1.75. Take out costs of design and production, and maybe they're at $1 a book if they're lucky, which is the inadequate stream of money they made from publishers - too low to support self-publishing. So $5a copy, if really gutting the paper model, would actually leave book publishing virtually dead. Then supply and demand will kick back in, because there are those massive infrastructures to feed, and prices will head back up anyway.

Two Dozen Literary Blogs

Book blogs have become a significant tool in book marketing. Get major bloggers to look at your book and review it, and you could start reaching a bigger audience than most major book review sections of newspaper (the ones still left). Here are a few that I picked up from a variety of sources. All had to be mentioned in at least one other high profile place, so if you have a book blog, don't take offense - mine certainly didn't make the cut.

• Beatrice


• Bookdwarf


• Bookslut


• Booksquare


• Buzz Girl


• Chekhov's Mistress


• Conversational Reading


• Edward Champion's Return of the Reluctant


• Elegant Variation


• Emerging Writers Network


• Fantastic Metropolis


• Golden Rule Jones


• Literary Saloon


• MadInkBeard


• MoorishGirl


• OGIC - Courtesy of ArtsJournal: About Last Night


• Old Hag


• Rake's Progress


• Shaken & Stirred


• The Happy Booker


• The Millions (A Blog About Books)


• The Mumpsimus


• The Reading Experience


• Tingle Alley

Book Platform Isn't Expertise

I was part of an online discussion about the Jessica Seinfeld cookbook and all the controversy about whether she or her publisher stole the concept from Missy Chase Lapine. (In case you're late to the controversy party, you can see something about this here and here on my food blog.)

One of the reactions many writers had was that it seemed unfair that the commedian's wife should get a book deal because she wasn't a nutrition or food expert. She had no platform in the topic. She was just married to someone famous. I'd like to take a moment and disabuse many of an erroneous concept. Platform has everything to do with the writer generating sales by the mere connection to a book and nothing to do with expertise, except as that expertise feeds into the sales. I repeat - platform is all about the sales. That's all the publishers care about. I think it's an ultimately short-sighted view of their businesses, as if what the customers wanted didn't matter. But if you're going to deal with the commercial publishing world, you have to understand this.

I see many writers starting blogs, trying to get specialized certifications of knowledge, write articles on a topic, and generally show that they know about a subject. But few actually get somewhere. The publishers don't care if you have a blog or web site, unless it has lots of readers. They don't care if you have Ivy League degrees up and down your arm unless you put yourself into positions where you can promote your book. By the way, part of this can be nothing more than perception of the publishers; they think you're doing things that indicate an audience, and so assume you have one.

Until writers begin to understand this dynamic, they won't build an audience, won't have a platform, and won't get meaningful book deals.

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.

Simon & Schuster Blinks

From what the Association of Authors' Representatives (literary agent organization) and the Authors Guild are saying, Simon & Schuster is backing down on effectively elminating out-of-print rights reversion. The company had tried questioning the Authors Guild in a statement on Publishers Weekly, but apparently that was short-lived. Here's what the AAR had to say after having a few of its crew meet with S&S:

They informed us that S&S is investing a lot of resources in its digital publishing initiative, and their expanded efforts in conventional and newtechnologies will enable them to supply books to consumers in a variety of formats, including Print on Demand, electronic books, digital downloadable audio, online page views, et. al. Their goal is to keep books in print more effectively and to market frontlist and backlist titles more vibrantly.They have confirmed for us that they are agreeable to negotiating with agents a revenue-based threshold to determine the in-print status of a book.

That is certainly good news - and proof that if writers don't roll over, publishers are quite capable of backing down.

Simon & Schuster Takes Aim at AG

Last Friday I mentioned the Authors Guild warning about the new Simon & Schuster contract changing so that a book could effectively be "in print" forever, and how that has been creeping into publishing for years.

Early this week, S & S decided to fire back with an open letter "To Our Colleagues in the Author and Agent Community." The company made its central point in the first two graphs:

The Authors Guild has recently perpetrated serious misinformation regarding Simon & Schuster, our author contracts and our commitment to making our authors’ books available for sale. Unfortunately, these distortions were released by the Authors Guild without their having undertaken any effort to have a dialogue with Simon and Schuster on this topic.

In recent years, Simon & Schuster has accepted, at the request of some agencies, contract language that specifies a minimum level of activity for print on demand titles. Our experience with the current high quality and accessibility of print on demand titles indicates to us that such minimums are no longer necessary. Our position on reversions for active titles remains unchanged. As always, we are willing to have an open and forthright dialogue on this or any other topic.

Let's start taking this apart. The first graph is rhetoric - distortions without having trying to have dialog? That's a corporate way of saying that unfavorable news leaked out. Surely the company knows how professional writers would react. Did it seek to have "dialog" with the Authors Guild? Apparently not; it put the clause into contracts and, according to the AG, agents are reporting that S & S will not remove the passage. I guess talk is talk and printed contracts are something else.

Now for the second paragraph. Historically, the minimums were never to ensure a given quality of printing; they were to ensure a sufficient level of commitment on the part of the publisher. If you have to keep inventory, then you have an inducement to get it the hell out of your warehouse. And, again with the dialog - who cares if they won't negotiate the point.

Then the letter goes on to ask authors and agents to consider a number of points:

• Through print on demand technology, publishers now have the ability, for the first time in history, to actually fulfill the promise which is at the core of their contracts with authors – to keep the author’s book available for sale over the term of the license.

Oh, please. A publisher is interested in profit. The core of the contract was to ensure that the publisher made reasonable efforts in exploiting the rights it was granted so that both it and the author could make money. Keeping something available for purchase means nothing if you aren't promoting the item, unless it has so much self-renewing demand - like The Catcher in the Rye - that the publisher almost couldn't screw things up even if it wanted to. Also, virtually every book contract I've reviews as ASJA Contracts Committee chair was for the length of copyright. That means past when the author dies. Having an ebook or POD text in a database isn't promoting the book.


• We view this progress as a great opportunity to maximize the sales potential for slow moving titles, and some of the best news for authors and publishers in a long time. The potential benefit for all concerned in incremental income for the publishing partnership far outweighs any imaginary negatives purported by the Authors Guild.

This may be good news for publishers - get a bit more from that old dog in the virtual warehouse. But for authors? Not a chance. If there are dribs and drabs coming in through someone finding a book online, why not use POD yourself and get all the money coming in and not some small slice of royalty. Also note that many royalty clauses actually reduce the percentage for POD and ebook versions.


• We and others are investing heavily in digitization so that authors and publishers can reap the maximum benefit of publication over the long term. New technologies including print on demand will extend the life of a book far beyond what has been possible in the past.

Yes, they will extend the life, but again it's the publisher that will really benefit. Most books never earn out their advances, so as these sales continue of their own accord and with absolutely no help from the publisher, the writer will likely never see another penny.


• Contrary to the Authors Guild assertion, using technologies like print on demand is not about “squirreling away” rights, nor does it mean that “no copies are available to be ordered by traditional bookstores.” Print on demand is simply a means of manufacturing a book, making it widely available to retailers and consumers.

POD and ebooks are technologies, but they have an impact. They are considered "versions" of a book, and if your contract says that a title is in print so long as any version exists, that means the rights are perpetually theirs. The intent doesn't have to be focused on keeping the rights to make the effect that.


• Publishers must and will continue to invest in sales and marketing organizations that work on behalf of its books regardless of how they are manufactured.

A publisher works on PR and marketing - in a minimum way for the vast majority of titles and for only three months. After that, it's the author doing all the work. This claim of S&S is actually laughable if you have any experience in the industry. And then there are all the ways in which they claim to promote. Stores don't stock backlist books unless they move heavily, and the publishers are the whipping posts of the retailers. The sales team reviewing "inventory opportunities?" That means pushing new titles, not keeping old ones in place. Category promotions? How many of the backlist books actually appear?

Yes, POD and virtually warehousing provide important tools for publishers - and I think they should use them. But lets stick with some level of sales activity that they create. If they can't do that, then they're not doing their jobs, and they shouldn't keep the benefit of the rights that they licensed.

UPDATE: According to the Authors Guild, Simon & Schuster is now saying that it will negotiate the rights reversion clause "on a book-by-book basis."

Stalking the Wild Deal-Killer

For those who might not yet have run across the term, a deal-killer in the contract world is a condition that puts you at such potential disadvantage that you have walk away from the work.

Not all people have the same deal-killers. If a significant part of your business is reselling articles, you are more sensitive to extensive rights licensing than someone who doesn't bother reseller, or who is doing corporate work. One person might find pay on publication (where you don't get paid until the article runs) unacceptable while another will hold his or her nose because for other reasons a clip in a specific magazine could help increase a public profile.

But there are some terms that should be deal-breakers for all writers, because the danger so strongly outweighs the return. I ran into one this weekend on a book contract that sought not only indemnification if I breached a set of warranties, or promises, but if there was an allegation that, if proved true, would be a breach.

Now, the topic wasn't one that would cause a libel suit nor an action over having invaded someone's privacy. But there are a lot of kooks in the world, and the topic isn't new. Even though I know I wouldn't infringe someone's copyright, could I be that sure that no one would ever accuse me of doing so? Such unfounded claims are hardly unknown in the publishing world.

If I signed a contract with that particular phrase, I'd be liable for the economic damages, including legal fees, that the publisher would face - whether I had done something or not. And contrary to the opinions of many, and something I used to think myself, some major publishers actually do pursue reimbursement from writers over such things. As it stands now, I've let my agent know and we're waiting to hear back from the publishing house. Should they refuse to back down, I'll be walking away from the contract, even though it would be a handy amount of work to lock down.

Any time you look at a contract, you may be in a position where you feel that you need the income or the credit or the opportunity and that saying no is impossible. But realize that you might be in a position where saying yes should be unthinkable, once you realize what the cost could be. Read carefully; sometimes "No" is the best answer.

Authors Guild Warns of "Simon & Schuster Rights Grab"

I've had a number of writers pass on news of an Authors Guild warning about book publisher Simon & Schuster. You can see the original message, but here's the heart of it:

Until now, Simon & Schuster, like all other major trade publishers, has followed the traditional practice in which rights to a work revert to the author if the book falls out of print or if its sales are low.

The publisher is signaling that it will no longer include minimum sales requirements for a work to be considered in print. Simon & Schuster is apparently seeking nothing less than an exclusive grant of rights in perpetuity. Effectively, the publisher would co-own your copyright.

The new contract would allow Simon & Schuster to consider a book in print, and under its exclusive control, so long as it’s available in any form, including through its own in-house database -- even if no copies are available to be ordered by traditional bookstores.

This may be new for S&S, but this is hardly news. Book publishers have for some years have been redefining "out of print." If you have a recent book contract, look and see if there is wording to the effect that a book is in print so long as at least one version is available. Now see if you granted rights to create e-books or print-on-demand delivery or even more general "electronic" rights that a publisher can use to make a title capable of being searched through an online book seller (think Amazon) or search engine (like Google). If so, and if they've produced such a version, then you, my friend, are stuck - at least until 35 years go by and, under US copyright law, you rescind any previous license.

Reading and understanding contracts is a vital part of having a viable writing business. You can't just look for a checklist that someone provides you. No guidelines that have ever been produced yet can envision every single possible twist and turn that business models and, as a result, contracts will take. Don't rely on what other writers tell you or what agents suggest. Learn enough about publishing contracts to smell when something is fishy, and whenever possible, get a good publishing lawyer to review the document. If you won't go to any trouble to take care of your own affairs, you'll find that no one else will, either.

How Bad Publishers Are at Managing Royalties and Rights

I'm a fairly cynical guy when it comes to trusting what publishers do, but Art Hutchinson, a strategic planning consultant and owner of the Mapping Strategy business blog, managed to surprise me. He had posted an interesting take on a New York Times article about publishers not having a clue as to why some books sell better than others. I responded in a comment and his answer is a must read for book authors, or those who wish to be. Go to this link, scroll down, and see his post about how one major publisher only paid attention to royalties and rights for big-wig authors, and otherwise didn't worry about things.

Market Research and What Publishers Don't Know

A New York Times piece suggests that book publishers largely fly blind, knowing nothing about their readers and so essentially publishing a lot of titles, hoping that some of them work out. The reason some get high advances is that the publishers think it will be a hit - but there is apparently little correlation. Numerical analysis does enter the equation:

In estimating value, editors rely heavily on an author’s previous sales or on sales of similar titles. Based on those figures and some analysis — about the popularity of the genre, the likely audience, the possible newsworthiness of the topic of the economy — they work up profit and loss projections.

Unfortunately, publishing success often hinges on something new that hasn't been a success in the past, so the publishers are effectively trying to drive a car by looking in the rear view window and seeing where they've just been.

Sounds like the recipe for an accident, and given the low profit levels of publishing, it has been. A friend pointed me to a blog entry by one of his friends, noting that the article made a big mistake by not talking to Amazon.com, because sure Jeff Bezos is sitting on a heaping pile of customer data. So someone - the online sellers - have a much better idea of what is happening in publishing. But even if they shared, the publishers would have to be willing to change the way they do business, and having dealt with a number of them as a writer, I'm not sure that they're willing. Suggest something new and the answer is almost inevitably, "But we've never done that before."

Using Audiobook Podcasts to Promote a Book

If you haven't seen it yet, here's a link to a new York Times story about how authors are starting to use quicky audio versions of their books to help sell them. Some companies are recording audio versions of books that might never make it into print. I think this is notable because it shows another aspect of how publsihers are losing the advantages that economic scale once gave and how authors might consider becoming publishers in their own rights and more successfully funding their own businesses.

Smart Idea on Getting Book "Blurbs"

Here's an idea from Daylle Deanna Schwartz, a pro writer and music industry person:

Something that I've had some success with is not asking for endorsements but instead asking for a comment on the topic or why it's so important. For example, for my first music business book I got the Susan Blond agency to get me a quote from P. Diddy Combs about the importance of getting a good education about the music business. I come up with requests that get me quotes that seem like they're about my book but aren't.

That's so slick that it has me grabbing for the railings to keep from sliding off into a wall. There is one potential problem, though - you have to be honest in how you present the quotes. Avoid the temptation to massage things a bit so what is clearly a comment about a topic appears to become more of a comment about your book.

How Not to Tick Off Editors, Agents, and Others

Sally Wiener Grotta is a writer and photographer friend of mine who has a great blog entry on what not to say to editors and agents.

It's on the book end of things, but I think the comments are applicable to anything a writer does, whether book, magazine, corporate, or non-profit. Outside of the usual culprits - like "Don't screw up my name when sending something to me" - are some particularly relevant ones. For exmaple, the impulse to talk about yourself can be off-putting and can set off a red flag that you are going to be high maintenence. This is a perfect example of starting to understand your prospects and doing things to make them comfortable and happy. And when the prospects are happy, they're more inclined to give you assignments.