So How Do You Reward The Author?

At one end of the value chain we have ebook pricing, which today is in need of a sustainable model that is in the consumer interest. After all, they are the final arbitrator and the only one who actually puts real revenue into the chain. At the other end, we also find a similar need for a sustainable reward model, which is in the long term interest of the author. After all they are the ones who actually create the work and its value.

We have long stated our views on agency and its flawed position. Some have claimed that without agency, the future is bleak, prices will fall and the rewards for authors will be impacted. Whatever position you think is right, the future of agency will be addressed by the Department of Justice and EU investigations and filed class actions. Irrespective of the outcome, the question of author reward should be debated and is not just tied to any one model.

We have seen the drop in advances and the pressure on established authors to grant ebook on their back list. We have also seen the ebook self publishing model change, with the likes of Amazon, Barnes and Noble and others offering large incentives to authors to publish, both backlist and new titles with their services. The percentage of reward offered by publishers on ebooks has also gone up and down like a YoYo.

So what should an author earn on ebooks? Does an ebook have to be tied to its pbook or abook renditions? Where are the added value steps between the author and the consumer on ebooks?

Last week we also listened to a good friend, who is an published author and who told us about an aspiring author‘s manuscript that they had been given to read. They said the work was very good and a well constructed 'page turner', but that they were lost as to what to say to the writer. Five years ago they would have lined them up with an agent introduction and pushed them towards the traditional publishing route. Today, they feel that the rewards have changed dramatically and although the model still works for many, the odds on new authors making it are increasing and they believe, ‘its growing impossible for authors to make a living out of writing alone.’

The ebook itself is potentially changing the relationship between the author and the others who sit between them and the consumer. Yesterday the rights were often traded on a ‘performance related’ model. If the work wasn’t shifting, the rights could revert. Yesterday, there were often separate rewards for unit sales, special ‘book club’ deals, and the royalty statement could be tied to production, inventory and sales. Today, we increasingly see ‘net receipts’ and in the digital world, ‘honesty box’ sales and receipts. We do not doubt the sales reported but it would be interesting to see who has fully audited their digital sales and established that the money paid relates to the sales achieved?

We also have the question of rights being reverted. Contracts may still tie the pbook break clause to performance, but does this extend to ebooks whose inventory is now virtual and now exists within a ‘long tail’ marketplace? Are ebook rights becoming perpetual deals? Why aren’t ebook’s rights term based and fixed and renewable on say a five year basis? This would not only remove perpetual deals for the life of the copyright but it would make sense in a marketplace which is rapidly evolving and where it is often difficult to predict next year, let alone twenty or thirty years out. Today, an author can not only be tied to an agent’s deal for life but increasingly, the publisher too. Let’s hope that they don’t ever fall out!

Permission rights will become increasingly important in the digital market, but how are these rewarded and itemised on that royalty statement, let alone calculated and recorded?

We also have the question of payment schedules. It was understandable that royalty payments on pbooks took time. But in today’s real time payment transaction world where all ebook sales should be firm, does to same ‘banking’ delays and reconciliation make sense? It is interesting that the agency model agreed the commission split upfront, but irrespective of that simplification of the division of revenue, the money flow remained slow to the author.

Marketing and promotion can be one of the greatest value added services provided by a publisher. In the physical mass market world this was relatively easy to define and could even be written into the contract, but does this still work in today’s mixed market and how will it work in tomorrow’s digital direct market? As publishers move to a more direct marketing position will the exposure and spending gap between the ‘celebrity author’ and the rest widen? Does the publisher see the author, the work, or themselves as the brand tomorrow and how is that reflected in the marketing spend?

We now have the emergence of the rental model, which as in music and other media, often has a consumer appeal. Not only can this be at title level, but also incur a subscription across collections. How will this be reconciled moving forward?

Advertising revenue driven models are now starting to take hold within other sectors but how will they be reconciled to reward authors?

There are beacons of light for authors and we applaud the Simon and Schuster new author service and believe that transparency of marketing, sales, and reward is the only way forward.

Finally, we have the question of what should the author be paid on their digital sales. Some suggest a bit more than the physical sales, some stick around the 25% mark, some go higher and then we have the self publishing levels where the majority of revenues flows to the author. These are mere numbers and meaningless unless tied to performance as it is better to earn on a lower percentage and sell volume than earn on higher percentage and sell few.

So how do you relate performance and reward in digital rights contracts moving forward?