A Compilation Of the Week’s Rabble Rousings on Contracts and Advances

For those of you who don’t want to go through the site to find every piece I’ve written in the last week about Random House/Hydra, bad book contracts and why a “no advance” business model is generally no good for writers, even from an eBook publisher, here they all are in one handy list. In order of their publication:

Note to SF/F Writers: Random House’s Hydra Imprint Has Appallingly Bad Contract Terms

A Contract From Alibi

Raptors at the Fences

Random House’s Letter Re: Hydra

SFWA Responds to Random House

Advances and Me

New Writers, eBook Publishers, and the Power to Negotiate

There, I think that gets us all caught up for now.

I do want to add one quick note, regarding eBook-only publishers (or “eBook first” publishers, which are more or less in the same boat). One might suppose, looking at the various pieces, that I have a thing against eBook-only publishers. That’s entirely not true. I have a thing against publishers who don’t pay advances, and unfortunately it appears a number of eBook-only publishers want to bake not having advances into their business model.

Show me the eBook-only publisher who pays actual advances (i.e., more than a token sum) for the work writers do, and otherwise treats writers fairly and equitably, and I’ll show you the eBook-only publisher I am just fine with.

26 Comments on “A Compilation Of the Week’s Rabble Rousings on Contracts and Advances”

  1. What confuses me about no advance from eBook pubs is that with respect to paper bound book publishing, they have a lot less to put out in terms of investment. There is no physical product and so actual cost is reduced. There are no returns like when bookstores don’t sell all the books they ordered and send them back to cut their costs. When someone buys an ebook it’s a done deal–as well as one made by the reader(as opposed to an order from a physical bookstore who then sells a copy to a customer), Thus, why an ebook publisher would feel justified with a no-advance business model is beyond me.

  2. One thing that I think is distorting the market is the eBook distributors, like Amazon, trying to call themselves publishers. If you don’t do any selecting, editing, or promotion of a book; in my opinion you are not a publisher.

  3. JamesBFranks:

    To be clear, Amazon does actually act as publishers in the manner you describe, with several imprints, including their audiobook arm Audible. I’ll note I’ve edited an anthology that was originally commissioned (and then promoted heavily by) Audible, so I can speak from experience there.

  4. I’m really glad both you personally and the SFWA as a body are speaking out so loudly about these kind of contracts and “business models.” My wife and I are currently under contract with and co-authoring a book for ECW Press, a small publishing house in Toronto. While ECW does not have the PR capabilities of larger houses, meaning that we as authors have to do some of the work in getting the word out (always keeping in mind the Don’t Annoy the Hell Out of People on Social Media Rule), ECW nonetheless paid us an advance which meets SFWA’s required rates (although the book isn’t fiction). So if a small, independent publisher can afford to do business along traditional lines where the authors are guaranteed at least some money for their work, then it seems to me that houses like Random House and it’s imprints should be able to as well. I’m new to this professional writing gig, but it turns out to be hard, time-consuming, real work. And whether it’s flipping burgers, digging ditches, or writing books, no one should work without getting paid.

  5. Do you think there will ever be a point where self-published authors, or something similar, were granted membership in SFWA? There are a lot of them out there nowadays, and while many are self-published because they can’t sell a novel, at least a few choose not to. What would the criteria be of an author joining who was (effectively or actually) self published? IE, an author that has a certain number of copies sold of a novel-length work? Required to be professionally edited?

    (Apologies if this has been discussed already, I’ve only read about half the discussions on this)

  6. I’m pretty certain that one could device a eBook only business model with a significant advance that would still be highly objectionable.


  7. As someone said in one of the other threads, many of these ebook only “publishers” are not really publishers in the traditional sense of the word and are instead just people offering very basic publishing services on contingency. The whole thing about being “publishers” is just to snare the vanity people and make people more comfortable about giving away 70% of their income in return for a few basic services. The only good thing about them is that many do allow you to get all your rights back after five years.

    They typically offer you a piece of cover art, basic copy-editing (typos and stuff), and social and email marketing (they will tweet your book a few times to other writers that follow the “publisher”). They are trading these services for 70% of your income. They also offer the vanity of being “published.”

    I think for the most part:

    1. The marketing they perform is trivial, inexpensive, and ineffective. If you want marketing, you have to do it yourself anyways.

    2. If you choose to self-publish instead, you can maybe cover much of the basic copy-editing yourself for free by workshopping the novel in writing groups as well has having beta-readers. I think you can get it to as satisfactory level without resorting to paying somebody, especially on your first few novels that are going to be revised a lot anyways.

    So in the end, by choosing an ebook-only “publisher,” the only out of pocket expense you are saving vs self-publishing is the cover art.

    If you look around you can find plenty of stock photos for $20-$50 that you can use directly or modify. You can go to places like deviantart and can maybe find or make deals for non-exclusive/medium resolution images for $50. (If you are ebook only, then you can always go back and change your cover art later if you decide you want something better.)

    So instead of spending maybe $50 to self-publish, you give away 70% of income. Even if you plan to only bring in $100 in five years, you still come out behind.

  8. gleonguerro: Probably because the other overhead is relatively easy to achieve, so lots of people try to give it a go as a startup business without, as John pointed out, capitalizing the business properly.

    I think a lot of people fall short in that it’s actually really hard to sell ebooks. The authors who have been successful self-e-publishers have spent a considerable amount of their time building a presence where potential readers might find them. This is often a long-term game, as their business builds over time (this is where third-party publishers will need capital, to support the business while this happens).

    I have the skill set to run a publishing business (I’ve been in the biz for nearly 2 decades. Editing, design, and production are things I can do in my sleep, and my Rolodex of high-quality freelancers is overflowing). I could probably even foot the bill for a couple grand to throw at authors. But while waiting for those books to start selling, I need to work my steady job so I can pay my mortgage, which eats into the time available for promoting authors and building a presence. I would end up on the “authors, please promote the hell out of yourselves” track, at which point why should they bother with my (theoretical) company instead of just self-publishing?

    I suppose they could be depending on my capital to pay for things they can’t afford themselves (designers, editors, etc), but this brings us back to “the company needs to be adequately capitalized.”

  9. –E, perhaps because many authors don’t have sufficient experience to figure out how to promote themselves, or how to connect with the right people. Heck, many don’t have a clue how to _price_ their books effectively. I suspect there is a niche for self publishing consulting groups that would agree to work for a percentage (inverse royalty?), just to give advice and to hook people up with the right other people. Admittedly the internet is pretty good at helping you find the right people for things, but having someone actually endorse someone else can be very helpful. SFWA/similar would also be possible venues for that sort of thing – just helping authors find other professionals (editors/artists/etc.) and helping figure out what’s needed.

  10. @jamesbfranks – exactly. Amazon’s a distributor, not a publisher.

    You’d think Amazon would actually want to stay away from the term “publisher”, actually, as it carries certain legal liabilities along with it (like if somebody publishes a Kindle original eBook which somebody claims is responsible for a crime, then Amazon as a Publisher could get sued).

  11. Amazon does indeed publish things, such as their imprint 47 North, which publishes the Mongoliad novels among other things.

  12. I think the most confounding aspect of the no advance business model has to do with the fact that Random House would do this. We’re talking about a book publisher of the first order in terms of catalog and impact on the industry. They’ve been in the book biz since 1927. They know what time it is. Greedy bastards is all I have to say, on that count.

  13. Joe @ 12:07: Yes, that is probably an aspect of the problem. Any idiot can fling their book at the internet. Any moderately smart person can hire a professional editor, designer, and production person, if needed (usually they are needed; I strongly disagree with M.A. at 11:52).

    But none of that matters if the people who might want to buy the book are unaware of its existence. This is the hard part of publishing, the part that, in print at least, is made a lot easier by having a company with institutional experience and connections to sell the book.

    In the self-pub ebook world, I have not investigated how it works. Obviously a good number of people are making it work, so it’s probably something a writer could research.

  14. I’ve been having conflicting thoughts about this, and I think I finally figured out why, and it boils down to: I applaud attempting to come up with new business models, but you should come up with one that isn’t based on hurting the author.

    (And I call it a “new business model” very loosely; this appears to be a literary equivalent of most record labels’ contracts. Which are just awful for most artists, even though they can tout a small percentage of successes.)

  15. The most recent Sword & Laser podcast has an interview with Michael Sullivan who has some very interesting and concrete advice for self-publishers (he’s done it himself for a six book series and is now signed with Orbit). One thing he throws out there is that getting layout and competent cover art done isn’t prohibitively expensive. No, the cover won’t be from a Hugo winner, but it will likely be better than doing it yourself.

    Here’s the link: http://swordandlaser.com/home/2013/3/5/sl-podcast-122-interview-with-michael-j-sullivan

  16. I’ve always thought of this simply…. If I can make more from self publishing then I might as well self publish. Pay the editor myself, get off my butt and do my own marketing, and really make a go out of it. Then I know how many have sold, how much I get, and don’t have to worry about being cheated as they nickle and dime getting their fees back.

    Plus… I OWN IT! Selling over every single right you have to one publisher who may or may not do anything with those rights and never having access to them again… That’s crazy!

    It would be interesting to see if Amazon gives better deals to those who publish under their imprints in the way of advances and royalties. I know they give great marketing. But considering they started out as a distribution network and are branching out I think they may have learned a few things about treating their writers well.

  17. I appreciate the explanations here. I have considered helping technically-challenged authors with e-publishing. Selection, editing, design, and marketing are all within reach; the discussion of advances is more clear than I’ve heard before.

  18. What confuses me about no advance from eBook pubs is that with respect to paper bound book publishing, they have a lot less to put out in terms of investment. There is no physical product and so actual cost is reduced. There are no returns like when bookstores don’t sell all the books they ordered and send them back to cut their costs. When someone buys an ebook it’s a done deal–as well as one made by the reader(as opposed to an order from a physical bookstore who then sells a copy to a customer), Thus, why an ebook publisher would feel justified with a no-advance business model is beyond me.

    Part of the reason is Accounting 101. Yes, a print book costs marginally more to produce than a digital one (though, surprisingly, not as much more as one might think, especially since the unit cost for a print book goes down in proportion to the number of copies being printed). But the reason the advance model worked for print publishing was simple: the “buyer” of the finished product was not the consumer, but the retailer. When the book was printed and shipped to stores, the publisher booked an immediate sale for the total number of books purchased by the retailer. The number actually sold to consumers and the time it took to sell them wasn’t relevant to the publisher’s bottom line. Yes, returns diminished that line item over time, but publishers’ accounting model also takes returns into account from the beginning–there is a line item for it and the publisher always assumed some percentage of the books would be returned (used to be around 40%, although I think publishers are increasingly expecting books to have much better sell-through than that).

    Now consider the ebook model. You create digital files (at least one in ePub and one in mobi format) and send the file to retailers. And then you wait. You can’t book a line item for a sale of even a single book until the retailer notifies you that actual consumers have purchased the book. This is a dramatically different accounting scheme, and it is much more difficult to control because now the length of time it takes to sell through the expected number of copies matters to the publisher. With print, if it took four months to sell 50,000 copies of a book to consumers, it didn’t matter; the publisher still “sold” those 50,000 copies to retailers and could put that on the balance sheet/income statement. With ebooks, the publisher now has to parcel out that same number of sales in four months over four months instead of all at once. And yes, this affects cash flow.

    In addition, print publishing has a long horizon between acquisition and publication; the timeline for digital books tends to be much shorter. A book acquired for the print market is often not released until a year or more after it is completed. Books acquired for the digital market are often published within six or fewer months. Print publishers usually only produce royalty statements and make payments to authors on a semi-annual basis; most digital publishers produce statements and pay their author monthly. So for the print model, the advance is what keeps the writer writing for the year or more it takes for the book to come out and the first royalty period to be completed. For authors with digital first or digital only books, the first payment generally comes the month after the book is released.

    Finally, when authors sign a contract with a reputable (and I stress reputable) epublishing house, they may not be paid an advance, but they are generally being paid a much greater royalty percentage than they would if they had received an advance. The “standard” royalty percentage for digital editions of major print publishers’ books is 25% of net (which works out to somewhere between 10%-17% of the cover/list price, depending on how net is calculated), while most epublishers pay a minimum of 35% of net and many pay more. Some pay much more.

    So the key here, IMO, is not that advances are the be-all and end-all of a good deal for the author. What is the be-all and end-all is to make sure you’re with the right publisher for your book and that the contract does not shift costs to you or contain predatory language that’s against your best interests. The contracts for these Random House digital imprints are pretty clearly predatory, but not solely because they don’t pay an advance. There are tons of other reasons they’re bad that are more important, IMO, than that.

  19. Charles Ponzi came up with a new business plan as well. Doesn’t mean we had to applaud him for being creative back in the 1920’s

  20. I started writing a response to this whole discussion but it ended up getting very long. So I turned it into a blog post. In, summary, I think Mr. Scalzi has to narrow a view on the issue of advances and its clouded his rational side.

    If you’re interested, you can find the whole response at this link..

  21. Leaving advances aside, the “keeping the rights to your book forever” should be enough to make one run away flailing like a Muppet, as OGH said earlier. Self-pub, vanity press, and even Bob In His Basement Office On Weekends don’t ask for that.

  22. ” I think Mr. Scalzi has to narrow a view on the issue of advances ”
    No need to “think” about this. John has been quite CLEAR on this issue.
    He wrote a book. He expects an advance to pay for the work which he has done.
    Getting paid for one’s labors is not a narrow view. It is a pragmatic view.

  23. I think John needs to sit down and talk with Samhain and Carina Press authors.

    In the romance-writing community, publishers like Carina Press, Samhain, etc. are fine, respectable places to submit. They’re not publishers of last resort, as someone on Twitter recently called them. They’re specific markets. If I had a 25,000 word sci-fi erotic romance that I didn’t want to self-pub, no advance/e-first publishers would be the FIRST places I would go to. The Ilona Andrews duo has stories with Samhain.

    The RWA had the advance/no advance discussion YEARS ago. At first, they said, “no advance, no PAN membership.” Much of the response to that was negative. Now they say:

    General PAN Membership: Any RWA General or Honorary member in good standing who has earned at least: (1) $1,000 in the form of an advance on a single Eligible Novel* or Eligible Novella** (“Option One”); or (2) $1,000 in the form of royalties or a combination of advance plus royalties on a single published Eligible Novel* or Eligible Novella** (“Option Two”); or (3) $5,000 in the form of earnings for a Self-Published novel or novella (“Option Three”) that meets the definition of Romance Fiction shall be eligible for membership in PAN.

    See, they even accept self-pub now. They’re way ahead of many of the author associations.