Being treated like royalty

I had my first book come out in 1999. I'm on 13 now, with number 14 in press. You'd think by now I'd have learned, but I think it's defensive memory - like marathon runners managing to forget the exhaustion and the pain and remember the glory and sense of achievement. Or parents planning on a second child and managing to forget the birth part, the diapers, sleepless nights and tantrums of the first... Just because I have been re-reminded of it and its something you need to know as a new writer, let me talk a bit about the reality of how out of touch the writer is with actuality, of your only real tool to know how you're doing: royalty statements.

These arrive. Mostly. Well, that depends on your publisher. With Baen mine arrive. With others... maybe. I've yet to see a single royalty statement for my short fiction, and I have sold 25 stories. I don't expect them to make money -- but I'd finding knowing how (and where) they sold valuable. Anyway: If you get a royalty statement really have no way of knowing if they reflect truth or creative fiction. I know one author (at a different publisher ) whose e-sales are clearly creative fiction, because she knows more people who have bought it than she's been paid for. And very small the numbers of sales on more than one book are precisely the same on another - statistically improbable.. You can of course demand an accounting -- but you'll never sell another book, and if you're wrong and the flaw does not exceed $2000 IIRC, it will be expensive, as you pay for it. So it never happens. I blame Norman Spinrad for this sorry state of affairs - but that's a long story for another time. If it hadn't been for Spinrad's action, the industry would have been healthier financially, and far weaker than it is now. I would also probably not have been published. You can -- if you evade the obstacles the big publishing houses made Bookscan put in your way (ever wonder why?) get the Bookscan figures. These however are very much less complete than your publisher's records and don't include every sale (I believe they exclude Amazon, and Indies and many stores not in a few main centres). As they estimate too apparently, they can exceed the numbers on your royalty statement (if for example you sell OK in New York and other major cities, but barely sell a copy in the rest of the US.) Of course it is entirely possible that the dark suspicions in every author's mind are mere paranoia, like the conviction that e-piracy stole all your sales.

But dear future writer, the saga goes on. You see, royalty statements only cover a complete six month reporting period. - Jan-June, July-December. So if your book comes out 30 December, two days later you are at the start to a complete 6 months and in theory you should get your royalty statement in September (in practice December). However if your book comes out on 3 January... your complete 6 months only starts in July-December. So in theory you would get that statement in March. Only in practice the statement will be a further 2-3 months late. So in other words, if your book came out 3 January 2009... you might only hear how it has done, and get any income from it early July 2010.

There are good historical reasons for most of this, and this delay is the origin of advances which are the bane of every publishing house's existence. Advances -- seeing as the landlord and the power company and the grocer take a similarly dim view to authors to waiting 18 months to be paid, are what most of us end up living on. They are an advance on royalty income and are typically paid - for books sold on proposal half on signing, half on turn in, or for multiple book sales 1/3 on signing and 2/3 on turn in, or latterly 1/3 signing, 1/3 turn in, and 1/3 on publication. A good editor once told me they aim at 2/3 of what they think a book will earn, and a good agent told me he aims for as much as a book will earn.

Er. Do you see the flaw in this? As this is all pure thumb-suck as to how well a book -- especially on proposal -- will do, and getting it very wrong (even if the book does much better than expected) reflects badly on the editor - because that's his job - to estimate it right, the publisher's staff have a vested interest in seeing it is nearly right. They have various tools to do this -- firstly their instincts, secondly those very accurate Nielsen Bookscan figures, and thirdly their company's clout in marketing, and distribution and retail space. And next time they buy from the same author, they have the figures resulting from using these tools... So the only ‘real' factor is the editor's instinct. In some cases that is good - Campbell, Jim Baen for examples -- but let's be honest here - it's a big, complex world, and even the very best get it wrong sometimes. Still, that's how it works and this is why (besides wanting money or needing it to live on) authors and agents try for as high an advance as possible. Which, of course skews the system further and forces the publisher to carry considerable debt...

It would be to everyone's advantage if advances became history. Well, certain editors who enjoyed the power of bestowing them, and certain authors who enjoyed the ‘push' that a huge advance gave to a mediocre to poor book, wouldn't like it. But publishers, their shareholders, readers and most authors would benefit.

Only we STILL have the lag phase, between proposal and payment, and the very long gaps in any author's income, and the uncertainty -- so most authors would not be prepared to let a publisher have their books without an advance, because if they did, the publisher could simply use the saving to give more to Joe or Fred in terms of push. Quite frankly there isn't a lot of trust out there, a situation fostered by all the secrecy.

The answer obviously is to do away with the lag phase, and to make sure that authors knew they were getting an equal chance (or reasonable chance) to succeed. Now, as I said, there are good historical reasons for the lag -- some which still exist for paper. Firstly, keeping track of a physical inventory was not easy or quick. Basically a stock count was the only way to really be totally sure. And every six months was pretty reasonable for that. Of course computerisation has improved this vastly and there really is no reason why a publisher cannot know fairly precisely what they've shipped and what they've got back on a day-by-day basis. Some will tell you, some will tell you if asked, and some just won't. Secondly, retailers had a three-month payment window. The publisher needed at least 4-5 months to be sure he'd actually got the money out of them. Thirdly sheer physical distribution - by sea for eg, could add months onto the time for both sales AND returns. Fourthly the issue of returns and the complexity this added onto calculations of royalties. Finally, the authors were costing the publisher interest charges on the advance. It made sense therefore to sit on/use the cash for as long as possible.

Of course all of the above falls apart in an e-book environment. The publisher and the retailer know immediately how much they have sold (and there is no reason the author and readers shouldn't know too), there are no ‘in distribution' copies, no returns, and no reason (as you are not holding physical stock you have to pay for before sale) to delay payment. And if authors - particularly those with work ready to sell - got paid say... monthly (to save on transfer costs), there is no need for advances, and an electronic retailer has as much e-space for Joe Neverheardofim as for Fred Bigname, and both have the same number of copies (ie as many as any reader wants) on their shelf.

It's a very attractive proposition for authors (the idea of a predictable income - even if it's only predictable day to day by tracking it - paid reliably on a predictable day every month - when bills are monthly is almost intoxicatingly lovely, compared to now), and for publishers, as they escape advances _and_ get reliable sales figures on which authors really sell well (without the GIGO input of bookscan, distribution, marketing and retail space) - which should make them make more money.
Maybe it is less attractive for retail...

Can anyone see any holes in it?

Bargains

A good bargain of course is where both parties feel they got the best possible deal. If one or other side feels they're being screwed, well, to go back to Adam Smith, it is not in not in the enlightened self-interest of either party. Unfortunately, we dwell in stygian darkness... or so it would seem because it seems that those doing the screwing think it's a great idea and their skills in terms of either common sense or empathy are not very well honed. You see this, of course, in every class of humanity and in every sector of life, but there is a neat linear relationship between the disparity in relative power of the two parties and the inclination to screw the other party. If you live in a country where for example there is monopoly (or a cosy oligopoly as in South Africa) of banks, you can be fairly sure that the bank's little-man-in-the-street client is being screwed 16 ways to breakfast. All he'll ever get out of his bank is flat feet from standing in the queue, and he'll be lucky if they only charge him an extra 20% of the medical bills he gets as a result of their generosity. If competition between many little banks is real and vicious you can be sure that clients are getting a better deal. Of course power remains disproportionately with the bank, so getting a good bargain is unlikely. Anyhow, I'm here to talk about writing and books, not economic philosophy, so let's move on to that subject, with just one relevant addendum: a good bargain is actually to the long term benefit (and in the self-interest) of both parties.

So what got me onto this track? Well, the Wiley saga Amanda posted, and a little letter I got on Friday from the publisher that I sold the African print rights to a teens/YA sf novel I wrote. Contracts are of course something authors have to deal with. There is a sort of inverse square law here: simply - the closer to a good bargain it is, the shorter the document is. So for example the short story contracts I have had from Baen and Tekno are less than a page. They're good, fair contracts, sign them and both parties get a good bargain.

The next rule is: the more legalese the more certain you can be that this is no bargain. When the breakteeth lawyer words arrive, get the vaseline and bend over. The truth is a publishing contract is really quite simple (or at least potentially so). Intrinsically, it contains an agreement for the publisher to use the material for a specific purpose for a specific period, for which they will pay you xyz. You probably need to gaurantee that the material is yours to rent to them (this is what it this is: renting a property) and they probably need to provide some mutually agreed accounting mechanism (if the sum is likely to be large enough to warrant either party giving a damn - with a short it's usually money up front, and that's it. I've had one short pay me a royalty - out of 25. I suspect if I trawled through the rest I would come up with a few more dollars owing to me. Shrug.)

This can very easily fit in half a page of clear text: you have that, you have probably got a good bargain.

The other clear indicator is that the language in any covering letter is neutral. Do you believe and can you trust the that glib bloke on the Telly saying ‘The Best deal! Order now at the low, low price of $230 000 and get one FREE'? Well if you do, you deserve to fall for "Good news" or "I don't think it would be fair to keep you hanging on any longer" (to quote the little letter I got from the South African house I sold the African print rights to YA book I wrote to). Now in the case of the South African house I'm mildly amused because to be frank it's actually a win for me of sorts, because their own legalese and evasions have tripped them up. My hackles went up when I got the ‘let's be considerate and fair part' and I went and had a long look at the very dense legalese contract: They're legally obliged to publish and market the book at their expense ‘within a fair and reasonable time' -- there is no ‘kill'clause (and thus no punitive kill fee) - they baulked at that, so by stating that it isn't fair to keep me hanging on and I am free to look elsewhere, they've stated that they're in breach of contract. If I had money to waste or this was a first-and-only book, well, so long as I don't try and resell the book... I could take them to court and make them print and market it. What this boils down to is that the book was bought by a previous editor, has been handed down to one who doesn't know/like/believe in the value of speculative fiction (ergo she calls the story ‘fantasy'... it's science fiction) and if she can get me to huff off, the company is off the hook. Lesson: do not react in a hurry (or without a lot of thought and circumspection) to any contractual matter. If it sounds like normal business language, consider it carefully. If there is even a hint of ‘we're being nice to you'... back off and get professional advice. Your mum, partner, friends or kids are nice to you. You can be friendly with publishers, but it is a business relationship.

For your delectation I provide you with another snippet of the same letter
"In the light of this, I revisited your contract that was drawn up when [edited out] was in charge of this project. I see that the royalty agreed upon was 17½ %. We are not offering anything like this on current contracts and in the light of the recent recession, I am not sure that if we did publish it we would be able to sell enough copies of your book to make it viable."

Now, dear readers, 17.5% is of NET not of cover price. To run that through the calculators... that's probably somewhere around 8% (which yes, I had to argue them up to). That's about a standard paperback rate, and allows no escalation. There was a slim chance that the book would come out in paperback, so actual fact the net rate should be something like 25% to equal hardcover rates. In other words -- anywhere but in that very small exceptionally asymetric pond -- that's already a very good deal for the publisher.

It's also mildly amusing in that Ms Neweditor assumed the contract was the same as most would-be South African authors gets stiffed with and didn't bother to read the whole thing... or she'd have noticed something that would have given her conniptions. I went into this as an author published in the US with I think 15 contracts at that time. And when we got to a certain part of the negotiations they said ‘we don't' and I simply copied the relevant page of my most recent contract and sent it to them and said ‘with me you do and this is actually normal and how business is done.' Lesson: experience counts. Sometimes you have to get shafted getting it.

You see: According to a friend of mine who is professional illustrator and who knows just about every poor sap-author in this little arena... I am the only South African author she's ever heard of EVER getting an advance - and the advance they paid me - while small by US standards, means that actually the company is going to be substantially worse off not publishing, than publishing. Lesson: always try to get some form of advance (as big as possible), or something enormous in leiu which they stand to lose. It keeps them working on the book, and the more they've spent or risked, the more effort they'll put into getting at least that back. If you can't get an advance (and this may be be true in e-pub), get a clear, short timeline on publication and payment, preferably with a kill-fee. And the rates then go up, up a long, long way.

So long as they're in breach of their contract, I get to keep the advance. Actually, maybe Ms Neweditor may have been smarter than I thought. All she had to do was get me to breach contract and they could ask for it back. But I don't think so.

Now seriously, a book published in my old country would have been vaguely satisfying, especially while I was there. I could have sold quite a lot of copies (almost certainly enough just to my fans to pay the advance), aside from any effort they might have made. It was of course a neat subtle stab in the PC-back of South African political correctness, so it would have had a good social purpose too... On the other hand I've probably earned as much as I was ever likely to from the company. I'll be honest, I got a free coffee cup at their imprint launch and a month or so ago it came to light (the imprint launch BTW had maybe 40 or so staffers, and bunch of guests and the MD left in a brand new merc - someone makes money out of publishing in South Africa, just not the authors) and vaguely wondered if it would ever happen, but I never bothered to fuss about it. They might have made a good thing out of it if they'd tried, but forcing them probably isn't worth it. I've kept the E-rights, and rest of the world print rights bar Africa. I'm hoping to have it out as an e-book before Christmas (this has been on the cards for the last month or so, long before this). So: while I'll let it fester for a few more days I'll probably play the game right back... saying that it is terribly considerate but I'd need a letter revoking all their rights before I could even think about it. And then do nothing of the kind. Trying to resell the Africa print rights is near worthless. World rights are different matter. So are POD rights (which are mine).

Or what do you guys think?
How do you feel about ‘big 6' publishers working in what appears to be a ‘cosy'fashion?
What do you think a contract needs to say?
What are things we need to make a good bargain?
What do both both sides stand to gain?