Amazon gives authors a 70% royalty when they self-publish an ebook. On the other end of the spectrum, the standard ebook royalty set by most major publishers is 25%, one that the Authors Guild says massively screws authors.
But Harlequin is setting a new low.
Dear Author,
The landscape of digital publishing continues to evolve at a fast pace and Harlequin is at the forefront of this evolution. In 2007 Harlequin was the first publisher to simultaneously publish print and digital editions of our entire frontlist. Since then we have also digitized and brought to market our backlist and now have a current catalogue of over 11,000 ebooks!
The Harlequin brand has always offered an advantage other publishers don't have and this is especially true for ebooks. Our digital marketing efforts focus on building the Harlequin brand to drive the sales of your books through newsletter programs, advertising, search engine marketing, social media properties, the Harlequin website and leading ebook retailers. All this means better search and discoverability by online shoppers and an endorsement of the quality of the read, which is critical in the midst of the online clutter.
Harlequin has been closely monitoring developments in digital publishing, including author compensation. As you know, until now Harlequin's position has been that digital royalty rates as a percentage of cover price is a more transparent way to pay authors than as a percentage of net receipts: authors know exactly how many copies they sold at what price and their compensation is not affected by unspecified costs. Over the past several months we have worked to ensure a smooth transition from the current percentage of cover price calculation to a net receipts calculation while maintaining the same transparency. As such, Harlequin will be amending digital royalty rates.
Effective January 1, 2012, series authors who are actively writing for Harlequin will receive a digital royalty rate of 15% of net digital receipts for each digital unit sold in the English language, United States and Canada, frontlist and backlist. This will include books in Harlequin's digital backlist program, Harlequin Treasury.
Given that these are more favorable terms than those in your existing contract(s), this notification will be considered the amendment to those contract(s). If you wish to maintain the existing terms of the contract(s), please let us know by Friday, July 15th, 2011.
The letter’s not really intelligible; ‘The old way was better, but we’re doing it the new way because it’s better’ thing is a little tough to follow.
A lot of publishers aren’t exactly covering themselves with glory in the ebook space…
Sad thing is, Harlequin authors aren’t the only victims here. Harlequin’s huge backlist in all its imprints, when placed on the market will bury most newly released romances from other publishers. Especially when priced aggressively–which Harlequin has no reason not to do. They win in any case.
Not only 15%, but 15% of NET? Yikes.
I wish folks would stop confusing ‘royalties’ with ‘sales commissions’. Amazon takes between 30% and 70% sales commission in return for a sliver of space in a jam-packed virtual shop window to authors’ raw-copy. That is all they do. Publishers carefully select manuscripts and freely provide all-service facilities for authors from editorial, design cover and technical services to distribution and promotion and pay ‘royalties’. Sure there are holes in the system, but we must clearly distinguish between retailers and publishers and between sales commissions and royalties. Neil
Mr. Marr is correct. Amazon’s cut is simply a retailer’s margin rather than a royalty. The industry’s 25 percent royalty can be justified only for low-volume ebook sales, and should be graduated, as in print sales, in relation to volume. I believe 25 percent may be valid up to 10,000 ebook sales, but should rise to 35 percent and finally 50 percent as volume increases. Publishers do have significant initial costs but these decline rapidly when prorated across massive ebook sales.
Let ’em have it, Lee. There’s no way 15% can be justified with a straight face. Or, for that matter, 25%. Apart from formatting, it costs the publisher zero to throw it up on Amazon or any other ebook retailer. And the fact they’re releasing backlist titles they don’t even have the rights to is revolting.
Elsewhere I’ve read comment from the new superstars that the ebook “tsunami” is a myth and worthy releases will somehow swim without being sunk beneath it. Harlequin’s modus operandi makes the contention extremely doubtful. How many more tens of thousands of ebooks are they going to add to their 11,000? And how can reducing a 25% royalty to 15% of net cash proceeds be a step forward in the name of transparency? My own self-publishing sales experience, putting backlist Western titles on the Amazon Kindle, has been disappointing. I don’t believe adding any publisher’s services to the equation would produce results to justify the consequent huge reduction in author’s receipts. The Harlequin authors should think long and hard before passing up the chance to opt out of the one-sided amendment to their contracts.
Fighting royalty rape seems like an over emotional way to describe declining new contract terms. As for whether the new terms would be worse for Harlequin authors, it is impossible to know just from this letter because it doesn’t contain the old terms.
Fat, powerful, complacent companies of all sorts make fatal decisions. This one may be the beginning of the end for Harlequin. Its writers will abandon it in favor of publishers that offer far better terms, or in favor of self-publishing. Who needs it? I hope we can revisit this decision in a year and in two years. I am fairly confident we will discover a greatly enfeebled publisher whose golden years at the top of North American publishing are history.
We don’t need the figures for the old terms: 15% of net cash proceeds has to be less than 25% of cover price. As for the “over emotional” part, I guess Lee and others are talking about some poor devils’ livelihoods here.
Harlequin’s original terms, at least in contracts of the past 10 years or so, has been 6% of cover price for ebooks. That’s how they’re claiming that 15% of net is “better” but they’re doing it without (so far) defining “net.” Supposedly a followup letter is coming out that will do that. Most authors are taking a wait-and-see stance, especially since the majority of authors never received the FIRST letter (with its July 15 “opt out deadline”). I agree that Harlequin isn’t exactly covering itself with glory with this latest exploitation of its authors.
If an author has been with Harlequin any length of time–all their decisions is all about bottom line, not their authors. That probably can be said about every publisher out there. Where Harlequin differs, however, is in their contempt for their own authors. We have been told countless time that even if we schedule three books a year we should expect to make a living. Chilling words from your publisher’s mouth!
The PTB that make decisions like this see their authors as widgets. If some turn their back on the terms Harlequin will acquire more widgets. They have brainwashed themselves into believing that it’s the brand hat sells the book, not the author’s name on it. We’ve yet to convince them otherwise.
Their editors will soon see the results of this decision if enough authors walk away. They are the ones who will have to buy books that really aren’t ready; They will be working with less and less experienced writers. And Harlequin does know that it takes much more time and hands-on when you have fewer and fewer veteran authors. Hence it will be the editors who carry the consequences of this decision back to their superiors.
@ntmarr
Thanks for that! Very well put, and so accurate.
Yes, you do need to know the old terms. See the comment below by Brenda Hiatt to understand why.
I can understand that someone might get upset about a company offering worse terms, but likening rape to a contract offer that can simply be refused is a bit much.
Brenda Hiatt also makes the point that “net” has not been explained. For example, it will definitely include the large percentages of cover price to be paid to “etailers,” and I know of at least one publisher who sub-contracts formatting work to an out-of-house, for which they pay a 20% commission. The 15% of “net” could well be the same or less than the previous 6%. Everybody makes money except the writer. So you don’t like Lee’s rape analogy? Well, try this one instead. Given Harlequin’s hold on its market, refusing a contract offer from them could well be akin to professional death for a writer with a career in the romance genre.
Chap said: “Given Harlequin’s hold on its market, refusing a contract offer from them could well be akin to professional death for a writer with a career in the romance genre”
It might seem that way, but that’s the old print-publishing paradigm, I would argue. Which goes: They have the means of production and the writers don’t. You do what they say or they get another “widget” to bat out another “mass market plot.” Ha,ha.
But if a writer writes good, high-quality romances, stories that are real, authentic, nourishing for the reader’s soul, then if this writer epublishes on Amazon, this writer’s success will soar far beyond the “typical Harlequin romance drivel.” Quality is what sells, not brand, if the brand only delivers copies of copies of copies of real stories that were successful sometimes in the past.
Mass market fiction is what was on the shelves of Borders. Therefore, with prices going up all the time, the readers said to heck with this. But write a really real and visual and information-intensive story and have faith, it will sell.
Dan, I do hope time will prove you right. Sadly, research shows that it isn’t quality of work that’s producing the big ebook sellers but rather the quantity and quality of promotion. And even the most successful are usually happy to mention the mysterious “luck,” whatever form that might take. The writer can epublish on Amazon, as you correctly point out, but after that he or she is on their own. The Kindle Direct Publishing team send out a cheery “congratulations” message that says, “Thanks again for publishing your work on Kindle, and we wish you the best of luck in promoting and selling your work!” Then begins the long, long struggle to attract readers to your website. Most self-publishing writers know this, of course, which is why all the appropriate online forums are nearly as crowded with must-be-read titles as the Amazon Kindle store. Your book and its publicity, including great customer reviews, seem to have about as much chance of being discovered as the needle in the haystack, the grain of sand on the beach.
If I am reading you correctly, we agree that based on this letter there is no way to determine whether the new terms are better than the old terms because the new terms are vague and the old terms are not specified.
You seem to be implying that Harlequin might not renew contracts with authors who refuse this offer. Do you think that is true if the terms are better, or is that based on the presumption that the terms are worse?
Chap, you make the point that: “it isn’t quality of work that’s producing the big ebook sellers but rather the quantity and quality of promotion.” And yes, I agree that advertising and promotion has it’s place, but let me give an example of the “success-paradigm-on-Kindle” that I am seeing.
We all know Tori Spelling, daughter of Aaron Spelling. Not only wasn’t there a lot of good publicity about her, there was a huge amount of negative publicity and feeling, as I’m sure you know. Okay, then she wrote: “sTORIy telling.” This is a straight-from-the heart memoir and it is absolutely fabulous. It achieves what almost no mass market, print-published books achieve: a CATHARSIS for the reader (which is the final aim of fiction, I would argue). The book sold hundreds and hundreds of thousands of copies, overcoming all the negativity about the author. And on her twitter site, thousands and thousands tuned in, she published three more successful books, she now runs an online store for her fans. If Tori Spelling can achieve success writing, we all can! (if the book is good and delivers a catharsis).
But, okay, Tori had a platform. However, almost every successful writer starts out without one. Alistair McLean had none, then found instant success with his first book, as did John Buchan (“The 39 Steps”). Ian Fleming wrote four unsuccessful Bond novels before he upped the quality of his writing in “From Russia With Love,” and finally was successful.
So if a writer produces first-class fiction, sales will follow, success will follow. For one thing, reviewers in newspapers and magazines will promote the book as well as bloggers. It takes an act of faith to try and to trust, but quality of writing is what wins out in the end, as it should.
(Oh, amongst Harlequin writers, I found four who I thought were quite good: Anne Mather, Jean S. MacLeod, Janet Daily and Nora Roberts–it’s not all repetitive doodledum.)
I don’t want to carry this correspondence further. To Lee and most others commenting, it seems enough has been made clear without “presumption.” And if an offer of a contract is refused, you can take it from someone who has been in the business since the 1960s that it is not renewed.
You’re right, Dan. All self-publishing is an act of faith. So for that matter was/is submitting to a traditional publisher. I’ve been involved in writing and editing all my working life: books, magazines, and newspapers. I wouldn’t dream of publishing or offering any written material that was of inadequate quality for its purpose. But the judgment is always going to be subjective (biased you might say) in the final analysis. Moreover, if the material is never discovered by an audience, it’s difficult to see how any quality will win out in the end.
It’s easy enough to say that if Harlequin won’t offer decent contract terms, authors will just walk en masse. But history hasn’t borne that out, and I’m not confident that even the advent of new self-publishing options will change that. Many, if not most, Harlequin authors (those regularly publishing there) rely on that income to pay mortgages and feed their families. Remember that Harlequin, like other big publishers, pays advances. Not enormous ones, but in the $5K – $10K range per book. How many authors will REALLY walk away from guaranteed money (most make at least $20K/book within a year or two between advance and royalties, and most publish at least two books a year) to gamble on becoming a self-published success? I’m as upset about Harlequin’s policies (past and present) as anyone, but I’m also realistic. These authors need to eat and that consideration is going to come first.
Guess I get the last word then. I don’t know what you mean that “enough has been made clear without presumption”. The only thing that seems clear to me is that Harlequin wants to change the terms of their contracts. You seem to be saying that based on your knowledge of the business refusing their offer will lead to non-renewal whether the terms are favorable or unfavorable. Since you’ve bailed on our correspondence, I won’t be able to ask you when in your experience has a publisher not renewed a contract when an author has asked for less favorable terms.