Ask The Editor

March 15, 2010

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

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January 7, 2010

The next big thing in e-readers isn’t an e-reader

Watch out Kindle, Nook and other e-readers. Blio, a software based e-reading platform is rumored to offer the best e-reading experience yet. It will run on anything that has an operating system.

And it’s free (but not available until the end of the month spring, says PW).

The FREE Blio eReader software is the new touchstone for the presentation of electronic books & magazines. Stunning, full-color pages come alive in brilliant 3D. Even image-rich books are now at your digital fingertips — because Blio preserves a book’s original layout, fonts, and graphics.

Enjoy a vast selection of cookbooks, travel guides, how-to books, schoolbooks, art books, children’s stories, and magazines. Relax, learn, work, or play! The smart display lets you insert highlights, notes, videos, and even webpages. Selected books also go hands-free with Blio’s read-aloud feature.

Flexible & accessible. Shop endless titles, right from the Blio Bookstore, with access to over one million free books and a huge library of today’s bestsellers. Then, take your library on the road by syncing to your favorite on-the-go mobile device.

– Anita Bartholomew

October 26, 2009

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

October 25, 2009

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

September 14, 2009

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

May 4, 2009

With all the buzz about e-readers, is anyone e-reading?

The headlines shout that there’s a new Kindle in the works, said to be larger screen to accommodate textbooks, newspapers and magazines.

But wait, say other commentators, that’s so ho-hum. The real news is that Apple is developing a tablet reader that will knock off the competition.

Maybe, say yet others, but just wait until Plastic Logic comes out with its own e-reader. Or Hearst. Or News Corp. These technological advances may just save the newspaper (without actual paper, of course).

This is all very exciting, but … what percentage of the reading public either has already adopted the new technology or expects to in the next year or so?

We know this is the future. What we don’t know is when, exactly, we expect this future to be embraced by significant numbers of readers. And, if it isn’t embraced by significant numbers of readers, and soon, technology is unlikely to do much for newspapers.

– Anita Bartholomew

April 28, 2009

Judge grants request for extension in Google settlement

Attorney Andrew DeVore had asked that the deadline for opting out or objecting be extended to September 7, 2009.  Although class action attorney Michael Boni asked that the extension be half as long, the judge has, apparently, ruled for the full four months:

In a surprise move, New York Judge Denny Chin today granted a four-month extension to a group of authors, led by Gail Knight Steinbeck, delaying the May 5 deadline to opt out or object to the Google Book Search settlement to early September. Although the order had not yet been made public at press time, sources confirmed for PW that Chin had granted the extension.

Google opt-out deadline still May 5th but court hears request for delay

From Publishers Weekly:

Last week, a group of authors and their representatives filed a request to delay the May 5 deadline. The motion filed April 24, by attorneys representing The Palladin Group for John Steinbeck and Thomas Myles Steinbeck, Catherine Ryan Hyde, The Philip K. Dick Testamentary Trust, Arlo Guthrie, Michael W. Perry, Eugene Linden, and James Rasenberger, asked the court for a four-month extension, with October 7 marking the new opt-out deadline, and with the hearing, now set for June 11, to follow at the court’s discretion.

Meanwhile, in response, attorney for the publishers’sub-class, Michael Boni, said the authors’ complaint was without merit and asked the court to reject it. However, Boni, said that “independent of” the authors motion, “plaintiffs and Google are amenable to a 60-day extension.”

The article goes on to quote New York Law School professor James Grimmelman saying that an extension is unlikely to be granted while the attorney presenting the request for the delay, Andrew DeVore, said that such a delay was necessary. DeVore pointed out that the Google settlement is “not a typical class action settlement,” because it’s not primarily about compensation for past injury but about future rights.

I’d point out that while the Google settlement is, indeed, not typical for class actions, it took its lead from an earlier class action that grabbed future rights from all affected writers for periodicals, essentially overriding copyright law by granting the Defendants future rights in all the works affected. In that class action, too, writers were “represented” by class action attorney Michael Boni, supported by the Authors Guild.

To haul out an old cliche, with friends like Boni and the AG, writers really, really don’t need any enemies.

– Anita Bartholomew

April 13, 2009

Where to get a better deal than the Google Settlement? From Google.

Several writers I know have responded privately to my posts about the Authors Guild’s settlement with Google saying that they will stay in because they believe that the future of the book is electronic. And they want their books to be part of that future.

They’ve been misled into believing that those are their only choices: take the deal or have your work erased from cyberspace.

Wrong.

You can make a better deal. Google has one that’s ready-made for you, outside the settlement.

First, opt out of the settlement. Then, if you want to make your book accessible via Google, on the web, join the Google Books Partner Program.

Your books will appear where they would have appeared if you opted in to the settlement. But this way, you keep all your rights. And you can even add a “buy this book” button to the display page of your book if you offer the book for sale at your own site.

Remember: Google wants to scan your books. Just because the class action attorneys gave Google all sorts of extra rights (taken from you), doesn’t mean you have to roll over and play dead. Turn down the bad deal. Take the better one offered by the Google Books Partner Program.

“The Google Books Partner Program is a free marketing program that enables publishers and authors to promote their books online, through Google Book Search. By submitting a digital or physical copy of your book to be displayed online, you’ll make it discoverable to Google users from around the world.”

And yes, you can earn income from this –  Google shares the majority of its ad revenue with you –  and it’s probably more than you would get through the settlement. That’s because, in the Partner Program,  you deal directly with Google,  instead of with the Books Registry being set up to administer payments from future revenues via the settlement.

Use this form to sign up. You’ll need to mail a copy of your book for scanning but you can cancel your account at any time.

Here are some of the benefits of the Google Books Partner Program vs the Google Books Settlement:

  1. You send your book to Google and request that Google scan and display the book but, unlike opting in to the settlement, you can withdraw from your relationship with Google at any time.
  2. You get the majority of the revenue from ads appearing on the same page as your book. Contrast that with the settlement where, although you get 63% of the profit, that may be less than you believe. Some experts, including literary agent Lynn Chu, speculate that as much as half the revenues will be used for administrative costs of the registry before you see your share.
  3. You can include a “buy this book” link as long as it links back to your site, not that of a third party, for purchase. So,  if a preview hooks a reader’s interest, you get to sell the physical copies of your book.
  4. In the Google Books Partner Program, you don’t give up any of the rights, written into copyright law, that you now have.
  5. Unlike the settlement, you are not locked in for the life of the copyright.
  6. If something goes sour with Google, you aren’t forced into binding arbitration. You retain all your rights to sue in court.


– Anita Bartholomew

April 11, 2009

Google settlement, part 3: Authors Guild’s false information

My friend Pat McNees runs a website with good information for writers and editors. She recently posted links to various opinions about the Google settlement. I have one quibble with her section on this topic: she implies that you can trust the word of Paul Aiken, executive director of the Authors Guild.

“If you were alarmed by Lynn Chu’s piece in the Wall Street Journal (Google’s Book Settlement Is a Ripoff for Authors: ‘Why allow a single publisher to throw out a functioning copyright system?’ ) be sure to read this letter to the editor from Paul Aiken, executive director of the Authors Guild: The Google Book Deal Will Help, Not Hurt, Authors, which points out essential errors in Chu’s piece.”

Most authors, editors, and agents I know, like Pat, are willing to trust Aiken’s word. If they had studied the settlement with skeptics’ eyes, and consulted with attorneys, they more likely would trust Chu.

First, let’s deal with Aiken’s whopper:


“Ms. Chu likes the marketplace of in-print books that authors and publishers depend on. So do we: The settlement leaves it alone. Authors and publishers of in-print books will be able to participate in the settlement’s programs, but only with rightsholders’ express permission.”

I can’t imagine why Aiken would make such a patently false statement about a central issue. It’s too long to be a typo. What on earth was he thinking?

“Express permission” means “explicitly stated permission.” Any author reading Aiken’s words is likely to accept those words at face value and assume that, without his or her explicitly stated permission, he or she will not be subject to the provisions of the settlement.

Wrong.

Here’s how you get to “participate in the settlement’s programs.” Do nothing. Bam! You’re in. That’s not “express permission.” That’s license by default.

But it’s worse than that because, although the Google settlement gives authors some control over display and other incidentals, if you do nothing, and allow yourself to be lulled by Aiken’s reassurances, you’ve also agreed, by default, to mandatory arbitration (a huge issue that Chu brought up in her op ed but that Aiken never addressed).

Here’s the gist of what you need to know about arbitration: mega corporations love it because they almost always win in any dispute:

“The fine print associated with service agreements from credit card, wireless phone, Internet access, and other service contracts is increasingly likely to include a clause that removes contract disputes from the legal system, subjecting them instead to binding arbitration. Superficially, arbitration sounds like a great way to settle disagreements while avoiding the fees and animosity associated with legal action; arbitrators ostensibly offer an impartial decision quickly and painlessly. But a report issued by the consumer watchdog group Public Citizen portrays the process as heavily slanted towards business, and a Kafkaesque nightmare for individuals.” [emphasis mine – Anita Bartholomew]


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