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?

The World Is Not Publisher Centric

The news Rosetta Books has announced a deal to a one-year exclusive with Amazon for the digital rights of author Stephen Covey should come as no big surprise. Hot on the footsteps of Random House’s attempt to land grab digital rights it recognises two things; authors are the creators of wealth and are often taken for granted and digital and physical aren’t the same no matter how much Random say they are.

Rosetta have, like they did in 2001, stepped into the breech and gone for what everyone knows is often fair game and available. Covey have said that they intend to continue to publish books with their traditional publisher Simon & Schuster, but publish digitally with Rosetta. Rosetta are widely reported to have more titles under negotiations.

Amazon says that Covey is their "13th bestselling author of all time."

So at a time when major trade houses are stalling on the release of digital titles, Random is claiming divine rights over all, others are voting with their feet.
So who owns the rights to the titles claimed by many under the Google Book Settlement?

The backlist, out of print titles and orphans all hold significant potential. The problem often is that they are left to fend for themselves and find there own way in a market still obsessed with the front list and those launch windows. Well maybe we are starting to see these often forgotten and under invested titles starting to fight back and authors come back from the dead.

Interesting times.

15% of What?

One of the thorny issues that continues to hold up the full adoption of ebooks by publishers is the question of rights. Should that be a question or many questions on rights? The problem is that for an industry based on content and rights we have failed to get a grip on the core information and focused instead on the easier logistics and supply chain standards , which are still important but pale into insignificance to those of rights in the digital world.

We read Jim Millit’s piece in Publishers Weekly on the Authors Guild and Simon and Schuster and wondered who is kidding who in the protracted tale of hardship, trust, contracts and abuse. On one side we have the authors who should be paid a fair price for the extension of the work into the new digital formats and on the other the continued tales of high investment and costs of digitisation and the cost of establishing the market.

Where do we sit?

First, the author right to revert is a given and must never be surrendered by the author under the false statement of ‘always in print’. As we see more and more publishers trawling of the backlist, delving into past sellers and creating general quick cheap wins we recognise that the author can do that himself today and servicing the long tail is relatively cheap and easy. As they demonstrate the publisher’s commitment to a work, the physical reversion rules often make good sense. Merely listing it on print on demand services is a one off and cheap exercise. Making the work into an ebook can be equally cheap and offer POD as well. Term time licence to digital copy is probably the second best solution. However does the digital copy remain with the publisher and have to be recreated or is it surrendered at rights reversion?

Reward is a lot harder as publishers have been slow to invest in content technology so face large initial investments. However, once digital workflow is achieved the incremental cost of creating an ebook is cheap, especially if the previous physically orientated processes are fully replaced. So in some respect we are talking of a set up investment and one off back list conversion. What an author should earn should be based on what revenues they can generate, the time and effort involved and obviously the cost. However, publishing is publishing and predicting winners is not easy. Making the author, in effect cross subsides the digital investment, also doesn’t make sense unless the terms also recognise that when the revenues rise they should also share the rewards.

The issues that we all tend to skirt around is to do with pricing and geography. Once produced digital files are cheap to maintain, distribute and repackage. What could happen is that we see a price reduction as the market establishes itself. Will the price of the digital be set against the current in print physical format or be separate? Digital incurs tax, which tends to be absorbed in the RRP and so creates an automatic dilution of potential revenues and a new price mark. Then we have the different territorial and format prices and before we know where we are, we are all confused as to what any percentage is a percentage of.

Trying to create a standard rule for society or guild of authors, may make sense to some, but it makes little sense to those, who are by their sheer creativity, are all individuals.