The Slippery Slope From Paying Authors to Being Paid By Them?

The rise of self publishing has been significant in recent years and what was often derided and dismissed as Vanity publishing is now here and growing. The number of self published titles is growing year on year and they are becoming often as visible as many ‘published’ titles. Its ironic that at a time when publishers are trimming back their lists, getting tighter on advances and generally pushing back on those manuscripts that are many refer to as the ‘slush pile’, the ability to self publish was never easier and more attractive for many aspiring, backlist and forgotten authors.

The challenge for many publishers getting that balance between attracting and harnessing new talent whilst ensuring it doesn’t open its flood gates to the masses of material looking from a publishing home?

Some believe that they have found the answer and instead of ignoring the self publishing businesses that have been happily taking the money off the authors for often little or no return, have instead decide to buy them up.   Earlier Pearson surprised the market in their acquisition of Author Solutions , for a price many believe was over the top.

Now  Simon & Schuster has announced it is to follow the pack and partner with the same US service provider Author Solutions. Author Solutions isn’t new to having publishers knocking on its doors to partner and already has arrangements with Harlequin and Thomas Nelson. This new partnership will create a new entity Archway Publishing which will aim to appeal to authors looking to publish fiction, nonfiction, business or children’s titles. How all these fit into the overall ownership of Pearson is somewhat a mystery to us but no doubt plain to those involved.

So Simon & Schuster will now not pay the authors looking to be published but instead intend to provide a ‘premium service, at a premium price and in fact make from the rise in demand in the market. The majority of Author Solutions revenue comes from author payments not market sales. The 64 dollar question is what value add Simon & Schuster will bring to the table. It is clear that they intend to exploit the authors desire to be published and in so doing some would suggest they have not raised the bar, but lowered it and with it themselves and their reputation.

Whatever is included in the premium package, we are now moving dangerously close to a model which may force many to pay to be published and where publishers no longer take risk, but feed of the aspirations and egos of those less fortunate. How do they distinguish between those they pay and those they make pay them?

Author Solutions will not be using Simon & Schuster resource and like Harlequin and Nelson will not have their name associated with it which again make one question where all this bandwagon is heading?

So are authors merely being exploited and for what end? Some suggest that publishers can monitor the titles and use the pool to spot potential titles. Others would suggest that they could do this anyway and by encouraging this cheaper route to talent spot they are trying to force more aspiring authors to write for little and not ask for more. 

A New Era of Author Care?

We live in a connected world where information can be instantly available at a click. However, information on book movement and sales has todate often been a dark secret and a source of frustration to a major stakeholder – the author.

Today three major publishers have announced in the US that they would allow their authors to access book sales data directly online. Simon & Schuster have created an author portal, where authors and illustrators can check sales of their books, by format and merchant and including digital. Random House and the Hachette Book Group have also declared plans for their own portals for authors sales information. This in itself a significant break through and starts to make sales data transparent, embraces authors and is to be applauded.

Some have suggested that the motive behind the initiative is to combat Amazon, which gives authors access to data on their titles from Nielsen BookScan and also allows them to check their sales ranking compared to other books on Amazon. If this is the case it should be accepted as a price to be paid for not acting earlier and making business with author transparent in the first place.

The big question is whether this new wave of Author Care is to be consistently applied across all publishers, or remain as a tool by the big publishers to differentiate them from the smaller ones who will find it difficult to compete. As the creators are the ones who input the most it would be great if industry bodies such as the APA or AG could help facilitate a similar service for smaller publishers and their authors.

There will always be issues re timing and accuracy of the feeds but as the likes of Bookscan have proved, there should be no reason in today’s world why information lines are so broken and inconsistent.

Authors should only need to see actual sales to consumers, not the units shushing around in the market. Trying to explain sale or return movements to authors may prove a very interesting exercise and its not one that they need to understand today. However they will need to see special sales as units sold firm to intermediaries.

Digital sales are different and should be instantly available, as in theory, they only leave the digital warehouse when sold. However the more these are with aggregators the more difficult this often becomes. This brings us to the next logical issue of royalties and whether this new era of transparency will lead to a long overdue open reporting on royalties and speeding up of payments? As more contracts adopt reward based on net sales the actual cost of sales and not price paid by the consumer becomes important. With respect to digital sales and the agency model there is little reason why monies earned should not straight forward and even transfered in the swipe of a card. We realise that may be too much to ask but it should not be too much to strive for.

As many author advances and rewards shrink we must strive to look at ways to keep them better informed and pay them quicker.

MySpace Heads Downhill, Whilst S&S Seek A Tweens Social Solution

Remember a social networking site called My Space? It transformed Lily Allen from a bedroom performer into a star and the Arctic Monkeys from an obscure Sheffield band into headliners. It once had the market share of social networks and was the place to socialise, but today it is shrinking, looks like yesterday’s news and is no longer the hip and the place to be seen.

MySpace have already tried to refocus the service on music, but perhaps music alone and a ‘music destination’ is just not enough.

Analysts ComScore claim that MySpace lost more than 10 million unique users worldwide between January and February this year, reducing the number of users from 73 million down to 63 million. Worse still is the year on year drop which equates to some 50 million. Some may say these figures are very respectable and they would be if the trend was in the ascent but in the decline they could so begin to freefall.

MySpace has already announced plans to cut some 500 of its workforce and Rupert Murdoch's News Corp 2005 purchase is starting to turn into a dog and some would now value it at around just 15% of the £330 it cost.

Facebook and YouTube have established themselves as the social hotspots today with many now falling by the wayside. MySpace even faces further competition from streaming services and blurring of media MySpace looks destined to become either very niche or quickly forgotten part of News International.

Meanwhile there are plenty of social wanabees and last week Simon & Schuster Children's Publishing has launched an online interactive book club for tweens on Everloop, a recently launched social media platform for tweens. Simon & Schuster had launched the club to connect tweens with favourite books and authors and will begin with "Dork Diaries: Tales from a Not-So-Fabulous Life," by Rachel Renee Russell and "SPHDZ Book (hash)1!," by Jon Scieszka. Book club members will be able to engage in online discussions with authors.

Connecting young readers and authors is hard as sites like Facebook are very conscious of the dangers of social networking and bans a reported 20,000 children a day from using the service. So along comes Everloop to fill the gap between the ages of 8 and 13 and ties every child to an adult but just because the adults like it doesn’t mean its hip to the kids and it still has to police this ultra sensitive market? Once a child is no longer a tween then by its own rules it moves on and probably to Facebook. If Everloop succeeded it could be huge, if it fails it goes the way of Bebo, AOL and others who have been down this path.

The problem for publishers is that they are struggling to build up a network and build a service. When the figures don’t meet expectation they then have to determine whether its down to them, or the service.

"D'oh!",

Publishers build social networks sites around, students, authors, genre, and of course teenagers. Some like Tor.com are trying to create a vertical community, in its case for Sci-Fi lovers, others such as the new ‘Pulse It’ from Simon and Schuster, just go for them young.

Do they work? Well if they didn’t they would be building them would they? When you start with a base near zero then all sales look good. It is not difficult to see why Simon and Schuster shouldn’t get traction as they are; giving away one book a month to be read online for free, points for reviews and site actions, and users can win free books and other prizes. The trick is often not starting a social community but still being there and getting that ‘stickyness’ to keep them coming back. Obviously publishers also have to be able to compete with the others. The everyone needs to respond to change and get that most important thing the user gives - time. We wish them well, but wonder if it were better inside a larger social site rather than competing with other publishers and social sites.


We looked a Tor.com and were impressed that they have taken an inclusive and not exclusive position, inviting other publishers to sell and promote their own titles alongside theirs. This is a brave move indeed for a publisher and one we have long advocated and support. Is it any different to sites like Baen,com? Well that a personal call but we believe it lacks that Baen roughness and clear Sci – Fi design. However, the designer tee shirts and mugs and blogs are all interesting.

However, why did HarperCollins put the Simpsons Mini Calendar and Simpsons Work Calendar 2010 on the Tor.com site – obviously not quite science fiction to most of us, or perhaps they knew something we don’t. After all Homer does work at the Springfield Nuclear Power Plant!

Dear Author

The news today from Richard Curtis’s eReads blog, ‘S&S Follows Random in Reduction of E-Book Royalties’, may have raised some eyebrows. We wondered how the news may be broken to agents and authors. The letter below is purely fictious and is not representative of any letter that may have, or may be sent.

Dear Author…

We are all excited about the potential opportunities that digitisation offers the book trade and although sales today are relatively small, we are convinced that through our astute business negotiation we are building digital business models and distribution channels, that will ensure that we get our due return on our huge investments.

As you know we are investing huge sums of money in our digital programs and when we finally get round to digitising the total publishing process this will make us more productive and lower our cost base. We will also be able to digitally promote your works so benefiting all.

We realise that you enjoy bookshop library visits and signings, so we are pleased that these will continue for the physical books. Obviously, many small independents will not be able to sell digital copies and ebooks can hardly be signed, so we are therefore focusing on all the big aggregators, Amazon and of course the new breed of booksellers, Google, Sony etc. These will obvious sell lots of stock, albeit at maximum discount.

You may be aware that some major publishers have just announced, (Simon & Schuster and Random House), that they are unilaterally switching to a 25% royalty on net receipts on digital and audio download sales. This obviously is a greater % for you and everyone benefits. Some would suggest, today's list price has to be inflated to accommodate the increase in discounts being demand by many resellers, but in our case it clearly is not so. We also believe that the digital recommended price should reflect the current edition. This would align the recommended price to that of the hardcover when that is out and the paperback when that comes out. We realise that the consumer may be a bit confused as to why the price of for the same title, in the same digital format, with the exactly the same content, is the same, but they will get to understand its down to marketing and selling it at premium and then discounting it later. We are convinced the big resellers will understand. You may wonder what happens in Europe with VAT and how the recently announced potential drop in tax due on digital copies will affect the price. Many of us today merely deduct the tax of the list and stand this, so any reduction will benefit both of us as we will keep the price the same.

We were sorry that we upset you when we tried to take away the right reversal clause in your contract, but we have help shape and support the historic Google settlement that among other things sorts the problem out and also mops up all those poor lost orphan works. We realise that you may be also wondering about the Google settlement and how it will effect you and why Google is paying a different rate on sales and how they derive the price of your old books that are no longer in print. Don’t worry we will as ever, support your best interests and reflect this in your royalty statement.

Yours…..

Scribd: Noise or News?

The announcement that a group of major trade publishers were embracing Scribd as a means of promoting and distributing books was interesting. The players include Random House and Simon and Schuster and therefore carry weight. The Scribd service has collected much in its short time and could be described by some as a virtual filing cabinet of stuff ranging from powerpoint presentation, school reports, essays, memos etc.

It has ebooks which can be best described as somewhat long tail and which often expose limited views of stuff you would frankly aviod if you weren’t desperate to pass time.

So we have a repository that can be filled with widgets and ebooks and other book stuff but will that lead to sales and traction or is it merely scattering seeds and hoping for some to take?

Scribd does present a good opportunity to increase viral marketing into social networks and create recommendations but does it pass the ‘so what’ test? Today Scribd remains unprofitable and is still supported by its $14million initial Venture capital

Rights Reversals

Can you believe what some may describe as the arrogance of some publishers to use digitisation as an excuse to land grab copyright?

We wrote about Simon and Schuster’s latest attempt to ‘muscle’ their creative talent into new contracts, which some will say, would give them copyright until it becomes public domain. Then one day later, we read in the Bookseller that Random House Group is pursuing a similar approach.

The Societies and guilds that represent authors must now raise their members’ and also the public’s awareness to the issues and potential grab that is being attempted. It is important that the reasons why it should be rejected are spelt out and not merely negotiated behind closed doors.

It is not good enough for the publishers to claim the world has changed and that contracts must reflect this. No one would dispute that contracts need to be revisited, but the changes some propose are at best questionable and worst unjustified. Once contracts have been changed it is unlikely that they will be reversed. Some may say that publishers are protecting their digital investment, others that they are acting selfishly and building their assets with little commitment to sharing risk or reward.

The problem is not digitisation but the urban myths and lack of full understanding around it. We are not describing a mature market, but one that despite much hype has still to take off. Where is the public debate? Where is the dialogue? Where are the facts and the economic cases? Are the agents fully educated to the bigger picture, or are they like many struggling to keep abreast of a rapidly changing environment?
Hollywood writers took to the streets to fight their case, but can we expect authors and their agents stand firm against the hand that feeds them?

If the PA, APA and guilds and societies do not educate and open the up the debate, we potentially face stand offs, bad press and most importantly, the reversal of contracts, lead by not the majority but a few and impacting the total industry as we know it today.

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.

Authors Aren't Just For Christmas

We all are very cautious about generalising and are very aware of the huge variations in the services offered by agents and their individual performance. In some cases the agent is little more than an estate agent, a football agent or a dating agency, merely connecting parties and agreeing terms, in others they are akin to mangers and take care of the author’s life. Somewhere between these two extremes lies the vast majority.

Today the roles and relationships are changing. We now have the ability to connect authors with the market in ways that were not possible only a few years ago. The world is no longer publisher centric it is consumer centric and this dramatically challenges much of how we worked yesterday.

Recently we have even seen an agent trying to position themselves as ‘publisher’ and take on rights reversals on a print on demand basis. Today we read in Publishers Weekly that Simon and Schuster are setting up a speaker bureau. This joins the ranks of other major US trade houses and is focused on finding its authors speaking engagements. Also today’s Bookseller tells the same story albeit from a different angle, with PFD agency stating that they want to develop their brief to cover public speaking, presenters, exhibitions and manage their client’s careers. It will be interesting to see where the role of the agent goes tomorrow.

So can we now envisage a minor scramble for the author, with offers of marketing, publicity, brand building, blogs and websites, tours, exhibitions and slots on the speaker circuits and television? We can imagine everyone scurrying around the author all asking, ‘Can I carry your books for you?’

The question is who is best equipped and who has the longer term interest in the development of the author, their brand and development of their fan base? Do either agents or publishers, as we see them today, have the skills and long term commitment? Do others enter the market to fill any void and in doing so create a new social community, or do authors have to do it all themselves?

Who's Copyright is it?

Today we read from the excellent Booksquare blog http://www.booksquare.com about Simon and Schuster’s approach to changing the rules about rights reversals. It is reported by Booksquare that Simon & Schuster have announced that it is changing its standard contract to retain rights to a book for the entire length of a copyright. Simon & Schuster recognise they will now own the rights to a work and are able to distribute it for 70 years after the death of an author for works created after 1978. This change raises many questions, such as, whether electronic rights are deemed subsidiary rights or remain primary rights and the impact of this change on royalties and permissions in a fragmented world.

Authors, by default and law, own the copyright to their work. Publishers merely acquire the right to publish or distribute the author’s work.

Publishes will argue that the move is good for authors and that the technology now enables this natural change. They are all embracing print on demand technology and this in turn is presenting by the authors and publishers the opportunity to keep their books alive, available and selling in the marketplace in a way that was not previously possible. The new Simon & Schuster language essentially means that as long as a book exists in the publisher’s “catalogue”, the publisher owns the rights.

Let’s get real. Publishers make mistakes, not all books make it first time round and some need a second opportunity. This could be viewed as locking up the art works in the vaults merely for the sake of owning them. The majority of contracts today enable the rights to revert back to the author once the title has gone out of print. There may be a period where the reprint is under consideration but once out of print the option exists but in the world of POD, titles may remain always “in print” and this now makes this a major digital issue. Will the publisher continue to market and actively sell the “long tail” of titles as they move from in-print to POD, or just put it on the pod bookshelf and deprive the author of republishing it with someone who cares about it and is willing to invest in it? Will they literally sit on it and wait for the search engines to find it and collect the money for nothing.

We could work together to protect the interests of the creators of wealth, the authors, or as we fear , just turn a blind eye and hope that fair practice will prevail

Place your bets on the next best seller

So its official publishing is a gambling business and spread betting is real. A very well respected consultant James Lichtenberg who I once had the pleasure of working said the publishing was like two frogs mating. They created millions of spawn, which turned into thousands of tadpoles, which turned into hundreds of tiny frogs, of which a handful made it onto the bank where one was kissed by Oprah and became a best seller. The story being you needed the millions of spawn to make the selection process.

So we hear today that the founders of Media Predict (www.MediaPredict.com), and US publisher Simon & Schuster, plan to select a book proposal based on bets placed by traders in the new market.

Media Predict is soliciting book proposals from agents and the public and posting pages of them on the site. Traders, who are given $5,000 in fantasy cash, can buy shares based on their guess about whether a particular book proposal is likely to get a deal, or whether Touchstone Books, an imprint of Simon & Schuster, will select it as a finalist in a contest called Project Publish. If either happens within a four-month period, the value of the shares go to $100 apiece; if not, the share price falls to zero. Traders are not voting on the book they like best, but rather are placing bets on which they think will do well. The success of the site is dependant on it attracting enough traffic to make the bets meaningful. Similar sites in other sectors such as the Hollywood Stock Exchange, are reported as capturing about 25,000 traders a day.

Reaching out to consumers

We now have books being promoted to consumers! Sounds logical and many will say that has always been the case but the cynic would point to the Bookseller and Publishing News and question the point of spending so much on advertising to the retailer.
We have seen the growth of marketing on underground and press. Then came the podcasts and experiments on MySpace and YouTube and HarperCollins video promotions. We now have news from Simon and Schuster that it is to launch a book video channel called Bookvideos.tv to promote their authors and new releases. The new channel, will launch in early June and will be available online on their website and major video-sharing websites like YouTube.

Simon and Schuster has committed to at least 40 videos, with the possibility of more in the future, that will be two minutes long and focus on the authors and their stories, not so much with the specific books.

It will be interesting to see if these take off through viral marketing and the “community effect” or die in the “so what” world.

Experimentation is essential and reaching out the consumer is obvious and these intiatives should be applauded. The question is making sure that the spend is effective and doesn't tip the balance between profit and loss.