Friday, December 19, 2014

Translating John Sargent

Often times it seems as if those who work in the legacy publishing world are so out of touch with authors that a translator is needed to explain the true meaning of what has been said.

Such is the case with John Sargent, CEO of Macmillan, in his recent public letter.

Sargent in crazy bold italics, the translation in common-sense normal font.

Dear Authors, Illustrators, and Agents,
There has been a lot of change in the e-book publishing world of late, so I thought it a good idea to update you on what is going on at Macmillan. 

Translation: It will be easier to accept the bad news if I warn you first.

The largest single change happens today, December 18th. Today a portion of our agreement with the Department of Justice (called a consent decree) expires, and we will no longer be required to allow retailers to discount e-books.

Translation: Remember when we illegally colluded with other publishers to price-fix? We did that because we were worried that low-priced ebooks would harm our paper distribution oligopoly.

It doesn't matter that we have a much higher profit margin on ebooks. It doesn't matter that since forcing the agency model on Amazon, our authors made less money. What matters is that we foresaw a day where ebook sales surpassed paper sales, and we knew that would put us out of business because savvy authors wouldn't need our value-added publishing services anymore.

Happily, Amazon won't be able to discount our ebooks anymore, so we can charge high prices and protect the interests of our business and of the cartel at the expense of your financial situation.

Unless you're one of the huge bestsellers we publish. Those huge bestsellers sell a shit-ton of paper books. Under this model, they'll continue to get richer.
Unfortunately, the court in the Apple case made matters more complex. In a judgment against Apple, the court determined that publishers would be required to allow Apple unlimited discounting, and for a period that extends beyond the court approved consent decrees. Different time periods were assigned to different publishers. This will ensure a muddled and inefficient market until October 5, 2017 when Macmillan’s term (the last publisher) expires. 

Translation: Unfortunately Apple, the company we colluded with, can still discount us. Whoops. So we don't have total control over the industry like we want, even if total control hurts the sales of your titles.

Simon & Schuster and Macmillan have appealed the court’s decision to extend these dates. This appeal still awaits resolution.

Translation: Money that could have been given to you in the form of higher ebook royalties has been given to lawyers. But the lawyers will hopefully help us ensure that your ebook sales remain low. So why should a low royalty even matter to you? It's not as if your ebooks are priced to sell in the first place.
Late last week Macmillan reached an agreement with Amazon on a multiyear deal for print books as well as a multiyear deal on the agency model for e-books, starting on January 5, 2015. All our other retailers will also be on the agency model, leaving Apple as the only retailer who is allowed unlimited discounting. 

Translation: We're taking a similar deal to what S&S and Hachette took. We want Amazon to discount print books, because they essentially are subsidizing our continued existence. That shouldn't matter to most of you, because paper distribution is slowly dwindling except for major bestsellers. What should matter to you--ebooks--won't be discounted. This is our longterm strategy to stay relevant.

Irony prospers in the digital age.

Translation: We kinda screwed ourselves.
This odd aberration in the market will cause us to occasionally change the digital list price of your books in what may seem to be random fashion. I ask for your forbearance. We will be attempting to create even pricing as best we can.

Translation: We are attempting to create even pricing with ebooks. With paper, we want Amazon to discount them as much as possible. We're okay with Amazon undercutting the competition on the price of paper books. That's a monopoly we want them to have, even if it hurts B&N and indie bookstores. But with ebooks, because we have no distribution oligopoly and are technically not needed by authors, we insist on controlling prices.
Under our deal with Amazon your net percentage of the proceeds will not change. You will be affected, as you always have been, by our changes in price. Your books will continue to be featured in Amazon promotions and deals.

Translation: We're warning you that you're going to earn less. If we thought you'd be earning more, we wouldn't be asking for your forbearance.
In reaching agreement with Amazon, we have not addressed one of the big problems in the digital marketplace. Through great innovation and prodigious amounts of risk and hard work, Amazon holds a 64% market share of Macmillan’s e-book business. As publishers, authors, illustrators, and agents, we need broader channels to reach our readers.

Translation: Rather than properly exploit that 64% market share by pricing ebooks appropriately, which is what customers want, we'd prefer Amazon to have more competition so we can price books how we want to price them. Hardcovers command a luxury price, and for years readers had no choice, and those are the days we want to return to. Rather than adapt to the market, we want the market to adapt to us.
In our search for new routes to market, we have been considering alternative business models including the subscription model. Many of you know that we have long been opposed to subscription. We have always worried that it will erode the perceived value of your books. Though this significant long-term risk remains, we have decided to test subscription in the coming weeks. 

Translation: Be prepared to make even less money. And we're doing this even though we're concerned the perceived value of your books will drop, something often pointed to as the reason we've kept ebook prices high. So we're hypocrites. But it's okay, because we're trying to save ourselves.

Several companies offer “pay per read” plans that offer favorable economic terms. We plan to try subscription with backlist books, and mostly with titles that are not well represented at bricks and mortar retail stores. Our job has always been to provide you with the broadest possible distribution, and given the current financial and strategic incentives being offered, we believe the time is right to try this test.

Translation: If we can't get your paper books into stores (you remember paper books; that's the reason you signed a contract with us) we'll stick them in a subscription service. And you have no say so in this decision, because we own you.

Joe sez: If you self-publish, you maintain control over opting into subscription services. But the thing that blows my mind here is how nonsensical Macmillan's approach is. For years they wanted to control ebook pricing because they're justifiably concerned that low ebook prices will eat into paper profits. So rather than lower ebook prices across the board, they're going to allow readers to get them for a monthly subscription fee.

Whaaa? Doesn't this go against everything Macmillan has been fighting for?

Up to this point, they've at least been consistent in their stupidity. If this doesn't reek of throwing their authors under the bus, I don't know the definition of the term.  
I remain entirely optimistic about our prospects together as we go forward. 

Translation: Macmillan's prospects. Not the prospects of our writers.

Macmillan owns your rights, and we can do whatever the hell we want with them, and you have no say in it because you signed those rights away to us. Your rights are our sole assets.

We haven't exploited your rights like we should have, because we were looking at the long game. Ours, not yours.

Looks like the long game won't pan out. So we're changing strategies.

You'll undoubtedly suffer because of this. But you're used to suffering because of the poor decisions we've made.

Hey, at least we're warning you, right?

There is plenty of complexity to tackle, but with it will come great opportunity. 

Translation: Opportunity for Macmillan. Not for you. You're trapped, and can't do anything about it.

As always, please be in touch with any questions or concerns.

Joe's questions for John Sargent on behalf of Macmillan authors:

1. Can I opt out of this new subscription idea?

2. My books aren't available in print anymore, or the print sales are minuscule. Can you give me my rights back?

3. Why do you think low ebook prices are bad, but a subscription service is a great opportunity?

4. Couldn't you forsake this subscription idea, and just lower my ebook prices?

5. After the price-fixing suit and the millions of dollars in lawyer fees and damages, why do you still have a job?

6. I'm unclear: are you only pursuing this subscription model with Amazon's competitors? Or are you going to also enroll my ebooks in Kindle Unlimited? If so, doesn't that negate everything you've done previously? If not, and you put my ebooks into Scribd or Oyster or wherever, will my ebooks still be sold on Amazon? Or will you pull them from Amazon?

7. I'm vehemently against this subscription plan. Will you give me my rights back?

8. Are you going to publicly share the royalty percentages, and the author share, of these subscription deals when they go live? Or will I have to wait for me next royalty statement, six months from now, and then try to figure out the gobbledygook myself?

9. Can you explain how both the agency model and the subscription model are good for me, and can co-exist?

10. You said that this is for books that "are not well represented at bricks and mortar retail stores". Does that mean no Macmillan bestsellers will be in this subscription program? The rich authors don't have to deal with this, but I do?

11. I still sell some paper books, but not a lot. Won't bookstores be mad if they're selling my paper book, but readers can get that same book for free via subscription service?

12. Are you planning to let my paper books go out of print so you can put them into this subscription service?

13. Can you clearly explain why it is okay that Amazon discounts my paper books, but not okay if they discount my ebooks?

14. You said there is a long-term risk that this will devalue my titles, but you're testing it anyway. Are you going to compensate me in any way to be your guinea pig? A bonus? Higher royalties? Some sort of promotion that features my titles?

15. I didn't sign a contract with Macmillan for them to put my titles in a subscription service. What's my recourse?

16. In the same letter, how can you brag that Amazon is no longer allowed to discount Macmillan ebooks, and then state that readers will be able to get my books under a subscription model for an arguably much greater discount? Don't you see how much worse that is than discounting? Don't you see the hypocrisy?

17. A lot of self-pubbed authors are unhappy with Kindle Unlimited because they're earning less money. Now you want to force me into similar subscription programs. Do you see my income increasing because of this decision? Because the blogosphere is full of complaints that subscription services aren't author-friendly, and I'm very concerned.

I encourage Macmillan authors to take Sargent up on his offer to contact him with questions. As far as I can tell, he didn't actually give authors any way to get in touch with him in the letter he posted, but I'm sure all Macmillan authors already have his email address. He emailed you this letter, right? I mean, if he didn't, then this looks less like true concern for authors, and more like a publicity stunt to head off a shit storm. Post in public that the bug is actually a feature, before the unwashed masses start to whine.

If I missed any questions for John, put them in the comments and I'll add them to this list.

58 comments:

Ken Lindsey said...

You know, since I have no horse in this particular race, I'm actually very interested in seeing how this turns out. Especially with the crazy ups and downs I've been hearing about from self publishers who have been involved since Kindle Unlimited rolled out.

On paper, the subscription service idea seems shaky at best. In actuality, it looks more like a lottery for authors than anything else that's come out in the last few decades.

Plus, you can get that very same service (you know, the borrowing of digital books) for free from your local library.

I'm curious to see how the mid-listers handle it.

Kessie said...

Hmm, interesting. H.M. Ward was talking about how KU sliced her profits in half, and she yanked her books the heck out of there. I know that music artists complain about how little they make from subscription services--seems authors are about to go down the same merry path.

John Ellsworth said...

Excellent translation, Joe. Thanks for giving this your time.

Joe Konrath said...

It will be interesting to see if Macmillan authors try to do something about this.

Frighten the bestsellers, and they immediately band together and go on the media offensive, demanding change. The Authors Guild also trumpets loudly.

But midlist authors don't have much of a record of standing up for themselves.

Can someone point me to any Harlequin authors complaining about HQ's subscription deal with Scribd? Was there any sort of protest or petition or organized reaction to it?

If so, maybe those authors can align with Macmillan authors.

Anonymous said...

The KU universe is interesting. I'm starting to believe that there are now two distinct and largely non-overlapping groups of readers, those in KU and paying the $9.99 per month, and those not in KU and buying books at their stated price.

The question is, how often does a KU reader venture outside the KU universe of books to buy a book at full price? Except for bestselling authors, my guess is that this happens very little. That's why I said above, "largely non-overlapping."

My first reaction at the declining KU payout was to get out of it, which BTW I have done. Now I'm not so sure. I'm thinking that all I've done is cut out a separate group of readers. I really haven't seen my paid sales increase for books that I took out of KU.

So, maybe Macmillian sees things the same way. Maybe they see paid books and KU/subscription books as two distinct and largely non-overlapping groups of readers. Maybe that's why its going to experiment; although, not with the bestsellers, because as to them they can pull readers out of the KU group.

Just a theory.

RJJ

B. Rehder said...

They still have the rights to one of my books. It burns.

Anonymous said...

An alternative theory is that McM sees supporting Oyster as an easy way to try to kick Amazon in the nuts.

Rob Gregory Browne said...

So glad I got my rights back before they realized that the backlist is worth something...

Joe Konrath said...

An alternative theory is that McM sees supporting Oyster as an easy way to try to kick Amazon in the nuts.

That reminds me of that old Family Guy episode, where Peter asks Bill Gates if he can help program his Zune. Then Peter rescinds saying, "No, wait. I have an iPod, like everyone else."

Macmillan supporting Oyster and withdrawing titles from Amazon is going against what the majority of the world is doing. That isn't kicking Amazon in the nuts. That's throwing away potential money, and pretty stupid.

At this moment in time, competing with Amazon isn't wise. Look for markets Amazon doesn't care about.

Throwing support behind one of Amazon's competitors--when Amazon has the same program--is like starting a fire by burning piles of cash. Yeah, you get heat, but at what cost?

Joe Konrath said...

So glad I got my rights back before they realized that the backlist is worth something...

It only took seven years from them to figure that out.

Seven more before they realize this idea won't work? Or will Macmillan be but a memory in seven years?

And can someone answer how any author, other than a big bestseller, would ever sign with Macmillan knowing their books are going into a subscription plan?

It's a really poor long-term business strategy that alienates you from your future sources of income.

But the Big 5 still think that authors are a cheap, limitless commodity, like fossil fuels.

Smart Debut Author said...

Under our deal with Amazon your net percentage of the proceeds will not change.

Translated:

Dear MacMillan authors,

Just in case you were dumb enough to get excited during the Hachette negotiations when Amazon said: "We believe 35% should go to the author, 35% to the publisher and 30% to Amazon" then I want to reassure you that ain't happening, because... well... fuck you.

- John Sargent

See: http://www.amazon.com/forum/kindle?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdThread=Tx3J0JKSSUIRCMT

adan said...

Just commenting so I can get email updates on the comments. Well, I guess I could say quite an interesting array of author questions for Macmillan :-) Thanks!

w. adam mandelbaum esq. said...

Sargent's letter is an excellent example of short fiction. He should think about writing as a career.:-)

Dusk Peterson said...

I don't know which subscription services Macmillan has signed up for, how much money that the subscription services are passing on to Macmillan, and how much of that money Macmillan is passing on to its authors. If I were a Macmillan author, I'd be demanding to know all that, and I'd also be checking my contract to see whether Macmillan has the right to place my ebooks in a subscription service.

*However*, Scribd and Oyster authors whose ebooks are submitted through Smashwords or D2D (non-exclusively; their ebooks can still be sold at Amazon) receive exactly the same amount of money from an ebook being rented as they do from an ebook being sold elsewhere. It's a very different subscription model from KU's.

Since Mr. Sargent talks about this new plan as a way to expand beyond Amazon, I'm crossing my fingers that Macmillan authors will at least receive the same amount of money from rentals as they would from having their books sold. The fact that Mr. Sargent doesn't talk percentages in his letter is rather worrisome, though.

Louis Shalako said...

As an unknown author, I'm seeing what are (I hope) are the beginnings of a small trickle of sales from subscription services including Oyster and Scribd.

Everyone's circumstances are different. A few bucks might mean a lot to me, and be an insult to someone else.

Jill James said...

Just glad we moved on to a new topic. :)

antares said...

I laughed at Sargent's explanations. Of course, I have no contract with MacMillan. If I did, I would cry.

Noticeably absent is any mention of how MacMillan will split the subscription money with the author. I betcha they find a reading of the contract that lets them assign subscriptions a smaller slice than sales.

Anonymous said...

18. You told me my percentage of the net is unchanged as part of this deal. Amazon's press release indicates there are incentives to price the books lower. Does this mean if you price the ebooks too high my piece of the pie is smaller? What are the price points? Why don't you mention this important detail?

Broken Yogi said...

I think this is actually an attempt to create another layer of "windowing".

Publishers already have the following windows:

1. Hardcover
2. Paperback
3. eBook
4. Discounted version of each of the above

They want to release each of these publishing editions in succession, with decreasing prices, to try to snatch every last dollar out of the market in ever-widening circles. So the idea here is to add:

5. Subscription services

I've been noticing how "discounted versions" of ebooks are now finally lowering ebook prices - but only for ebooks that have already been out for a long enough time to sop up the easy money.

There's already signs of how #4 is now including discounted windowing of ebooks. Some major bestsellers, which were originally released as ebooks for high prices in the 11.95-14.95 range, are now being heavily discounted to the 3.95-5.95 range after sales at the higher prices have fallen off to very low levels. The idea seems to be to create specific time periods for each pricing level, and for each edition. I think they are still trying to figure this out.

So at the bottom of this barrel, perhaps at the same level as remaindered books, comes subscription services like scribd or perhaps even Amazon Unlimited. Publishers are trying to squeeze the most out of each book before it comes to this point, but at a certain point, they just don't care to bother with the book anymore. And by keeping it in one of these subscription services, they can truly claim that it's never going out of print. So they can retain rights to it forever.

And no, authors are not going to be able to opt out of it. How the book gets sold and marketed is completely up to the discretion of the publisher. Or they won't publish you. Which might be the best fate of all.

Mel Comley said...

I'm confused... it really doesn't take much in this ever evolving publishing market.

Why are you attacking the subscription option, Joe, when ALL of your books are in KU?

What am I missing here?

Sorry for asking such a dumb question, and no, I'm not blonde! I'm just trying to fathom out where you are going with this.

Inkstain said...

So rather than lower ebook prices across the board, they're going to allow readers to get them for a monthly subscription fee.
...(because, Joe, Scribd, will give them 70% of their listed price per read, not the KU lowball kitty payout per read. So subscription earns more per book for them than a lowered cover price.

I guess..

Joe Konrath said...

Joe, when ALL of your books are in KU?

I've taken them all out after this period, to compare numbers.

Alan Spade said...

My first reaction when I read that Apple was allowed unlimited discounting of publishers' ebooks was that it was great news for Amazon: they will align their prices on Apple's discounting each time, but this time, Amazon won't be forced to pay full-price to the publishers, just the Apple's discounted price (I hope what I say here is clear).

Kindle Unlimited has just arrived in France, and I have written a blog post: for me, it's a good thing, but not so much a good thing for self-published authors.

For publishers, it could be a good thing, because we have to remember that Amazon's term regarding KU are vastly different toward traditional publishers than toward indie published authors: in short, trad pub will make more money with KU than indie authors.

If I were a small, middle or big publisher, I would use KU carefully with some titles.

For readers, KU is a good thing, because great books become much cheaper.

For the books in general, KU is, in my opinion, a good thing, because as authors, we all have to compete against Netflix, TV, movies, videogames.

So, we have to fight for the free time of the people, and IT IS a tough fight.

Anon said: "The KU universe is interesting. I'm starting to believe that there are now two distinct and largely non-overlapping groups of readers, those in KU and paying the $9.99 per month, and those not in KU and buying books at their stated price."

My intuition is the same as yours.

But there's a caveat: if your ebook is priced higher than what you earn with KU, you are most certainly losing money. You have to remember that by signing for KU, you are making your novel exclusive to Amazon, and losing money on the other platforms.

Kindle Unlimited can only earns us money with short stories, in my opinion.

My opinion is based upon Author Earnings' data, and upon this post from K. Matthew books: http://kmatthewbooks.com/my-thoughts-about-kindle-unlimited/

SJArnott said...

Dusk Peterson said: "I'd also be checking my contract to see whether Macmillan has the right to place my ebooks in a subscription service."

This was my first thought. Surely an author's contract with a publisher gives the latter the right to 'sell' books, not to sell an opportunity to read them. This seems to be a significant deviation from the terms of most traditional contracts.

Is there some 'catch-all' clause in Macmillan contracts that would cover this?

Ann Voss Peterson said...

The reasons I personally haven't said much about Harlequin's exclusive deal with Scribd are:

1. I'm fairly certain my contracts allow them to do this.

2. I have older contracts and have not signed any of the amendments, so my reversion terms are based on last use dates. As far as I can see, this deal has no influence on that. Those with newer contracts/amended contracts might want to find out what this means for them (I don't know).

3. Harlequin hasn't put much effort into selling backlist ebooks as of yet, so this might make more money than I'm making now.

4. If readers can try my backlist risk free, maybe some of them will seek out my post-Harlequin thrillers.

5. I won't see numbers (provided they break those numbers out on the royalty statements) until next year. It's hard to know how this will shake out until then.

Terrence OBrien said...

My understanding is that Scribd pays 70% of the list price when a book is borrowed. Is that correct?

If it is correct, what's the problem?

Ebook Bargains UK said...

"My understanding is that Scribd pays 70% of the list price when a book is borrowed. Is that correct?"

It is indeed. So does Oyster. What's more, they pay that rate ragardless of whether the publisher is indie or trad.

Unlike Kindle Unlimited which also pays top whack for trad pub, but stiffs indies with a payout they won't know until after the event but that on past track record will be lower month on month.

The whole post reeked of hypocrisy knowing Konrath has all hit tiles in Kindle Unlimited. Since the post went live Joe has added in comments that he's pulling his titles from KU.

All due credit for that, but why has it taken so long? If subscription services devalue books, you knew that from day one of KU's launch.

You also knew from day one that KU was shafting indie authors with lower payouts than trad pub authors, and with lower payouts and unfair conditions that rival subscription services like Oyster and Scribd do not impose on indie authors.

Why has it taken so long to say enough is enough?

And why did you not say in your main post that you were pulling your titles from KU? It would have given the sentiments a lot more credibility.

Ken Lindsey said...

I can't speak for Joe, Ebook Bargains, but it looked to me like he was taking MCM to task because they have come out and said that subscription services devalue books. Now, though, they are telling their authors that it's a risk they're willing to take (with the author's money rather than their own, which is why they won't be adding the big hitters) and that their writers should just trust that they're making the right decision.

I'm fairly certain Joe hasn't made a decision about how to feel about KU yet, which is why he's pulling his titles to get more info. But that's a guess.

adan said...

Ebook, gotta agree with Ken. I've followed Joe's threads and comments for many years, and I've never seen him deliberately duck a topic or admit a stance. But he's also, ironically? , very deliberate, and experiments and sees how things work.

And don't forget, he's always been a proponent of being clear, his observations are what's worked for him, and we each need to evaluate and decide what's best for us.

If he's pulling titles from KU to see how things work, then that's the thing he needs to do. I've gone in reverse, having been "wide" for awhile, and am experimenting in KU - for reasons I've blogged about and talked about that they're no secret.

All that said, I'll certainly be listening to what Joe has to say, now or later, as to how things worked out for "him" being in vs being out of Kindle Unlimited.

But it's good to Ebooks Bargains, having you around reminding us of pros and cons and apparent or possible things to be aware of. It certainly wouldn't do me any good not having your voice around, best wishes (smiles).

Joe Konrath said...

All due credit for that, but why has it taken so long? If subscription services devalue books, you knew that from day one of KU's launch.

I still don't know that. Some authors' sales have dropped. Others have risen. I need more data, so I opted out several weeks ago. But the period is three months, so they're still enrolled until January.

Here's what you missed; and KDP author CAN opt out. It's our choice.

McM doesn't seem to be offering a choice. That's bad. Really bad.

The reason most writers sign legacy deals, other than getting an advance, is legacy's ability to get paper books onto retail shelves.

This sounds as if McM is foresaking paper--the one part of the industry they controlled--and short-selling their authors.

If I was a McM author, I'd be worried, pissed off, and wondering why the hell my publisher did a complete about-face from the stance that made them collude and price-fix.

Walter Knight said...

KU may pay less, but if it adds sales a book becomes more visible, the key to Amazon marketing.

Walter Knight said...

KU is only effective for new or undiscovered authors. Authors who already have name recognition are hurt by the exclusivity restriction.

T. M. Hunter said...

I have to wonder if this is some sort of ploy to have a more concrete way to keep people's rights from reverting back to the author for going "out of print." Although technically, an e-book *never goes out of print* it could be said that if a book isn't selling any copies for a royalty period, you could argue that as proving a book is "out of print."

So, if you enlist a book into a subscription service, wouldn't it automatically be considered "in print" for as long as it was involved in the subscription service?

Silly me...I decided to start adding my titles into KU just as Joe gets out...sigh.

Nate said...

From eBook Bargains UK:

"All due credit for that, but why has it taken so long? If subscription services devalue books, you knew that from day one of KU's launch.

You also knew from day one that KU was shafting indie authors with lower payouts than trad pub authors, and with lower payouts and unfair conditions that rival subscription services like Oyster and Scribd do not impose on indie authors."

Your logic is faulty. Just because someone else is getting a better deal doesn't mean that you're getting shafted. It just means they got a better deal.

Also, trad authors don't get a better deal than indie authors; trad pubs do, and that's an important distinction. Trad authors get considerably less than the entire payment a trad pub gets for a KU loan, and it is simply nonsense for you to suggest that they get the entire payment.

- Nate
editor, The Digital Reader
www.the-digital-reader.com

Nathaniel Hoffelder said...

Broken Yogi said:

"I think this is actually an attempt to create another layer of "windowing".

Publishers already have the following windows:

1. Hardcover
2. Paperback
3. eBook
4. Discounted version of each of the above"

Over the past year I've tried to buy a couple dozen ebooks that were between five and fifteen years old and balked because they cost $10 or more.

Do the major publishers actually discount backlist titles - in any format?

They'll remainder a print copy, yes, but do they discount it?

- Nate
editor, The Digital Reader
www.the-digital-reader.com

Alyx said...

I'd also ask-- what effect does this have on my eventual recapture of my rights? if my print books are "poorly performing", then can I have my rights back? Or are you going to put them into this subscription program and keep my rights forever then?

Walter Knight said...

Amazon's Kindle markets to the most prolific readers, providing an economical way to read lots of books. KU markets to the most prolific of the prolific readers (the best of the best of the best, to quote Men in Black).

Also, a lot of Amazon product (Kindle) buyers get holiday introductory free KU memberships. That's a number in the millions, a market not to be ignored in America and overseas.

Broken Yogi said...

Nate,

Do the major publishers actually discount backlist titles - in any format?

They'll remainder a print copy, yes, but do they discount it?


I've seen it happen with backlisted ebooks. And of course remainders. And yes, they do it with all print books also, often discounting just enough to screw the authors out of their usual royalty. But with print, even when they discount the book, since they don't sell print books directly it's usually up to the distributor or retailer to discount the book. So the discount the reader gets, if any, is out of their control. There's no agency pricing I'm aware of in print. But they do all sorts of deals with retailers, especially the big stores and amazon, that we don't get to see. And most author contracts take that into account when it comes to paying royalties.

So there's lots of options for publishers to do discounting.

Likewise, as I'm sure you're seeing, many publishers are discounting their ebooks once the initial sales rush falls away. And they seem to be experimenting with lower prices on backlist also, but it's far from uniform so far. They are finally starting to do the sorts of experiments that self-pubbers have been doing for years in regards to this sort of pricing variation at all levels, looking for the right windowing schedule and pricing scheme that will maximize their profits. These subscription services seem to be part of the experiment now, to grab the lost dollars out there in descending order.

D. U. Okonkwo said...

Hearing stuff like this from trad pubs continually makes me grateful that they never accepted my novel.

Mirtika said...

I wonder why, by now, authors don't demand a clause that says, "Any innovations in publishing that manifest in the future are excluded from this contract's scope. New book distribution methods, no matter if mechanical, electronic, quanta or any other means, are not included in the transfer of these rights. New negotiations must take place for each and every new publishing format, system, device, service."

Or however that would be in legalese. That would have covered subscription services and Google Reader books and books streaming on our forearms or shirt-sleeves or across the air in holograms, whatever comes in the brave new worlds of tomorrow.

Cuz, really, I still get pissed off that authors from decades ago got no say re ebooks. Those rights should have remained with them.

But authors should know now: Make sure you limit how they can sell, distribute your books. Keep your future rights ...now.

And thanks for the translation, Joe. As always, you're a heckuva an interpreter.

Robert Stanek said...

As an author whose books have been published Macmillan, Random House, Pearson, Simon & Schuster, Hachette & more, I found John Sargent's letter to be interested reading as well. My reaction wasn't the same as your's Joe, but it did make me think. Macmillan made a huge amount of money from my books, north of $50 million, give or take. I've written about some of my experiences here: http://readindies.blogspot.ca/2013/12/writing-as-a-career-robert-stanek.html.

Robert Stanek said...

Joe writes: It will be interesting to see if Macmillan authors try to do something about this. Frighten the bestsellers, and they immediately band together and go on the media offensive, demanding change. The Authors Guild also trumpets loudly. But midlist authors don't have much of a record of standing up for themselves.

As an author with millions of words locked up with Macmillan, I can tell you there's not a whole hell of lot authors can do. I negotiated my contracts as well as I could back in the day and worked in many things to make the contracts more fair and balanced, one thing nearly impossible to get was any sort of reversion of rights.

As far as midlist authors getting together, I'm sure they do, they just don't get heard or they get beaten down without much thought whatsoever. I'm sure you wouldn't be surprised what Macmillan considers to be its midlist authors. Even a guy like me who sold millions of books with them can't do much about rights. The work is simply gone and ocassionally I get a $2 or $5 check for a rights sale of 100% of the work. Yeah.

Alan Tucker said...

In order for subscription services to work — financially for the companies offering the subscriptions — is for people to use them like gym memberships.

The gyms all have huge surges in memberships in January and February, taking advantage of our holiday largess and New Year's Resolutions. People sign up and get value out of the membership for a few weeks, then most go back to their slovenly habits (I count myself in this bunch more than once in the past) and find excuses not to go work out, but still pay the monthly fee to the gym for many weeks and months after.

The subscription services are counting on the same type of behavior. The reader signs up and downloads a host of books immediately, then gradually forgets about maxing out their ereading device, while still forking out the monthly fee.

But will this truly happen with book subscriptions? If it turns out not to be the pattern, Oyster and Scribd will not be able to sustain their high royalty rates to authors. Even at KU royalty levels, a reader who reads and keeps their Kindle full each month costs Amazon money. Ten titles at $1.15 or whatever it ends up being north of $1 is more than the $9.99 monthly fee.

Unless the subscriptions start coming with contracts like satellite TV providers or gyms, I don't see the business models as being sustainable long term. The alternative is the dramatic lowering of royalty rates to the authors. We need look no further than the music industry to see how unhappy the artists there are with subscriptions.

I have half my titles in KU right now because I don't sell enough anywhere/everywhere to make a difference, but I can easily see a future where that won't be the case anymore.

Robert Stanek said...

Instead of "get a $2 or $5 check for a rights sale of 100% of the work." Meant to say reuse licensing of 100% of the work.

Terrence OBrien said...

The gyms all have huge surges in memberships in January and February, taking advantage of our holiday largess and New Year's Resolutions.

But book subscriptions don't involve abuse of spandex.

Anonymous said...

I hope there are author lawsuits, fighting the subscription service. I'd want my rights back before any publisher went down this depressing road.

Scott said...

[In order for subscription services to work — financially for the companies offering the subscriptions — is for people to use them like gym memberships.

The gyms all have huge surges in memberships in January and February, taking advantage of our holiday largess and New Year's Resolutions. People sign up and get value out of the membership for a few weeks, then most go back to their slovenly habits (I count myself in this bunch more than once in the past) and find excuses not to go work out, but still pay the monthly fee to the gym for many weeks and months after.

The subscription services are counting on the same type of behavior. The reader signs up and downloads a host of books immediately, then gradually forgets about maxing out their ereading device, while still forking out the monthly fee.]


Reminds me of a dental reimbursement concept (mostly dead now, deservedly) called "capitation", where individuals or businesses would buy access to "insurance" where I as the provider would get a fixed fee per month per individual or per family. In return I would do all of their dentistry. In theory, you'd get people to the point where they no longer needed extensive work and you simply collected a year's worth of fees for doing nothing more than exams and cleanings. In practice, as soon as people got their big work done, they'd drop the plan. The middle man didn't care; they got their cut whether people utilized the service or not. Here it's incentivized for less use. The middle man (KU, Oyster, Scribd) gets their fee and doesn't pay out if utilization is down. But in practice, I'd bet that people will drop it if they a.) aren't using it, or b.) don't feel like they're getting value out of it...

Nirmala said...

Back in July, Scribd's CEO said that the average user was reading just less than one book a month:
http://www.forbes.com/sites/ryanmac/2014/07/22/with-new-e-book-service-amazon-plays-waiting-game-with-publishers-competition/

Maybe the gym membership analogy is working for them.

Anonymous said...

Yep. That's why Taylor Swift yanked her music from Spotify.

Anonymous said...

@Nirmala...

That's an interesting statistic. Less than 1 book a month. If we assume (let's round up because math) that Kindle Unlimited subscribers are reading 1 book per month, then Amazon is paying out, what, about $1.30 to the author of whatever book that happened to be, and pocketing the rest of that subscriber's monthly fee as gross.

I'm sure delivery costs are miniscule to them on a per book basis so yeah, that's a tidy profit.

Anonymous said...

There are interesting results if you google Robert Stanek, just sayin...

Evan Ronan said...

Interesting page about Robert Stanek here:

http://conjugalfelicity.com/robert-stanek/

Anonymous said...

Hopefully Stanek is too lost up his own ass to find his way back here again.

Anonymous said...

"Amazon Offers All-You-Can-Eat Books. Authors Turn Up Noses," by David Streitfeld.
http://www.nytimes.com/2014/12/28/technology/amazon-offers-all-you-can-eat-books-authors-turn-up-noses.html?_r=0

Wonder what you make of this?

Lynn Johnston said...

Joe, thank you so much for breaking this letter down by what it means for us authors. It's great to cut through the doublespeak!

John Ellsworth said...

No contest, Joe.

Well done.

Anonymous said...

Macmillan is throwing a lot of stuff at the wall right now to see what sticks. Much of it's bad, but some of the stuff their Tor imprints have been doing look interesting.
Tor has been offering ebooks DRM free for a while now, which is one thing most of the Big Five wouldn't do. It's been doing well for them, and they've been doing it for a while.
Tor has also announced a new imprint,
http://www.tor.com/blogs/2014/05/announcing-torcom-the-imprint
that seems to fix some of the problems Konrath has with traditional publishing.
Royalties will be paid quarterly.
They claim their contracts will only "include rights that can be immediately used by the authors," which might mean that they don't force you to sell every possible right.
They also say that they'll give you higher royalties if you decide to do that instead of an advance. I don't know how high the royalties might be, but at least authors are given the choice.
The imprint will focus on digital releases.
There are some other interesting things in there, and it remains to see how well they'll do in treating authors, but it looks like something that's worth watching.
I'd be interested to hear what Konrath thinks.

The Earl Shilton said...

I have a question Joseph. If you can pass it on. Is it worth all the bother of writing? There are easier ways of making money. Lol!