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Publishers Are Not As Dumb As People Think

Most observers and even some authors believe the major publishing industry has been slow to respond to the electronic-book era. True, the industry is struggling with pricing while trying to protect hardcover sales and has not been especially welcoming of digital books, especially those that compete with their higher-priced versions. But they have not been putting their heads in the sand, either.

Publishing contracts of this century almost universally grant publishers the electronic rights to the content, and those clauses may have seemed innocuous even two years ago, when e-book sales were negligible. The clauses that were afterthoughts returned the electronic rights to the writers when the book went out of print, back when that term was more cut-and-dried.

But, increasingly, the publishers are setting clauses that lock in the license as long as some minimum sales levels are reached. I don’t get a lot of contracts these days, but the ones I know about generally have numbers like “If ebook royalties reach $100 in a six-month period, the clause automatically renews.” In other words, if some laughable minimum of sales is met, the publisher retains the rights. Possibly forever, if the clause keeps renewing.

That is literally indentured servitude that traps writers over an entire career, at least those unlucky enough to have the moderate success needed to stay trapped by the clause. Ironically, those writers who are most deeply invested in The System are the ones who are going to be in the worst shape in five years, and even worse in 10 or 20, their retirement years, when they will be getting nickels instead of dollars.

You’d think agents and authors would be screaming about this development, but the ones who are most invested in The System are the ones most actively in denial. Look at the agent blogs–most are talking about how challenging the current system is and how lousy the quality of submissions are (when they are not actively making fun of some poor author’s query letter), not how their roles may be diminishing, and very few (I’ve only found one) will admit that the current ebook clauses are suicide. I know agents have fought these battles with publishers, insisting on better e-book terms, but at the end of the day, you just get the most you can right now and take your 15 percent. Any agent who did otherwise would be either looking for job or heralded as a true advocate of the author. In other words, blackballed by New York.

In today’s publishing environment, you still need an agent and the agent still needs to get a significant deal. It makes sense for them to do the best they can right now and not worry so much about the long term. Unless the client is a blockbuster, the client likely will not be earning royalties or a lifetime revenue stream anyway.

Even if you are an e-book phenomenon, you will do better if you have shelf presence. Take Boyd Morrison’s deal for The Ark, after making a name selling $1.99 e-books. He was signed by a major publisher and now his e-book is $11.99 and he’s not making much more per sale than he did back then–and the poor consumer is expected to pay six times the price. By Boyd’s own admission, the biggest edits were some minor stuff and the changing of one character’s name. Where’s all that extra money going and what value was added?

Publishers are great at distributing books and can afford to ship free copies to the numerous book bloggers, who often seem to be reviewing the same book at the same time. That’s been the carrot publishers are still holding out while they grip the stick to beat authors over the head. “You’re not a real writer and no one will review your books” is still a powerful tool.

If publishers use the carrot to lock down long-time e-book rights, and ebooks become even 20 percent of the market (as is predicted by 2015), then those publishers have just made major bank, and will continue to do so as e-books increase in popularity. I don’t see anyone predicting the genie will be shoved back in the bottle and all this new-fangled technology will get boring. After an e-book is published, it is nothing but content, and the publishers will be skimming both the cream and the milk, with little additional work besides dipping the ladle. As the e-book market grows, those publishers who have hoarded the most content will be on Easy Street. Those writers who gave the most away will be in the soup-kitchen lines, or, if they’re lucky, they will be the beneficiaries of charity auctions at fan conventions.

Agents are debating whether it’s better for the writers to get 15 percent of list or 25 percent of net–well, what about 70 percent of gross? How about that, Mr. Agent and Ms. Publisher? (And, by the way, you can trim 15 percent off that 15 percent, so the writer is getting around 13 percent.) And when e-books reach their natural price range of $1-$5, those writers will be getting a quarter a copy and have no control over anything, while publishers will have an easy, ongoing revenue stream because they essentially own the content (you can call it a “license,” but if it’s for a rock-bottom e-book floor to keep the clause active, then it will last forever).

Sure, publishers will be happy to return your rights once the content is worthless, meaning your career is dead and every drop has been squeezed from the teat. Of course, agents will get their spillover as long as their names were on the original contracts.

The odd thing is how little the word “author” appears in all this discussion of “The Future of E-books.” But, then, most authors went into writing because they were lousy at math. And, I suspect, they like getting beaten with sticks.

Scott Nicholson is author of 10 novels, including Drummer Boy, The Red Church, The Skull Ring, and They Hunger. He’s also written three story collections and six screenplays. He works as a journalist and freelance editor in the Blue Ridge Mountains of North Carolina. His web site is Haunted Computer and he also operates Indiebooksblog

  • http://www.selfpublishingreview.com/members/erichammel/ Eric Hammel

    Completely on point and correct, Scott. The rise of ebooks has reached the point at which authors and agents should be willing to terminate negotiations and walk away from whatever their hearts tell them is an inequitable erights deal. And an agent’s willingness to go to the mat over erights should be a significant factor in his being selected and retained by a working author.

  • http://kaitnolan.com Kait Nolan

    Right on the money, Scott. The thing is–it’s NOT that publishers are stupid. It’s that they don’t REALLY give a damn about consumers–they feel like they hold all the cards (and really, they do), and they sure as hell don’t care about the authors–without whom they will have no product. Until more and more authors wise up and walk away, either taking Konrath’s route or skipping traditional publishing entirely, the publishers will continue to have all the power, while paying the author an absolute pittance via terms that favor no one but the publisher itself. But it’s decades before such a movement might happen because there are too many authors who are either ignorant, brainwashed, or just plain scared of stepping out on their own. I think we’ve gotta see more major successes before authors will wise up and realize that in the end, the power ultimately resides with them–but only if they don’t give it up in the first place.

  • scottnicholson

    Kait, I don’t think publishers are that crass–I just think they operate behind vast corporate walls that keep them totally away from readers. Their ONLY measuring stick is numbers. If a book sells, they think it is “good.” Many major authors will hold the Scott Turow line–he sounds like some cranky old grandpa yelling at kids to quit playing on his lawn. Of course they will, they have a lot to lose, and it’s called “market share.”

    Those less invested could care less about propping up NY. They have little or no market share and thus nothing to artificially protect. It’s only temporary, though, as ebook prices drop, publishers get lean and mean (the survivors, anyway), and all these new indies are going toe-to-toe with established writer/avatar/brand names at the same prices.

    When the product is little more than pure content owned by the author, the hangers-on will be struggling to add value–which they may actually achieve if interactive “transmedia” books catch on. Then, once again, those with the means will profit. It is a beautiful, exciting, crazy time!

    Scott Nicholson
    http://www.hauntedcomputer.com

  • http://www.bloggernews.net Simon Barrett

    This is a very observant article. Although not a major part of your story I do want to comment on the ‘you will never get reviewed’ comment. It is one that I have heard many times, yet in fact it is an argument that holds no water.

    I am a reviewer, and I work with many authors, some of them are self published, some through traditional houses. When I see a project that I find appealing (yes I do look, and yes I only pick books that I think I will enjoy) my mission is to contact the author direct. If I cannot, and the only option is to work through the publisher, I just move on.

    Why do I take that approach? It is because Publishers could not give a damn, they are as unhelpful and uncooperative as they are full of self importance. Rarely, if ever do they have the authors interest at heart.

    When a publisher gives you that ‘you will never get a review line’, remember that there are people like me out there.

    Don’t let these people bully you.

    Simon Barrett – editor

  • http://www.selfpublishingreview.com/members/lenoxparker/ Lenox Parker

    I read the title of your post dyslexically at first: Publishers Are Not As Think As People Are Dumb.

    Not a coincidence that I continually wonder–now more than ever–why writers are still so desperate for attention by publishers. Apparently most haven’t yet gotten the memo.

    lovelenox.

  • scottnicholson

    Simon, so true–the first time the bell went off for me was when my publisher asked me to stop sending out press releases to reviewers and newspapers including info where they could request a review copy for the publisher. Editor: “Stop! We can’t handle it.”

    They really don’t want reviews unless it is for those books for which they are deeply on the hook and must scramble to make money back. Everyone wants to look good, not necessarily sell every book.

    Scott Nicholson

  • http://www.bloggernews.net Simon Barrett

    Scott,

    This is a subject that makes my hackles rise. The Publishers offer great stuff when you start out. But as soon as you get the first set of books in your hands, they generally bow out of the project.

    The author is on his, or her own. I am long in the tooth in the reviewing business. The three stages of bring a book to the shelf get progressively harder. Its hard to write the thing, it is harder still to find a publisher, and it is hardest of all to market it.

    If you want your book to sell, you have to be prepared to work for it. It doesn’t matter if you are self published or from a trad house. When it comes to pumping up interest, only the author can do it.

    It is the author that must put the effort in.

    Simon Barrett

  • http://www.selfpublishingreview.com/members/erichammel/ Eric Hammel

    I think there is something central to the SPR community’s view of traditional publishers that is well and truly missing. How many commenters have worked with traditional publishers on more than one book?

    I have a lot of hostility toward Big Publishing, all honestly earned while in their midst. And they have some hostility toward me for calling their bluff on numerous occasions. I have been out-and-out blackballed by one of the largest publishing combines in Earth.

    BUT . . .

    There is a good side to traditional publishing that nearly all the folks here have missed. And by missing it you miss the real allure of a fruitful career as an author.

    I am speaking of the personal relationship you can build up with a decent, perhaps influential, editor over a period of time. I had that good fortune at the front end of my career as a full-time working author, a wonderful and prosperous relationship that ended in a merger, when my guy was forced out by a bigger, more influential editor in the company that bought my publisher. I went from having a great, mutually profitable relationship to being orphaned and taken in hand by a succession of losers with no influence and, worse, no chance of advancing. So that did it for me for a number of reasons, including my own resentment =and= my ability to strike out on my own.

    A good, influential editor who likes you gets you the copyeditor, jacket designer, publicist, and inside juice you need to prosper. You reciprocate by doing your best work, by asking for his advice and help, by being serially productive, by recognizing the collaboration of means all parties bring to the enterprise that is any given book. Good publishing people know they can’t write the books–something they acknowledge by taking inside jobs–so they respect you by helping you in your endeavor. It’s really quite a remarkable process when it’s done right in a collegial setting. And it’s as possible today as it was thirty years ago.

    I’ve written forty books. If I hadn’t done more than half on my own, without that team of colleagues, I might have had time to write sixty.