Hachette will be bringing in more regular, clearer and more detailed royalty statements for authors by the end of 2018, the company has said in a letter to its authors.
Writing his annual end of year letter to Hachette authors sent out yesterday evening (13th October), c.e.o Tim Hely Hutchinson said: "After consulting widely with agents, we have commissioned a new royalties system to produce much better, clearer and more detailed royalty statements.”
While no extra detail on what the new royalty statements will involve was given, The Bookseller understands the quality of detail in the statements will be better across the board, including on digital sales.
The news follows Hely Hutchinson’s interview with The Bookseller in April last year, in which he intimated that payments to authors would be made more frequently. “Actually, a fairly low proportion of contracts get royalty payments as the advances are often unearned, but I do think that more frequent (probably monthly) payments will come and we will invest in new royalty systems over the years to make that easier,” he said at the time. He also envisaged different types of contracts: one would be low advance, higher royalty, paying more often; another would be traditional high advance, lower royalty, paying less often. “I’d like to be able to offer those packages and within three years or so we will be able to—if there is demand” he added at the time.
Hely Hutchinson's letter also warned authors that times were "tough" for the book trade, despite recent publicity about an increase in print sales. He also expressed concern that controls on immigration shoud be given priority over free trade in the government's Brexit negotiations.
He warned authors that the "well-publicised" resurgence of print was "not the whole story," explaining that the sales had been skewed by the craze for adult colouring. The trade print market and publisher values had still fallen by 11.5% between 2011 and 2015, and by 27% for fiction, he said.
He further warned that the e-book market will have fallen by about 22% for Hachette by the end of this year from its peak in 2014. This he attributed to "the imposition of UK VAT at the full rate on e-books, changes in e-book trade terms and, to a smaller extent, self-publishing". This drop was also reflected in the company's results for the first half of 2016.
"For part of this time, growth in revenues from e-books made up for some of the shortfall, but that is no longer the case. So times are quite tough for trade publishers, even if they are sometimes mitigated by particular lovely successes," he wrote. "This is probably a long-term trend, as more of consumers’ time and money is spent on the many new or recent digital platforms for information and entertainment."
He reassured authors, however, that Hachette was well placed to maximise sales of every book through its "powerful network of overseas companies and agencies". The acquisition of Neon Play, acquired to "generate rapid growth on a variety of digital platforms", was also promised to provide opportunities for some authors.
"From a standing start in 2009, e-books peaked for us in 2014, at about 25% of our adult trade sales and 35% of our fiction sales. They will still amount to about 20% of our adult trade sales this year and I expect them to remain stable in the foreseeable future," he said.
Addressing the audiobook market, Hely Hutchinson predicted that audio sales would grow from 5% of adult trade sales to 10% "before too long".
On the subject of Brexit, Hely Hutchinson emphasised that the outcome of the referendum on Britain’s membership of the European Union was "not popular here".
"Our principles include being wide open to outside cultural influences, partly by means of employing a thoroughly diverse workforce," he said. "We do of course rely on trading freely with Europe and the world. In practice we hope and believe that many of those freedoms will endure, but we are concerned that some of them may not and, for the longer term, we are concerned that Britain’s economy will be damaged if controls on immigration are given priority over free trade."
Hely Hutchinson will address the acqusition of Neon Play and the future of apps in publishing at the FutureBook Conference in December.