How publishers cheat authors with discounts

[Brian G Turner]

The Author's Guild isn't normally seen to be leading the charge on author rights, but even they've been stirred up to complain about the "double-discount" contract clause which has apparently become the norm in traditional publishing:

End the Discount Double-Cross - The Authors Guild

In short, when books are routinely discounted, it's not just the price but also the author royalty % that is slashed. Additionally, the publisher makes sure the author takes a far bigger hit than the publisher:

Let’s do the math on a hypothetical book with a list price of $10: At a 55% discount to retailers, the publisher would receive $4.50 per copy, minus the author’s 15% royalty of $1.50. That leaves the publisher $3.00 before printing and other expenses. Increase that discount to 56%, and the publisher receives only $4.40 from the sale. But under some “deep discount” clauses, the author’s royalty would suddenly plummet to 15% of that $4.40—just 66 cents—thereby magically increasing the publisher’s take to $3.74. But what’s magic for the publisher is misery for the author, who takes a haircut of more than 55%. With a clause like this in effect, why would any rational publisher maintain a higher wholesale price when a lower one would deliver 25% more to its bottom line—entirely at the author’s expense?

Yet such royalty plunges seem almost pleasant compared to another type of deep discount clause, one that reduces not just the basis for the royalty (i.e., from list price to net proceeds), but also the royalty rate, often to 5% of publisher’s net, bringing the royalty far closer to nothing than to the original amount. We’ve seen these discount double-crosses applied for sales to book clubs and book fairs, for “special sales” in bulk outside the usual book trade, for large-print editions, for export editions. Let’s say the publisher sells our sample book in bulk for just $2.00. The discount double-crossed author would get one thin dime per copy, a royalty cut of an astounding 93%—even though the net to the publisher would decline by less than 33%.

 

[Stephen Palmer]

That's a quelle surprise from me...

 

[pambaddeley]

Came here to post something I've just found on twitter about this - Business Musings: Discount Abuse (Contracts/Dealbreakers)
http://kriswrites.com/2016/07/13/business-musings-discount-abuse-contractsdealbreakers/
Some interesting stuff about how contracts used to be more reasonable years ago.

 

[Brian G Turner]

Some interesting stuff about how contracts used to be more reasonable years ago.

Yep, that's where I got the Author's Guild link from.

I've got a friend whose debut novel was recently published by a Big 6, and he says he only gets 20p per book sold. I guess now I know why.

The novel also wasn't stocked by Waterstones, so I presume most of his UK sales must come through Amazon.

Let's just say he's not particularly happy with the experience, and is considering self-publishing his next project.

 

[pambaddeley]

I'm not surprised!

 

[Brian G Turner]

So, if I can get this straight - if I were signed up by a traditional publisher I should expect:

- a sense of validation
- a basic edit and a cover
- to not be stocked in a book shop, unless I'm really lucky - and even then, only temporarily unless I become a bestseller
- to do the marketing myself

So, effectively, a copy edit and epublishing

For that service I should expect:

- to sign over all rights to my work for my lifetime + 70 years
- to let the publisher take the majority of the income
- to take a greater share of any financial hits than the publisher

It sounds like I'd be giving up pretty much everything just to have an ebook with a sense of validation.

Alternatively, hire people to do the copy editing and cover - and retain rights and royalties, and the ability to more efficiently market my own work. Which as someone who has run their own internet marketing company for the past 12 years...

 

[millymollymo]

Interesting stuff. Was having a conversation about this very (pricing) thing at Edge-Lit.
Though I will say that internet marketing and BOOK marketing on the internet aren't quite the same demon, though I suspect you probably know that

 

[Ragandar]

Wouldn't one of the advantages of a traditional publisher be that they can set you up to be part of panels and events, thus giving you exposure? Or does this have nothing to do with being signed with a publisher. Asking because I genuinely don't know.

Oh, and then there is the fact that their name would be connected to yours, which I would assume would lead to more people buying your book. After all, if a book is published by a major publishing house it 'should be really good'.

 

[millymollymo]

Wouldn't one of the advantages of a traditional publisher be that they can set you up to be part of panels and events, thus giving you exposure? Or does this have nothing to do with being signed with a publisher. Asking because I genuinely don't know.

Oh, and then there is the fact that their name would be connected to yours, which I would assume would lead to more people buying your book. After all, if a book is published by a major publishing house it 'should be really good'.

Maybe. Once. Not any longer. Being traditionally published doesn't open doors or ensure your book is on every Waterstones shelf. It doesn't guarantee you anything. The right agent can see that you get more publicity - panels, interviews etc. Not all agents are created equal, not all publishers own a mighty marketing department to themselves.
Getting a trad deal with one of the big six (five?) via their open door submissions isn't the be all and end all.
I know there are authors out there with big name publishers working just as hard as the indie and self published ones.

 

[ralphkern]

Sounds to me like you're going to come to the dark side.

Indie networks are maturing substantially... Even in the last 6 months or so there's been a seismic shift in them towards collective thinking and mutual support which has the potential to expand beyond even the big six.

Is it there yet? No. But if I had to bet, we'll see the first formal collectives (shared mailing lists / book store approaches / wider media penetration / dedicated editing for those collectives) start to emerge within a year.

It's the next logical step, and I think the seeds will be, or even have been, planted in the big name indie anthologies... Or perhaps forums.

The exact build will probably differ for each one, some will probably use publishing houses as models, others will be more informal.

That's my thoughts on it.

Would I take a big 6 deal now? Yes... But it'd be a pragmatic decision to increase my reach rather than for validation. But if I had to choose one or the other - a big 6 or a collective... I'd take the collective. And if I were just releasing, knowing what I know now, and had to choose towards which to direct my efforts? There would be no choice.

I get the impression from some of your recent posts your well researched, and highly respected, opinion on it has shifted the same way.

 

[Dan Jones]

This feels like a natural follow-on to what I came away from the London Book Fair with earlier this year (my debrief is still up here). There seems to be a real, tangible shift as authors realise they do not have to be at the mercy of the adamantium towers of the Big 6 any longer. I still have a very open mind about being part of a collective, where we all work to pull each other up - all ships rise in a high tide, as I mentioned somewhere else - and think that starting a small publishing business with a few like-minded and motivated peers would be a really exciting venture - one where the authors retain all the control and reap the rewards.

There are so many people with such varied skillsets and contact books out there that a reliance upon a Big 6 publisher for the startup writer is almost redundant*.

Writing needn't be a solitary pursuit; in fact, it's probably detrimental to treat it as one. I wouldn't have had the opportunities, successes and publications I've had if I didn't join here and be part of the community. Ditto others, I'm sure.

**That said, if I managed to make a success of myself / as part of a collective, I'd certainly consider moving to a Big 6, as the risks would be mitigated from their perspective. I also think that, at some point, one of the Big 6 will significantly change their business model so that these spiteful deep discount shaftings of authors are a thing of the past. You can squeeze the authors till the pips squeak, but at some point they will pack their bags and leave.

 

[E.Maree]

Wouldn't one of the advantages of a traditional publisher be that they can set you up to be part of panels and events, thus giving you exposure? Or does this have nothing to do with being signed with a publisher. Asking because I genuinely don't know.

Convention panels are unpaid volunteer work, so honestly, they'll usually take anyone who's willing and has a professional approach. Some cons reimburse ticket costs for panelists but this is getting rarer and rarer.

(Guests of Honour and 'celebrity'/super bestselling authors are generally the only paid ones at this point. If you're midlist you're out of luck.)

Oh, and then there is the fact that their name would be connected to yours, which I would assume would lead to more people buying your book. After all, if a book is published by a major publishing house it 'should be really good'.

The majority of readers don't notice or care what house a book is published under. It doesn't feel like it on SFFChrons because we're all pretty switched on and aware, but people who bother to check the imprint are actually the minority.

 

[Brian G Turner]

Wouldn't one of the advantages of a traditional publisher be that they can set you up to be part of panels and events, thus giving you exposure?

Oh, and then there is the fact that their name would be connected to yours, which I would assume would lead to more people buying your book.

There's a definite marketing advantages to being with a traditional publisher. Even without a marketing budget, they can increase awareness of new books just via their newsletters, websites, and social media accounts. I commonly see blog posts about up and coming books from readers, using this information. A basic level of promotion with trad publishers is therefore guaranteed, and the one thing most self-published authors sorely lack.

But at what cost?

Before I began sending out submissions I had it in my head that publishers were interested in looking out for authors, and protecting their interests. Heck, the people I've met in the industry have all been lovely. But, the more I read about the industry, the more I realised how naive my original presumptions about it were.

The truth about agents is that many are well-meaning but not really knowledgeable about writing or even the genres they claim to represent. The truth about editors is they are so poorly paid and overstretched they don't have the time to develop the talent under them. The truth about publishers is they are businesses making business decisions to maximise their own interests and profits, increasingly at the expense of authors.

Sounds to me like you're going to come to the dark side.

I dripped out a few submissions early in the year, then did a mass submission at the end of April. But at the beginning of May, I finally decided only one publishing option made business sense.

 

[Nick B]

The idea of collectives is very compelling, I would certainly consider it with a group of similarly minded authors. I imagine it would be similar to working with a small press in some regards.
As a writer who is literaly on the doorstep of publishing their first novel, I have to admit, it is nerve wracking to say the least. With a network of supportive peers, it would feel like less of a leap into the void.

 

[Overread]

To my mind the biggest weakness of self-publishing is quality.
A publisher assures a certain level of quality in the writing; the editing and the production. This is not always perfect and some style also comes into play; but in general a major publisher gives an assurance that what you buy is at least going to be of a certain level or higher in quality and that that quality will likely be maintained through the product.

Self publishing removes this aspect and I think the reading and writing world lacks any form of general review or authentication system built into it that is mass market reaching in terms of influence. We don't really have a "Steam" or "Metacritic" or "Rotten Tomatoes" style of reference and many of the big names in writing are by major publishing houses and thus their accolades are often most limited within those publishing groups.

Thus the buyer is left with a sea of self-published choices which lack the marketing to make things like Amazon reviews work for them (most get 5-20ish reviews and even 20 is doing well - sadly with so few one can't help but suspect its friends/family).


This is slowly changing; we are seeing a rise of sites like GoodReads (although that is now managed under Amazon) which promote social interaction and a form of community unification of readers without being a shop (even though its tied into them). In addition we are seeing "Good Reads Authors" as a thing. Thus I think there we are starting to see the rise of something that could become key and powerful in the writing world.



Alongside that the stories of how little authors get from traditional publishers and how little they seem to be promoted and supported lends one to the thought that those big names might well fall to the side if they can't get a handle on the market soon. Otherwise I can see a rise in a new publisher kind - a totally e-book publisher or even just a rise in things like "Good Reads authors" type affairs. With bookstores under insane pressure on the highstreets and with most major super-stores (eg tesco) only stocking an insignificantly tiny selection of books in their out-of-town retail outlets it could well be that the traditional publisher could fall apart if they can't adapt to meet the rise of the self-published author.

Then again like a moth to a flame getting something like Penguin on your books spine is a big thing and a target for many an author. Indeed it might well play well to the publishers position to let self-publishing do all the work for them an to simply dangle their icon before the newer authors once they become bigger sellers. Sure they know that the authors will take a total profit per sale hit; but they'll dangle that increased sale potential and life-long dream of being "truly published" and many will likely leap in.

 

[HareBrain]

I'm about to sign a contract with a small publisher. I did think long and hard about self-publishing, which would have given me greater control and higher royalties per book (though almost inevitably on fewer sales), but several factors swung it for me. I would be more wary about signing with a big six firm, unless I was absolutely convinced they were really going to push the marketing.

I also thought about the co-operative idea a few years ago, with a small-press-like website, cross-promotion etc. In theory it could work really well, as long as you don't get conflict between the members. What if one member thinks the quality of someone else's work is pulling down, rather than enhancing, the co-op's reputation, or that someone isn't pulling their weight with promotion and so on? The only way I could see to avoid that would be to have a formal management structure, in which case you might as well be a small press, though perhaps one in which the members hold shares.

 

[Jo Zebedee]

To my mind the biggest weakness of self-publishing is quality.
A publisher assures a certain level of quality in the writing; the editing and the production. This is not always perfect and some style also comes into play; but in general a major publisher gives an assurance that what you buy is at least going to be of a certain level or higher in quality and that that quality will likely be maintained through the product.

I think this is becoming an increasingly old fashioned attitude. Most self publishers who do well take it very, very seriously. I use the same editorial approach to my self published stuff (often with the same editors!) as I do published, and this is increasingly the norm. The days of the market being sympathetic to lack of quality is shifting. The reader is now your quality control and is likely to become increasingly so.

Thus the buyer is left with a sea of self-published choices which lack the marketing to make things like Amazon reviews work for them (most get 5-20ish reviews and even 20 is doing well - sadly with so few one can't help but suspect its friends/family).

Good luck to anyone getting 20 reviews out of friends and family - most of an author's friends and family don't know the value of a review. I have something like 80 reviews now across the Amazons and a couple of titles, with Inish Carraig having the most in the UK (29). I can say, hand on heart, up to about 10 were predominantly people I know - since then, all but about 2 have been from strangers. If somone's sitting on 20 good reviews, I'd look at that book, for sure.

Then again like a moth to a flame getting something like Penguin on your books spine is a big thing and a target for many an author. Indeed it might well play well to the publishers position to let self-publishing do all the work for them an to simply dangle their icon before the newer authors once they become bigger sellers. Sure they know that the authors will take a total profit per sale hit; but they'll dangle that increased sale potential and life-long dream of being "truly published" and many will likely leap in.

And this is mostly what's happening - Hugh Howey, Andy Weir et al proved their popularity with the readers, and then they got the big publisher. What is really happening is that the mid-list authors are vanishing. They're (we're - I'd count myself as one at this point) not doing enough on Amazon to get their big promotions and not wanted in bookstores which are increasingly careful about their margins.

I'm about to sign a contract with a small publisher.

Yee-ha! that is all.


Oh, no, and- everyone! This book is awesome. Completly blow-away awesome.

 

[ratsy]

I like this 'collective' idea too. I am going to attempt to do some cross-promoting the Explorations authors, and other Woodbridge authors in my books with page ads in the back, and with author's new release blasts on the Explorations or Woodbridge pages. This was along the lines of Chrons authors working together to have 'ads' for other chrons authors in their books. I think this is a cool idea, and promote that one.

I have also seen a lot of book bundle success these days and that is something I am going to be looking at working on in 2017.

 

[Overread]

Jo - the thing is for every author who will take the self publishing path seriously and who will hire a good editor and assure a high quality product there will be many many more who won't. Or who won't at first.

If you remove quality control and try to put it in the hands of the customers you get a mess; Steam Green-Light is a prime example. In that case Valve (who run Steam - which is basically the biggest retail outlet online for PC games) decided to allow users to vote for games to be added to their service; the developer/publisher puts the game up for voting and then harvests votes which then turn into activation for listing. Thing is they removed their own quality control system and left it to the gamers to choose - and its mostly if not totally failed. Bad quality products get through all the time; stolen content slips through more than it should; failed products that don't even work make it through etc....

If a market has no gate-keepers beyond the public the quality of the product, viewed en-mass, generally reduces.

OF course this also means its a lot easier for quality works to gain market entry to, so its not all downsides; but the problem then becomes one of noise. Those quality products are now competing with a lot more marketing noise and whilst they've gained distribution to the market they've likely got a harder job to actually advertise and get their head up within the market.



Gatekeepers are important; like or dislike them they do work.
With the idea of groups of writers working together and with any other marketing approach the key is exposure - that is getting your content noticed by a majority. At present I feel GoodReads probably has the best impact; but even that has a tiny impact when you consider that its not a "household name". It's on the rise but its not there yet. Even some older magazines which publish short stories and which are well respected and can hold up many top authors names to their list of authors are hardly known outside of niche interest circles (although if you ask about them here on Chrons many will likely know them - because this is a niche community in itself).

 

[Ragandar]

There's a definite marketing advantages to being with a traditional publisher. Even without a marketing budget, they can increase awareness of new books just via their newsletters, websites, and social media accounts. I commonly see blog posts about up and coming books from readers, using this information. A basic level of promotion with trad publishers is therefore guaranteed, and the one thing most self-published authors sorely lack.

But at what cost?

Before I began sending out submissions I had it in my head that publishers were interested in looking out for authors, and protecting their interests. Heck, the people I've met in the industry have all been lovely. But, the more I read about the industry, the more I realised how naive my original presumptions about it were.

The truth about agents is that many are well-meaning but not really knowledgeable about writing or even the genres they claim to represent. The truth about editors is they are so poorly paid and overstretched they don't have the time to develop the talent under them. The truth about publishers is they are businesses making business decisions to maximise their own interests and profits, increasingly at the expense of authors.



I dripped out a few submissions early in the year, then did a mass submission at the end of April. But at the beginning of May, I finally decided only one publishing option made business sense.

I suppose it makes less of a difference to me, since I'm not actually aiming to make money off my work. I mean, it'd be nice, but I just want people to read my stuff, honestly. But I can understand why it's not as attractive as it used to be for the people who are trying to make a living by writing.


Also, the idea to advertise for one another is great. I actually went back and checked some of the books I own to see whether the big publishers did it. I couldn't really believe that they wouldn't be doing it, but it appears to be rather rare. There's the occasional list of other works by the same author, but I wouldn't really call that advertising. The only books that had anything resembling advertisements were Steven Erikson's Malazan books. They actually had little pictures of other books and a final page with an 'Out now:'-bit.

That's actually rather odd. It's perfectly normal for things like boardgames and videogames to include a booklet with other productions by the same publisher, if not similar productions by other people. I can't help but feel like publishers of books are missing out on essentially free advertisement space here.