What’s a fair ebook royalty?

This is a question that’s come up quite a bit lately with author and editor friends. Are the current standard ebook royalties (25 percent of receipts) fair? And if not, what would be fair?

The argument for raising royalties to 50 percent or greater of receipts is that ebooks don’t cost publishers anything to produce: no paper, no printing, no binding, no warehousing, no shipping, no returns. Whatever investment in editing, promotion, typesetting and design that the publisher made, had to be made in order to produce the print book. Producing an e-version is a trivial additional cost. So authors should get at least half because for the publisher, ebook revenue is gravy.

That argument assumes that everything stays the same in publishing and that ebooks will continue to be a small portion of books sold. We know, however, that publishing isn’t staying the same. Sales of e-readers and ebooks have risen dramatically in just the past year. Between the Kindle and the iPad, almost everyone expects that the ebook will be embraced by more readers. The pace of adoption should increase dramatically. The open question is how to quantify that adjective “dramatically.”

And for virtually every ebook bought, a print book isn’t.

Right now, ebooks are estimated to be about 5 percent of the market. What happens to the industry when they’re 25 percent?

Anyone who has read this blog more than once knows that I’m a fierce advocate for writers, am against the Google settlement because it’s a worse deal for writers than writers can get on their own from Google, and have urged writers to stand up for their rights on pay, copyright, and other issues.

So you might be surprised to learn that I’m not convinced that writers should demand 50 percent of receipts for ebook royalties.

I agree that 25 percent of receipts is too low. Publishing guru Mike Shatzkin estimates that on hardcover books, the “standard” royalty of 15 percent works out to about 27 to 32 percent of receipts, which in turn, after expenses, splits profits about 50/50 between author and publisher.

A 50/50 split of profits is fair. But that’s not the same as a 50/50 split of receipts. One day soon, e-publishing won’t be all gravy. It will be the way we publish books. And all the costs associated with publishing books (minus the printing and other costs that printed books incur but ebooks don’t) will have to factored into ebook pricing and royalty calculations.

You can bet that publishers are already factoring the future into their calculations as they set their 25 percent of receipts royalty schedules. Nobody can accurately predict the future though, and publishers are giving themselves ample padding.

The issue we need to address is how should receipts between publisher and author be split to account for a future where ebooks are a big chunk of the books sold?  The goal should be that, after publishers’ costs are covered, authors and publishers share the profits 50/50.

The percentage of receipts authors would get with a fair (50/50 profit) royalty system is not 25 percent of receipts. But it’s not 50 percent of receipts either.

– Anita Bartholomew

The Link Between Method Acting and Writing Believable Characters

In one particularly funny episode of the TV series, Monk, a production company is filming a movie based on one of Mr. Monk’s cases. The method actor (played by Stanley Tucci), cast to play the detective, studies him so intensely, he develops the same phobias, quirks, and crime-solving skills.

We’ve all heard of method actors “inhabiting” their characters, but what does that have to do with writing? If you’re writing character-based narrative, more than you might expect.

For my current project, co-authoring a doctor’s memoir, I spent probably hundreds of hours in interviews, probing her thoughts, experiences, remembrances of places and people, and learning more about her from additional interviews with those close to her. The process was only complete when I felt able to imagine what it was like to be in her skin, experiencing what she experienced.

I joked with her that it’s a little like Mr. Spock’s Vulcan mind-meld. But I was half serious too.

Because when you’re writing from the point of view of a character, real or fictional, you can’t do the character justice unless you become so enmeshed, it’s as if you’ve seen through the character’s eyes.

If you can’t inhabit the character to some degree, what you write from that character’s viewpoint won’t feel real to the reader.

– Anita Bartholomew

Sales of ebooks nearly triple from 2008 to 2009

The headline says it all. E-Reads reports that, from August 2008 to August 2009, ebook sales shot up from $5 million to $14.4 million.

This may be bad news for traditional publishers but it has the potential to be excellent news for the small publisher, especially the one-person shop, publishing his or her own title.

It means that there is a market for ebooks and that market is growing like kudzu.

It does not mean you can simply publish and hope that people find your books, buy them, and recommend them to their friends. You still have to publish a book that is compelling enough to rise above the pack, with a great story, well-told, and a satisfying ending. You still have to promote the hell out of the book. Otherwise, no matter how great it is, nobody will know it exists.

But if you can turn out something that others will want to read and if you know how to reach potential readers, you have an easier entry now that at perhaps any other time in history.

– Anita Bartholomew

How Demand Studios’ exploitation of writers turned it into a billion dollar company

Wired has a fascinating article about Demand Studios, one of the word factories that regularly advertises for writers, only to exploit them. You can’t claim Demand pays writers peanuts. It’s more like peanut husks.

It’s worth reading the article to learn how this sweatshop-type operation makes such big bucks. But here, we’re only concerned with the pennies it pays to the people who made it possible for Demand to become the billion-dollar enterprise it now is. The snippet below provides a hint:

It’s the online equivalent of day laborers waiting in front of Home Depot. Writers can typically select 10 articles at a time; videographers can hoard 40.

Nearly every freelancer scrambles to load their assignment queue with titles they can produce quickly and with the least amount of effort — because pay for individual stories is so lousy, only a high-speed, high-volume approach will work. The average writer earns $15 per article for pieces that top out at a few hundred words, and the average filmmaker about $20 per clip, paid weekly via PayPal. Demand also offers revenue sharing on some articles, though it can take months to reach even $15 in such payments. Other freelancers sign up for the chance to copyedit ($2.50 an article), fact-check ($1 an article), approve the quality of a film (25 to 50 cents a video), transcribe ($1 to $2 per video), or offer up their expertise to be quoted or filmed (free). Title proofers get 8 cents a headline.

Don’t write for these — or any — exploiters. Leave these crumbs for the amateurs. I know it’s tempting, as newspapers die, and magazines fight for survival, to take whatever work is available. But writers who do so help perpetuate their own exploitation.

Write a book, instead. Either shop it to agents and publishers or invest in publishing and marketing it yourself. There are plenty of new publishing opportunities to explore, from the Espresso Book Machine which is rolling out a few new locations and may soon make the printing of a single book as cost-effective as printing in bulk, to ebooks, which already eliminate the costs of distribution, warehousing and shipping.

– Anita Bartholomew

Noooooo, not Heathcliff, too

I loved Interview With The Vampire, but that was probably the last vampire novel I could say anything remotely as positive about. Yet, I know I’m in the minority. Friends and colleagues swoon over Charlaine Harris’s vampire series and the Twilight books have probably outsold Harry Potter by now.

But can’t we draw the line somewhere, people? Must it really come to this? Publishers Lunch reports the latest vampire novel sale:

Sarah Gray’s WUTHERING BITES, a retelling of Wuthering Heights in which Heathcliff is a vampire, to John Scognamiglio at Kensington, in a very nice deal, for publication in September 2010, by Evan Marshall at Evan Marshall Agency (World).

– Anita Bartholomew

Publishing at the crossroads: who will own the future, you or Google?

I’ve written before that I believe the Espresso Book Machine (EBM) from On Demand Books,  could be a publishing industry game-changer, as much and even more so than the advent of ebooks. Although the EBM is only in 10 locations now, the wide distribution of EBMs or other machines like them, would allow authors, with new or out-of-print books, to publish their own work, at lower costs than are now generally available from POD printers. Because the books get published at the bookseller’s site, the author-publisher isn’t saddled with the significant costs of warehousing, shipping and distribution.

And returns? That would be a store-by-store policy issue but here, too, the savings to the author-publisher would be significant. If a store with an EBM permitted returns, the author-publisher might have to bear those costs. But the author-publisher would be spared the expense of refunds and two-way shipping on unsold  books that were published sans demand, and then removed from the shelf and returned when demand failed to catch up to supply.

The lower overhead opens up all sorts of possibilities and Google is now showing us that the game could go either way for those who want to breathe new life into their old books.

A story today in Wired says that Google is going to offer public domain (out-of-copyright) books via the Espresso Book Machine:

Over the last seven years, Google has scanned millions of dusty tomes from deep in the stacks of the nation’s leading university libraries and turned them into searchable documents available anywhere in the world through its search box.

And now Google Book Search, in partnership with On Demand Books, is letting readers turn those digital copies back into paper copies, individually printed by bookstores around the world.

Or at least by those booksellers that have ordered its $100,000 Espresso Book Machine, which cranks out a 300 page gray-scale book with a color cover in about 4 minutes, at a cost to the bookstore of about $3 for materials. The machine prints the pages, binds them together perfectly, and then cuts the book to size and then dumps a book out, literally hot off the press, with a satisfying clunk. (The company says a machine can print about 60,000 books a year.)

Two issues the story doesn’t address give us the clues to what makes this so technology so important to those of us who make our living by the written word:
The possibility for POD editions had been treated as a “maybe someday” clause in the Google settlement. Someday is here, it seems, the moment the settlement gets the judge’s thumbs-up (if it does). Assuming the same pricing structure as the out-of-copyright books, Google gets a dollar, and passes along 63 cents to the Book Rights Registry (BRR). The BRR passes along to publishers what’s left after taking its unknown cut. Publishers pass along to authors — what? Maybe 10 to 25 cents per book sold?

Contrast that to what an enterprising author might get by republishing her or his own out-of-print book and offering it via the EBM. Costs to print via the Espresso Book Machine are just $3 in materials plus whatever the bookseller adds for profit and the cost of amortizing the EBM owner’s investment in the machine. But on the author-publisher’s side, when you consider eliminating the costs of warehousing, shipping, distributors and returns, you’re likely to be about where you’d be with a traditionally published book with one enormous difference. You’ve removed the uncertainty factor that drives costs to unknown, profit-killing levels and keeps so many would-be author-publishers from going it alone.

When you’re no longer working on the crazy model of providing books on consignment and assuming all financial risks, you might actually be able to run a profitable business as an author-publisher.

Can you say the same is anywhere near possible if your books are coming out of the same Espresso Book Machine but the money goes to Google instead?

– Anita Bartholomew

Biggest challenge for publishers=biggest opportunity for authors?

The Frankfurt Book Fair is conducting a survey of publishers to learn what they believe will be the business models of the future.

The second question on the survey is interesting because it points to a potential shift in the balance of power in publishing from publishers to authors.

In your opinion, what are the three biggest challenges for the media industry? (Please check three answers)

Along with digitization, piracy, the economic crisis, oversupply and other issues, one of the 10 possible answers that you get to choose as among the three biggest challenges to publishers:

– Strengthened position of authors (increasing possibility for direct marketing without a publisher/bookseller)

The fact that this is one of the possible answers tells you that the market is shifting dramatically.

The fact that the following is also among the possible answers tells you we are at a crossroads.

– Concentration of distribution channels

Either authors will gain significant power in the new marketplace or big players like Google and Amazon will so overwhelm us all that we would do well to learn a new trade that will always be in demand, like plumbing.

We live in interesting times.

– Anita Bartholomew

Google settlement an “end run around copyright law” says Register of Copyrights

Finally, Congress is reviewing the settlement. Where have they all been until now?

From a report in The Wall Street Journal:

The head of the U.S. Copyright Office told Congress on Thursday that she had serious concerns about Google Inc.’s (GOOG) legal settlement with authors and publishers who sought to block the company from scanning books and making them searchable online.

Marybeth Peters, the register of copyrights, said in written testimony before the House Judiciary Committee that the Copyright Office was particularly concerned that the settlement would allow Google to display and distribute out-of-print books without prior consent from the copyright owners of those books.

“To allow a commercial entity to sell such works without consent is an end-run around copyright law as we know it,” Peters said.

“In the view of the Copyright Office, the settlement proposed by the parties would encroach on responsibility for copyright policy that traditionally has been the domain of Congress,” she said.

Wall Street Journal says that Amish romance novels are hot

Can Quaker military histories be far behind?

Snippet:

… Amish love stories, which are a booming new subcategory of the romance genre. The books, written by non-Amish writers, are aimed at a mainstream audience. But Ms. Woodsmall researches her stories among the Pennsylvania Amish, and she has a loyal Amish following.

The plot of her 2006 novel, “When the Heart Cries,” revolves around Hannah, a young Amish woman who falls in love with a Mennonite and hides her plans to marry him from her strict parents. The lovers struggle to overcome the cultural divide, and actually kiss a couple of times in 326 pages: “His warm, gentle lips moved over hers, and she returned the favor, until Hannah thought they might both take flight right then and there. Finally desperate for air, they parted.”

ASJA, NWU, argue against their own Reed Elsevier v. Muchnick settlement in Google objection

This is pretty amazing.

As some of you know, I am one of the objectors to the class action settlement reached by ASJA, NWU and the Authors Guild with Reed Elsevier and other databases and periodicals publishers. There, as in the Google case, large corporations had infringed the copyrights of a huge number of writers.

My objection in that earlier case was simple and mirrors the reasons I’ve protested the Google settlement. The writers’ organizations — ASJA, the Authors Guild and NWU — agreed to hand over, to the Defendants, the future rights of anyone who didn’t file a claim or opt out.

(See the Tasini case for the genesis and a bit of background; also see Irv Muchnick’s blog, which outlines every move since,  in excruciating detail).

Defendants also got the only thing they should have been given, what Defendants normally get in a settlement: release of the claims of past wrongdoing.

I objected to the theft of the rights of absent class members, first to the leadership of ASJA and then, when I could not get them to budge, to the court.

Fast forward to yesterday, and ASJA as well as NWU (as part of a group called the Bloom objectors) have filed an objection to the Google settlement.

Their key argument?

“… after approval, Rightsholders will be deemed to have granted a license by virtue of doing nothing.”

In other words, ASJA and NWU, both of which once agreed to give away, to Defendants in the earlier class action, the future rights of periodicals writers who fail to opt out or file claims, now object to giving away the future rights of book authors who fail to opt out or file claims.

ASJA’s aggressive support for what I saw as theft in the Freelance settlement is the primary reason I resigned from that organization. That was no small thing for me. I’d been a very active volunteer on the First Amendment  and other committees, and had served on the board.

I’m glad to see that ASJA, under the new leadership of Salley Shannon, finally appears to understand that it’s unethical to bargain away the rights of some writers in exchange for better terms for the writers you represent.

Better late than never.

– Anita Bartholomew