News

Agents warn publishers over digital rates

Literary agent Sonia Land has warned book publishers they will lose control over authors’ digital backlists unless they improve their royalty offer.

Land this week announced her decision to publish 100 of Catherine Cookson’s novels as e-books through her company Peach Publishing, bypassing Cookson’s physical publishers Transworld. Other agents warned against the move, one calling it "tantamount to a declaration of war".

In a column in this week’s Bookseller, Land called on publishers to up their rates from 25% to 50% of net proceeds from e-books to secure digital rights.

Land said the publisher forced her hand by not showing an interest in Cookson’s digital rights. She said: "I’ve been thinking about this for a year and a half. They never approached me with a deal, but I think they knew I wanted a better offer."

Speaking about publishers in general, Land said: "The thing that really annoys me is that they won’t even negotiate a decent rate . . . They say ‘25% is perfectly reasonable’. They need to stop pretending it’s so expensive. I’ve just done it. I can do my sums."

Other agents, while sympathetic to Land’s arguments, were cautious about splitting from publishers. Referring to Land’s decision and the move by Andrew Wylie last year to publish e-books, Caroline Michel of PFD said: "These moves are made out of frustration with the business and royalty model on offer, not a desire to suddenly turn publisher."  Another leading agent backed publishers’ ability to market an author and said: "I firmly believe that authors and agents shouldn’t bite the hand that feeds you. I’m a great believer in there being one force in emphasising the brand of the author." He added: "I want to work totally with publishers but I think publishers should be at least open to an escalating royalty rate on e-books."

Land was also critical over publishers refusing to do print deals unless digital rights were included. "They have said that if we don’t agree to 25% they won’t even offer to publish, and some of our authors have to get published, so I’ve agreed, but we have authors such as Peter Ackroyd and Tom Sharpe, and we’ve just not agreed that they can proceed at that rate."

Land said other agents would look at their backlists, and highlighted Patrick O’Brian, which Sheil Land represents and which is published in the UK by HarperCollins.

However, Land said she would monitor Cookson sales before deciding whether to repeat the process: "I’m not going to do this for another estate, unless sales improve. I’ve got to see it work."

Meanwhile, publishers advised against splitting digital and print rights. A Transworld Publishers spokesman said: "We firmly believe that it is in the best interests of the book industry to keep physical and e-book rights together and that as publishers we are best placed to edit, market and sell our authors’ work to as wide an audience as possible. We have broad and ongoing talks with agents to explain the economics of e-book publishing and our confidential royalty rates are part of our strategy for the e-book market which is constantly evolving in what we believe to be the best interests of our authors and the industry as a whole. We are committed to sustaining a healthy physical books market while creating a viable e-book market and in collaboration with the agent community we continue our daily progress in the digital conversion of our backlist."

There was also concern about literary agents becoming publishers. Redhammer agent Peter Cox said: "I think that the idea that agents can save their skins by becoming publishers is a fallacy." Profile Books m.d. Andrew Franklin called agents publishing e-books "a transitional thing. It is a small pimple on a long horizon".

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Good for Sonia Land.

Agents will start publishing, because they can. Authors will start publishing, because they can.

We're long past the point where publishing was necessarily a specialist skill. Anyone can do it now and many will try, to a greater or lesser effect. If your agent tries harder than you to get your work out there, your agent is your publisher - and who cares what they call themselves?

As Mike Shatzkin has pointed out, if publishing as a stand-alone skill is to survive, it will need to move to more of a "service model" rather than the current 50/50 joint venture model.

If you think publishers already provide a service, take a look at a typical publishing contract. They all strike the same tone: "our money will bring your stuff to life, and so your stuff naturally belongs to us". You can say that's fair, given the risks involved, but you can't call that a "service". A deal, yes, but service no. A service is what you get in John Lewis.

Someone - and it won't matter whether it's a publisher, agent or author - will figure out what a true service mentality looks like when applied to publishing, and that will become the industry template. My bet is that it will be publishers who figure it out first, not agents and authors - but who knows?

Sonia is not in a position to "do this" for the Patrick O'Brian estate, as she is not its agent.

Punting out the dusty backlist of a long established author (to legions of eager OAP ebook readers, no doubt…) is one thing. Good luck to it. It can be done cheaply with one eyed closed. I suppose it makes a ‘point’ to publishers and gets some headlines like this one (which was no doubt part of the reason for the exercise). But it misses the point. The royalty argument is the default argument of dinosaurs. Good luck to them and their aging backlists.

Anonymous,

Not sure I get your point. Are you saying that authors wanting a fair slice of the pie (and their representatives aiming to get it for them) is somehow archaic? Not sure what I think on this digital rights issue but genuinely confused by what you're trying to say.

As someone who has published several books and also works within the publishing industry by day, I do know that authors are very far down the food chain and that it is not a healthy situation for writing (in whatever format) in the long term.

Unless, of course, great art can only truly emerge from deep financial impoverishment... in which case, we're right on track.

Sonia's comments are valid - we have always offered agents, publishers, and authors, a 50% revenue share with no production deductions, monthly sales reports, and monthly royalty payments. With as good a global digital sales coverage as major publishers, we have proved there are other viable alternatives. Why not come and speak to us at the London Book Fair 2011.

www.andrewsuk.com

It is a little naive. agent's won't publish for long when they realise the true cost of publishing themselves - digital does not lower cost in long run and big picture, if anything it adds cost - and agents will not have same reach, skills or more to the point sales ability. Publishers market the author's work... So, Agents and authors publishing their own ebooks will be very short lived. Sorry. Authors may ultimately will suffer if it continues with very rare exception, and it will be their agent responsible for their loss.

But if they work in partnership with someone like us, it costs them nothing at all to produce, sell and distribute. The only cost which they potentially have to fund would be marketing, and the question you then have to ask is how much marketing do most publishers do for eBooks other than for their best selling authors?

the answer is they do lots of marketing, and agents will incur cost anyway - it is all part of a whole... what about the book cover? what about events? If physical remains dominant format we also need joined up approach and sustained investment in marketing to keep sales as whole up. Digital Audio is separate since it is different market and medium. Ebooks though need to join with Pbook budgets and plans in most cases to make any sense. Industry will suffer from this type of in-fighting.

Something needs to give in the inflated E book pricing model. Publishers will be faced by market pressure to improve their prices and the Agency model will fail. Authors therefore will be squeezed and if anything the existing royalty rate will become under pressure in the medium to long term .The increase in self publishing and distribution by authors [maybe consolidated by Wholesaler websites] will expand dramatically for many "tail" titles, which of course make up the majority of published works. Agents maybe need to focus on such new routes for taking books to market , as a means of increasing author income , rather than just seeking unrealistic royalty terms from larger publishers?

I am glad to see agents like Land take this stand. To be honest, it is the right path to their own preservation too. Like it or not, e-books shine the light on a trust between author, agent and publisher that should have been broken ages ago.

The industry has changed enough for authors to go beyond creative control and into their financial well being, their role in the process no longer belittled, their rights to profit from their work no longer curtailed.

Personally, I find this to be the next great story and have enjoyed the new engine this war invented. When reality is so rich with drama, fiction doesn't have to stretch far to make for a good read.

www.koffeekoans.com

David Pederson

One important point being overlooked is that the traditional publishers are saying 25% OF NET PROCEEDS is "reasonable". For example, one reputable publisher is deducting, from a declared retail price of £10, 20% for tax (VAT), which takes us down to £8, 50% of that for the retailer, leaving £4, then 20% commission to go to an out-of-house agency "for their handling of the origination, sales to etailers, accounts, protection systems, etc." This leaves the publisher with £3.20 of which he pays the author 80 pence, or less than 10% of what the customer/reader paid for his download purchase.

As an author that is not my idea of "reasonable". Surely ebooks were meant to do away with many of the bugbears of the dysfunctional dead-tree book trade: the continually rising costs of paper and printing, of the books' shipping, storage and display – not to mention the margins demanded by those who take little risk while they operate on a sale-or-return basis.

With VAT, new middlemen, and publishers who want three times what the author receives for farming out their formatting and marketing work, I am in a state of paralysis about the seven of 25 genre novels for which I already own, or have repossessed, all rights.

Its interesting to read about these massive deductions you mention. Its the very thing which has been very popular with our authors and publishers, in that we DO give them 50% of all the income, and we DONT deduct anything from that income. So the conversion / sales work / cover art etc. we do, and those costs of come out of OUR 50% income cut, so they have no deductions from that net income. To keep taking away chunk after chunk of the income before the content owner see's any of it is not acceptable any more, and why people are swapping away from some publishers, and moving to work with people like us.

www.andrewsuk.com

Who in their right mind would give away so much equity for such little return. The only fools in this industry are authors, publishers are just predators who pick on the weak. I am an author who has no intention of getting a publisher to touch my book, why would I, they give me nothing and take everything in return. If they believe that everyone in the future is going to give away their internet rights they are surely deluded.

These are the mathematics: It costs me £1.60 to print a book, which I sell for £8.99. If I sell this directly from my website I make a profit per book of £7.39, sold though amazon, £4.04, from a publisher, £0.15p.

Ebooks are 100% pure profit - they cost nothing to sell. Here is my advice - do you own marketing, sell through your own website and amazon and forget the publishers, you don't need them.

Matthew Silverstone
www.blindedbyscience.co.uk

Great comment. I completely agree with you and also suspect that the change will ultimately come from the publishers. I just posted about this on my blog: we are living in fascinating times - the biggest change since Gutenberg!

Publishers who will first realize that their writers are the source of their earnings and will "treat them right" including and especially regarding e-rights, are those who will come ahead of the game. Because the industry is truly rocked by the digital revolution and only the "fittest" will survive - i.e. those who realize that writers are the foundation of their business!

I for one have always considered that the spirit of cooperation and collaboration for mutual benefit that existed between a traditional publisher and author was a good model. But now the business has changed from, as an example, one of forty or fifty fine publishers in New York to a handfuk of mass marketers. Each of those old smaller houses had its own flavour, its own editorial soul which could be seen and felt in each book that they published. There was variety, and even more importantly, there were both room for and enthusiasm for variety.

Now they have all been gobbled up by multinationals whose emphasis is on the bottom line and not on the craft of their authors or the quality of their house's image. Cashflow and uniformity... The great cookie cutter rules. They might as well be running a Wal-Mart for all the individuality that they allow in their offerings or for how much they actually care about the value inherent in their books' content. The old General Motors model. "You'll buy what we sell you because we say so!"

As a new author who is so far published only electronically, I am looking at the traditional choices that are available to me. I love real books, creations to be held and appreciated in my hands so I would prefer to see hard copies of my work in stores. I would welcome the chance to establish a relationship with a brick and mortar publisher, but the traditional industry becomes ever more ingrown and unwelcoming to anyone new. I suspect that even if I could finally make contact with one of the big houses, the current model is so impersonal that it is unlikely that I would ever be considered a person or that my work will ever be valued by them as anything more than a box of Cheerios to be stuffed on a store shelf. Not a good feeling!

The market is changing, No, it has changed already, and drastically. It is no longer necessary to have the capital investment in a city block square printing plant and warehousing to be a publisher. Unfortunately, the same can be said of large bookstore chains as well. Brick and mortar are costly anachronisms, but for small intellectual and boutique markets, now that information needs no physical form to be distributed, travelling electronically.

The only remaining purposes for publishers are to provide editorial services as needed, cover artwork, publicity and marketing services. These are not worth half or more of the cost of that which they market and especially electronically, since there is no distributor, sales force or even store owner at the end of the chain in need of a healthy markup to keep his doors open. Yet the trend seems to be that even with the profitable huge multinationals, they seem to be willing to do less and less for the hefty chunk of the writer's income which they claim.

I have no idea just who will eventually publish my work. Considering that I already have the software, the ability and the stock in trade to do it by myself, I am looking for connection, collaboration and service. I am not overly concerned whether the person who publishes my work has a huge headquarters in Manhattan or just an office full of computers in Podunk. But know this; I will know my publisher well, and face to face, and we will make an equitable deal that well serves both our needs.

Bravo to Sonia Land! She may well be the new business model of this century.

Good for Sonia Land.

Agents will start publishing, because they can. Authors will start publishing, because they can.

We're long past the point where publishing was necessarily a specialist skill. Anyone can do it now and many will try, to a greater or lesser effect. If your agent tries harder than you to get your work out there, your agent is your publisher - and who cares what they call themselves?

As Mike Shatzkin has pointed out, if publishing as a stand-alone skill is to survive, it will need to move to more of a "service model" rather than the current 50/50 joint venture model.

If you think publishers already provide a service, take a look at a typical publishing contract. They all strike the same tone: "our money will bring your stuff to life, and so your stuff naturally belongs to us". You can say that's fair, given the risks involved, but you can't call that a "service". A deal, yes, but service no. A service is what you get in John Lewis.

Someone - and it won't matter whether it's a publisher, agent or author - will figure out what a true service mentality looks like when applied to publishing, and that will become the industry template. My bet is that it will be publishers who figure it out first, not agents and authors - but who knows?

Great comment. I completely agree with you and also suspect that the change will ultimately come from the publishers. I just posted about this on my blog: we are living in fascinating times - the biggest change since Gutenberg!

Publishers who will first realize that their writers are the source of their earnings and will "treat them right" including and especially regarding e-rights, are those who will come ahead of the game. Because the industry is truly rocked by the digital revolution and only the "fittest" will survive - i.e. those who realize that writers are the foundation of their business!

I for one have always considered that the spirit of cooperation and collaboration for mutual benefit that existed between a traditional publisher and author was a good model. But now the business has changed from, as an example, one of forty or fifty fine publishers in New York to a handfuk of mass marketers. Each of those old smaller houses had its own flavour, its own editorial soul which could be seen and felt in each book that they published. There was variety, and even more importantly, there were both room for and enthusiasm for variety.

Now they have all been gobbled up by multinationals whose emphasis is on the bottom line and not on the craft of their authors or the quality of their house's image. Cashflow and uniformity... The great cookie cutter rules. They might as well be running a Wal-Mart for all the individuality that they allow in their offerings or for how much they actually care about the value inherent in their books' content. The old General Motors model. "You'll buy what we sell you because we say so!"

As a new author who is so far published only electronically, I am looking at the traditional choices that are available to me. I love real books, creations to be held and appreciated in my hands so I would prefer to see hard copies of my work in stores. I would welcome the chance to establish a relationship with a brick and mortar publisher, but the traditional industry becomes ever more ingrown and unwelcoming to anyone new. I suspect that even if I could finally make contact with one of the big houses, the current model is so impersonal that it is unlikely that I would ever be considered a person or that my work will ever be valued by them as anything more than a box of Cheerios to be stuffed on a store shelf. Not a good feeling!

The market is changing, No, it has changed already, and drastically. It is no longer necessary to have the capital investment in a city block square printing plant and warehousing to be a publisher. Unfortunately, the same can be said of large bookstore chains as well. Brick and mortar are costly anachronisms, but for small intellectual and boutique markets, now that information needs no physical form to be distributed, travelling electronically.

The only remaining purposes for publishers are to provide editorial services as needed, cover artwork, publicity and marketing services. These are not worth half or more of the cost of that which they market and especially electronically, since there is no distributor, sales force or even store owner at the end of the chain in need of a healthy markup to keep his doors open. Yet the trend seems to be that even with the profitable huge multinationals, they seem to be willing to do less and less for the hefty chunk of the writer's income which they claim.

I have no idea just who will eventually publish my work. Considering that I already have the software, the ability and the stock in trade to do it by myself, I am looking for connection, collaboration and service. I am not overly concerned whether the person who publishes my work has a huge headquarters in Manhattan or just an office full of computers in Podunk. But know this; I will know my publisher well, and face to face, and we will make an equitable deal that well serves both our needs.

Bravo to Sonia Land! She may well be the new business model of this century.

Sonia is not in a position to "do this" for the Patrick O'Brian estate, as she is not its agent.

Punting out the dusty backlist of a long established author (to legions of eager OAP ebook readers, no doubt…) is one thing. Good luck to it. It can be done cheaply with one eyed closed. I suppose it makes a ‘point’ to publishers and gets some headlines like this one (which was no doubt part of the reason for the exercise). But it misses the point. The royalty argument is the default argument of dinosaurs. Good luck to them and their aging backlists.

Anonymous,

Not sure I get your point. Are you saying that authors wanting a fair slice of the pie (and their representatives aiming to get it for them) is somehow archaic? Not sure what I think on this digital rights issue but genuinely confused by what you're trying to say.

As someone who has published several books and also works within the publishing industry by day, I do know that authors are very far down the food chain and that it is not a healthy situation for writing (in whatever format) in the long term.

Unless, of course, great art can only truly emerge from deep financial impoverishment... in which case, we're right on track.

Sonia's comments are valid - we have always offered agents, publishers, and authors, a 50% revenue share with no production deductions, monthly sales reports, and monthly royalty payments. With as good a global digital sales coverage as major publishers, we have proved there are other viable alternatives. Why not come and speak to us at the London Book Fair 2011.

www.andrewsuk.com

It is a little naive. agent's won't publish for long when they realise the true cost of publishing themselves - digital does not lower cost in long run and big picture, if anything it adds cost - and agents will not have same reach, skills or more to the point sales ability. Publishers market the author's work... So, Agents and authors publishing their own ebooks will be very short lived. Sorry. Authors may ultimately will suffer if it continues with very rare exception, and it will be their agent responsible for their loss.

But if they work in partnership with someone like us, it costs them nothing at all to produce, sell and distribute. The only cost which they potentially have to fund would be marketing, and the question you then have to ask is how much marketing do most publishers do for eBooks other than for their best selling authors?

the answer is they do lots of marketing, and agents will incur cost anyway - it is all part of a whole... what about the book cover? what about events? If physical remains dominant format we also need joined up approach and sustained investment in marketing to keep sales as whole up. Digital Audio is separate since it is different market and medium. Ebooks though need to join with Pbook budgets and plans in most cases to make any sense. Industry will suffer from this type of in-fighting.

Something needs to give in the inflated E book pricing model. Publishers will be faced by market pressure to improve their prices and the Agency model will fail. Authors therefore will be squeezed and if anything the existing royalty rate will become under pressure in the medium to long term .The increase in self publishing and distribution by authors [maybe consolidated by Wholesaler websites] will expand dramatically for many "tail" titles, which of course make up the majority of published works. Agents maybe need to focus on such new routes for taking books to market , as a means of increasing author income , rather than just seeking unrealistic royalty terms from larger publishers?

I am glad to see agents like Land take this stand. To be honest, it is the right path to their own preservation too. Like it or not, e-books shine the light on a trust between author, agent and publisher that should have been broken ages ago.

The industry has changed enough for authors to go beyond creative control and into their financial well being, their role in the process no longer belittled, their rights to profit from their work no longer curtailed.

Personally, I find this to be the next great story and have enjoyed the new engine this war invented. When reality is so rich with drama, fiction doesn't have to stretch far to make for a good read.

www.koffeekoans.com

David Pederson

One important point being overlooked is that the traditional publishers are saying 25% OF NET PROCEEDS is "reasonable". For example, one reputable publisher is deducting, from a declared retail price of £10, 20% for tax (VAT), which takes us down to £8, 50% of that for the retailer, leaving £4, then 20% commission to go to an out-of-house agency "for their handling of the origination, sales to etailers, accounts, protection systems, etc." This leaves the publisher with £3.20 of which he pays the author 80 pence, or less than 10% of what the customer/reader paid for his download purchase.

As an author that is not my idea of "reasonable". Surely ebooks were meant to do away with many of the bugbears of the dysfunctional dead-tree book trade: the continually rising costs of paper and printing, of the books' shipping, storage and display – not to mention the margins demanded by those who take little risk while they operate on a sale-or-return basis.

With VAT, new middlemen, and publishers who want three times what the author receives for farming out their formatting and marketing work, I am in a state of paralysis about the seven of 25 genre novels for which I already own, or have repossessed, all rights.

Its interesting to read about these massive deductions you mention. Its the very thing which has been very popular with our authors and publishers, in that we DO give them 50% of all the income, and we DONT deduct anything from that income. So the conversion / sales work / cover art etc. we do, and those costs of come out of OUR 50% income cut, so they have no deductions from that net income. To keep taking away chunk after chunk of the income before the content owner see's any of it is not acceptable any more, and why people are swapping away from some publishers, and moving to work with people like us.

www.andrewsuk.com

Who in their right mind would give away so much equity for such little return. The only fools in this industry are authors, publishers are just predators who pick on the weak. I am an author who has no intention of getting a publisher to touch my book, why would I, they give me nothing and take everything in return. If they believe that everyone in the future is going to give away their internet rights they are surely deluded.

These are the mathematics: It costs me £1.60 to print a book, which I sell for £8.99. If I sell this directly from my website I make a profit per book of £7.39, sold though amazon, £4.04, from a publisher, £0.15p.

Ebooks are 100% pure profit - they cost nothing to sell. Here is my advice - do you own marketing, sell through your own website and amazon and forget the publishers, you don't need them.

Matthew Silverstone
www.blindedbyscience.co.uk