Tag Archives: pricing-ebooks

Random House back-flip – a new beginning, or the beginning of the end for Indies?

My thanks to author Candy Korman for forwarding this email from RWA [Romance Writers of America]. Before I comment, please read the email yourselves. It’s in full.

‘Random House Adjusts Contract Terms for Digital Imprints

In response to discussions with writers groups regarding contract terms for their new digital imprints, Random House is adjusting proposed terms for authors with Hydra, Alibi, Loveswept, and Flirt.

According to Random House, prospective authors will be offered two models under which to publish: “profit share” or “advance plus royalty.” Click here to read Random House’s announcement.

As always, RWA cautions members to perform due diligence before assigning rights to any party.

Romance Writers of America’

The revised terms are as follows [again in full].


In response to recent constructive discussions with authors, agents and writers’ groups, including the Horror Writers Association, we are making adjustments to our proposed terms for authors with Random House’s new digital imprints, Hydra, Alibi, Loveswept, and Flirt. Prospective authors will have a choice of two models under which to publish: a profit share or an advance plus royalty.
Under the profit share model, there is no advance offered. Hydra, Alibi, Loveswept, or Flirt and the author will split profits 50-50 from the first copy sold. The term “profit” will be defined as net sales revenue minus deductions as follows: For print editions, deductions will include actual costs directly attributable to production and shipping of the book; for digital editions, Hydra, Alibi, Loveswept, or Flirt will cover the cost of production. For both print and digital editions, Hydra, Alibi, Loveswept, or Flirt will cover all marketing costs connected with general, category- or imprint-wide marketing programs. Hydra, Alibi, Loveswept, or Flirt will also cover costs of marketing activities undertaken specifically on behalf of the book up to $10,000. Title-specific marketing costs above $10,000 will be proposed in advance to the author. If the author agrees, the incremental costs of such title-specific marketing activities over $10,000 will be deducted from sales revenue before profits are split. Cash payments owed to authors will be made quarterly.

Under the advance plus royalty model, authors are offered a more traditional publishing arrangement, with Random House’s standard eBook royalty of 25 percent of net receipts. These authors will be paid an agreed-upon advance against royalties, and Hydra, Alibi, Loveswept, or Flirt will cover production, shipping, and marketing for all formats at 100 percent of cost.

Under either model:
Hydra, Alibi, Loveswept, and Flirt acquire rights to every book for the term of copyright, subject to an “out-of-print” clause, which provides for the author to request reversion of his or her rights three years after publication if the title fails to sell 300 copies in the 12 months immediately preceding the request.

Hydra, Alibi, Loveswept, and Flirt seek to acquire rights throughout the world and in all languages. This expands the author’s opportunities and earnings potential. Random House has publishing offices all over the world and has countless relationships with other foreign publishers. Earnings from subsidiary rights are split between the imprint and the author subject to the business model the author chooses. If we see opportunities with select manuscripts for performance or transformative digital editions (such as video games), we will seek to acquire additional rights, subject to negotiation with the author.

Each title will be given an individual marketing plan and be supported by the best-in-class services that Random House provides throughout the publishing process: from dedicated editorial, cover design, copy editing, and production expertise, to publicity, digital marketing and social media tools, trade sales, academic and library sales, piracy protection, negotiating and selling of subsidiary rights, as well as access to merchandising programs. Together, we deliver the best books to the widest possible readership, thus giving authors maximum earning potential.’

And last, but not least, a very diplomatic victory speech from John Scalzi, President of the SFWA and one of the most outspoken critics of the original Random House contracts :


My Comments

From my reading of the Random House response, and the lack of negative comments from those more knowledgeable than myself, I have to conclude that the new, improved contract models really are as fair as they seem.

But where will these new models leave those of us who are proud to be Indie? Will we rush to submit to these new Random House imprints? Will those who succeed become ‘legitimate’ authors in the eyes of readers? And will those who fail be tarred and feathered as crap writers?

Until today, there was a certain amount of cache attached to being an Indie. For starters, we answered only to the whims of readers, so we could write across genres, take risks, push the envelope of creativity. We were in control and could write what we wanted.

Then there was the issue of financial remuneration. Whatever sales Indies made were ours, and some of us at least, were making reasonable  money. We could say, quite truthfully, that when it came to ebooks, we were the smart ones.

Some of us bemoaned the lack of standards in Indie writing, and made half-hearted attempts to establish Seals of Quality, but none of them really took off. I think we missed the boat on that one because now the official Gatekeepers are back, and they will establish the Seals of Approval. As a result, I fear that today marks the beginning of the end of the Indie revolution.

Why? The answer to that goes back to the pattern established by the most successful of our Indie authors. As they became successful, they were offered contracts by established publishers. And they took them. Those contracts were far better, in most cases, than many new authors could claim, but they still brought those Indies into the traditional fold.

We all applauded Indie authors who succeeded, who were validated by contracts, because their validation was the Holy Grail we all sought. But now that validation will be open to far more authors, and it will be in the arena of ebooks. Our arena. The Indie niche.

As a reader, I have stumbled onto many brilliant Indie authors this last year, but they were hard to find in the sea of not-so-great Indie offerings. If these new developments result in those authors gaining the recognition they deserve, I will be very happy. I will be happy for them, but I will also be happy for myself because I will be able to find quality writing more easily.

But what if those brilliant Indie authors remain unknowns because they don’t fit into any convenient niches or categories? What if my standards for quality are not the standards by which these new imprints judge success or failure? And yes, you hear a very selfish, personal fear in my tone as I’m an Indie author too.

Back in the golden era of traditional publishing, publishers had a vocation, and that vocation was to discover new, innovative talent. Okay, perhaps that is just my romanticized version of how things used to be, but I know for a  fact that in the last twenty years or so, publishing stopped being about innovation and became a business run by accountants.

Has that changed? Are the new Random House imprints [and those that will follow from other publishing houses] going to be different in a qualitative sense? Will they take a chance on books that don’t fit some best-seller mold?

I don’t know the answer to any of those questions but I fear the worst, both as a writer and a reader. As a writer I fear my work will be dumped in the no-hopers basket, and as a reader I fear that the era of super cheap ebooks is ending as published ebooks rise in popularity, and cost.

My comments are very much gut reactions, and probably not as well thought out as they could be, so please tell me what you think. Is this the start of something great? Or is it a sad ending?



The pricing of ebooks

I’ve been hooked on ebooks since getting my first Kindle about six months ago. I love the convenience of carrying a whole library around in a device that weighs less than a novella. I love the fact that I can slip the Kindle into my very small shoulder bag and have something to read while I wait for a bus, stand in a queue or have a quick cup of coffee. I also love the fact that I can adjust the font size and read without my reading glasses [which I hate].

Yet convenience and portability alone would not be enough to keep me attached to my Kindle. The thing that really keeps me addicted is the price of the books that I can now read.

In my pre-Kindle days I would ration my reading to authors I knew because the price of books was so ridiculously high. $30 AUD for a book is a lot for someone who can devour two books a week. So I read far fewer books. And the big six traditional publishers are fairly and squarely to blame. Their greed has literally priced print books beyond the reach of all but the most die-hard readers. If they are in trouble now then they have only themselves to blame.

I have no deep, philosophical problem with the idea of profit but I do resent the kind of profit taking that goes hand in hand with price gouging. Not only is it greedy, price gouging is also rather stupid in the long term. Why kill the goose that lays the golden eggs? Or in this case both the goose and the goslings. Not only are millions of readers being ripped off but so are most authors.

In an environment where only the middlemen [the publishers and the retailers] reap the benefits something always has to give. Borders and Angus & Robertson have already foundered and the big six publishers will be next because demand is no longer matching supply. Readers are demanding access to books at a fair price and the ebook revolution is giving it to them.

Yet even now the big six publishers are trying to milk readers of their hard earned dollars by pricing ebooks at a ridiculous level. Why would any reader pay $20 for a brand new ebook when the paperback version can often be found at a cheaper price?

Think about it. The author gets the same tiny royalty whether their work is printed or digital but the publisher gets a whole lot more for a digital sale* than they would for the print sale because publishing an ebook costs next to nothing! No paper, no printing costs, no  storage costs, no transportation costs, no cost of returns when a title doesn’t sell.

Traditionally these are all the costs that publishers have cited for the high price of print books. Now they are saying that printing is just a tiny cost and that it is the ‘other’ costs that make ebooks expensive. ‘Other’ costs?  Such as? Well, apparently manuscripts have to be converted to a whole range of different e-formats and that’s expensive. Really?

Having talked to a lot of indie authors my reaction to ‘conversion costs’ is : BULLSHIT! Indies do conversions every day with far smaller budgets and yet they can afford to price their work at anything from 0.99c to the standard of $2.99! I’ll talk about quality later in this post.

Then the publishers cite the cost of marketing. Now to most readers this would sound like a fair cost because they do not know that only a tiny percentage of A-list authors get any marketing at all! These are the authors who are most likely to produce best sellers. Every other author must do their own marketing. If they can. Just like indie authors. There is one huge difference though. When an indie author makes a sale he or she keeps most of the profits. When a mid-list author makes a sale they still only receive a miserly royalty payment.

And now to the question of indie quality vs traditional quality. As a reader I can testify to reading some real stinkers from indie authors. Quite frankly there are a lot of snake-oil authors out there who dash something off in a month and slap it onto Amazon in the hope of getting rich from the gullibility of readers. There are also many dedicated authors who try their hardest but can’t afford a professional editor to massage their stories into shape. And then there are the wunderkind, indie authors who spend years writing their books, self-edit, get beta readers, self-edit again, scrimp and save to hire professional editors; all so that they can put their name to something good.

Yet these wonderful books are still priced at $2.99.

Since starting this blog and getting my Kindle I have discovered true gems amongst the indie offerings. These are books that old time publishers would have recognized as worth publishing. They are books that I would have bought even at a higher price because they are so damn good. Yet neither they, nor their authors are getting the recognition they deserve. Part of the reason for that is that these authors are not snake-oil salesmen. They do their marketing but they have integrity so they don’t ‘hard sell’. They don’t spam Twitter and Facebook and all the other social media sites with their advertising. They are genuine people who are dedicated to just one thing – writing.

So, the next time you’re looking for an ebook to read why not spend a little time and effort investigating the indie offerings. You can’t miss them. They’re the ones for $2.99 instead of  $20. Even if you buy six of them for a total cost of $17.94 and enjoy only one you  are still saving yourself $2.06. That’s almost the price of another book!

As a voracious reader on a budget I’m going to be spending 90% of my reading dollars on indie books. I’ll also be sticking pins into voodoo dolls named after the big six publishers. I really, really hate being ripped off!



* Apparently the big six publishers and Apple have been colluding in some price fixing by setting the price of ebooks themselves instead of allowing retailers to set the price. Given the legal controversy now raging over this price fixing I hope that things will change back to the wholesale model soon. At least the wholesale model had some relevance to supply and demand.

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