Mark Coker, the owner of Smashwords, does make a good point with his article on traditional publishers. Okay, him running the main source for independent authors is something of a bias, but I think his argument has merit: that trad publishers move too slowly and price too high for the marketplace, and this represents an obstacle for authors during their career when they’re faced with indies who can release their books on a much faster schedule at a more attractive price point.
This is a problem of the marketplace, of course. Today I’d like to look at some examples of how a traditional publisher can just harm an author’s career outright.
The big news from last week, apart from the Pearson acquisition of Author Solutions. Harlequin, the big romance publisher, made an agreement with authors to net them 50% of the net as royalties when they sold or licensed the books out to other companies. Not a bad deal, if you’re selling or licensing a book for $4 for a retail price of $8 – that means the author gets $2 and Harlequin gets $2. But Harlequin licensed the books to a Swiss subsidiary, that they wholly owned and controlled, for peanuts – meaning the author got 24 to 32 cents, Harlequin gets 24 to 32 cents, and the Swiss subsidiary sells it for a whole lot more profit that goes straight back to Harlequin.
They set up the system specifically to get out of paying authors the proper royalty rate. It looks very much like Harlequin screwed a lot of authors out of money – it may be legal, but it’s not right, and how many of those authors had to do without much-needed cash? I honestly don’t think it gets much worse than this from the majors.
A good friend of mine is of the opinion that if you sign a contract, you better know what you’re agreeing to, and there’s no point whining about it later. But a lot of the contract terms of major publishers are either unfair or simply outdated, and they are all about protecting the publisher at the expense of the author. What happens, then, when the publisher outright breaks the terms of a contract? It happened to Sebastian Marshall, a businessman who essentially gave Simon and Schuster the boot when they didn’t pay him on time, gave no consideration to his marketing ideas, and essentially treated him as a useless appendage to the whole process. His response was to throw everything out and self-publish, then dare them to come after him for it. Ballsy, but… where could his book have been now, if they had held up their end of the bargain? Where would his career have been?
Okay, libraries don’t come up all that often, but here’s an interesting fact: you can check out ebooks from libraries. Crazy, huh? It does make sense to be able to offer digital versions of the paper books – but that’s only if the libraries can afford it. It’s not like buying a single paper copy, remember. They have to license the book instead.
Guess what costs a truly crazy amount of money? Yeah.
Random House just put the price of each ebook licence by 300%. Most other publishers won’t even offer their full catalogue. Libraries are one good way for readers to try a book they’ve heard of at no cost – but an author with a mainstream publisher might as well forget about seeing their work there in digital form. The libraries simply can’t afford it, so marketing for them there. An indie, by comparison, could just offer their ebook for the libraries’ digital archive, or give them a few physical copies for free.
Look, you can say what you like, but I’m convinced that they colluded to keep ebook prices high. They had to, because ebooks were set to cannibalize the very profitable hardcover sales – and Amazon controlled those prices, and had been relentlessly pushing the $9.99 or lower price point. The Department of Justice wouldn’t have jumped in here against the majors unless they had some pretty big evidence to back it up, and by all accounts, they did. Three of them have already settled.
This was a pretty rotten move on their part. The publishers wanted to make sure that hardcover sales were protected, of course, but they did it at the expense of their authors. Authors need every sale, even if the price isn’t right, because they need the exposure (unless they’re a bestseller already, of course). That the majors did this says, in not so many words, that they’ll happily toss their authors under a bus and break the law if it means getting control of the market from Amazon.
The problem, really, is that a lot of this is simply bypassed by becoming an indie author. Indies have one problem: they need to get the word out about their books. Outside that, they are in control and they answer to no one but the services they deal through. If they torpedo their career, it’s by their own hand. The traditional publishers, however, seem hell-bent on making sure that no one can buy their authors’ work in ebook form for a reasonable price, and making it clear that their authors are entirely expendable in every way.
That’s no way to treat a business partner. I’ve said it before, but I’ll say it again now: there are dark times ahead for the majors if they keep this up.