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Harlequin Hystericals

Friday, November 20th, 2009

We are living in the world of The Onion. After opening the week announcing Harlequin Horizons, the pay-to-be-published venture, and getting called on it, the Big Romance Publisher shot itself in the other foot yesterday by responding to the RWA response by saying:

“we have heard the concerns that you, our authors, have expressed regarding the potential confusion between this venture and our traditional business.  As such, we are changing the name of the self-publishing company from Harlequin Horizons to a designation that will not refer to Harlequin in any way.  We will initiate this process immediately.  We hope this allays the fears many of you have communicated to us.”


Harlequin employs lots of literate people who understand things like character motivation and the credibility of prose. How then, did they write this stuff? The wording is clear and concise but understanding the context is lacking; it’s like publishing a romance novel with no romance. It addresses all the superficial text of the issue, without grasping the point: the business operated by this venture would not be an acceptable career for the hero of an Harlequin Romance. Changing the name for what you are doing is not going to make the activities acceptable. I’m sure any mystery author could spot the problem: rationalize everything during questioning but don’t let go of the game.

If this slackness in business catches on, we will shortly see announcements like these:

  • Miss America no longer pole-dancing under her title. While reigning as the symbol of purity she will be Miss America; while dancing, she will use the name Fifi La Boom-Boom.
  • Bernie Madoff’s Ponzi operations relaunched as The American Pretend Funds:  “We realized the public is unlikely to send money to Madoff With Your Money 2, but the Madoff business model is too good to let go so we changed the name. American Pretend Funds isn’t about being rich, its about imagining being rich. We help people pursue their dreams. We have to keep the dream alive.”

To quote that old saw, “you can put lipstick on a pig, but it’s still a pig.”

Thanks to novelist John Barnes for the Miss America line. Read about John’s new novel Tales of the Madman Underground here.

Read more about our agency at our page at Publishers Marketplace.

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Harlequin Horizons, a mug’s game

Thursday, November 19th, 2009

Remember how sad you felt when your neighbor’s son was arrested for dealing drugs out of his dorm room, or your cousin’s boss turned out to be running an investment scam? We typically think, “such a nice person who must have fallen into bad company…” We initially try to rationalize bad behavior. Then there’s Bernie Madoff who had everything and still chose to run the world’s biggest Ponzi scheme. Suddenly, financial desperation or a bad choice of friends is no cause or justification for criminal activities. Such a  choice to step over the line makes us even sadder. Sad for the victims and sad for the families of the victims and the families of the offenders. I feel the same way about Harlequin’s decision this week to launch Harlequin Horizons, a self-publishing business, for romance authors who elect to take the self-publishing route.

Several times a year, we agents get a come-on letter from swindlers who say: “Make money off those authors that you can’t represent. Include our self-publishing offer in your rejection letter and we will send you 15% of whatever they spend with us. We will even write the recommendation letter to include. You do no extra work and can pocket hundreds of dollars every month.” I, and many other agents, toss these letters in the trash or send them around to each other with snarky comments. I know no legitimate, actively selling agent who falls into collecting kick backs for promoting shady deals. We decline because we make money by selling worthy books to real publishers who pay advances and royalties to authors. We know that self-publishing is a mug’s game and the only winner is the fake-publisher. The definition of a mug’s game is “a futile or unprofitable endeavor.”

And this week, one of the best kids in town has stepped out of the spotlight and into the shadows. The funny guy in the Harlequin logo, whose parents own the best run fiction factory in the world, has turned down a dark, mean street. So sad.  What invoked this crazy scheme?  Car thieves make a lot of money, but most parents don’t want their kids to go into auto theft.  Just because writers will spend money to try to get published does not make it OK for commercial publishers to actively take their money. When I first saw the Harlequin Horizons website I thought it was an article in The Onion. Those wags just did a great fake news report on Ford’s New Car: the 1993 Taurus.

Who’s in this game? Author Solutions, no surprise there. According to their website, they hold the brands: AuthorHouse, iUniverse, Trafford, and Xlibris. Each began as a vanity or POD press to suck money from unsuspecting or unprepared authors by charging authors money to be published. Now these operations are merged. How Harlequin got sucked into this I can’t imagine. Harlequin comes from a good family and has a history of tough but honest dealings in the real publishing business. They don’t need this.

The offer is reprehensible: For between $600 and $1,600 you can pretend to be a published author. You won’t be, really published, because no commercial publisher liked your book well enough to bring it to market. They will just pretend to offer it for sale if you pay the costs. Harlequin’s follow up announcement today, blows even more smoke:

For the first time since figures have been kept, print-on-demand titles outpaced traditionally-published titles in 2008 according to Bowker. Self-published print-on-demand titles make up a large portion of this expanding sector. This is not traditional vanity press publishing; self-publishing is a large and vibrant part of the publishing industry today.

While the number of self-published titles may have exceeded the number of “real” book titles in 2008, the number of actual sales of all those titles to readers is virtually zero. Before they all got swept under the Author Solutions rug, Author House and Xlibris reps told me at a Book Expo that “actual sales of titles average fewer than 100 copies, all of which are bought by the author.” The self-publishing industry ranks as a “bestseller” any book that sells over 500 copies. Self-publishing is an expanding sector because those whose sole mission is to suck money have concluded that it is easier to get money from authors wanting to be published than from readers wanting to buy books. This does fulfill a certain twisted logic. Publishing a successful book requires editorial judgment, investment of resources, dealing with book-selling channels that increasingly demand a bigger share of the cash flow, and appealing to fickle readers. The self-publishing model is sooo much simpler. There’s only one customer, the author, and he or she buys all the books which are never manufactured until purchased. Of course this is a growing segment of publishing; the publisher gets money, takes no risk and retailers are not actively involved

So ask yourself: are you going to buy these books? Will your friends who read and who don’t currently buy enough commercially published books to keep profits up at commercial publishers suddenly start buying and reading books like this? For the same money, you can have a nice day at a spa, modest cruise, resort stay, or fabulous dinner with friends.

You can always invest in your own development as a writer or treat yourself to a reward.  I think most romance authors, published or not, have too much self respect to fall for this.

Update: Here’s a link to the RWA response.

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Posted in Business, Publishing, Technology | 43 Comments »

Opt out of Google Settlement by Sept 4

Wednesday, September 2nd, 2009

We are approaching the final deadline for authors to opt out of the Google Settlement. Our agency has advised our clients to opt out unless the author has a clear business and legal reason for opting in. If you haven’t already carefully determined that you need to opt in, the prudent course is to opt out. The Science Fiction Writers of America now recommends that members opt out and has a readable summary from the author’s perspective at their site.

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The Google Settlement

Thursday, April 23rd, 2009

You may or may not be aware of what is known as the Google Book Settlement.  In short, Google was sued by the Authors Guild and several publishers who alleged that Google’s digitizing of books constituted copyright infringement.  Google and the Plaintiffs reached a proposed Settlement Agreement.This involves you because the Settlement Agreement covers all books and inserts (see definitions of books and inserts in our Guide) that were published before January 5, 2009.We have prepared our own analysis of the proposed Google Settlement Agreement and invite everyone to read it in the accompanying Guide.Please pay attention to the timelines, as the deadline for an action you might want to take is May 5, 2009.

Introduction:  Grumpy Literary Agent’s comments on the Google Settlement

The more we have studied this, the worse the situation and the implications have become. In no case have further details or understanding shown the Google Settlement to be better than we first thought.This is not a minor sub-rights issue that may make you $60 or less on each of your books. It is a major manipulation of the marketplace that effectively diminishes your ability to earn money from your works in significant new markets. In time, these new markets may become the only markets, so this is serious.The circumstances that brought this lawsuit and settlement about are simply about the march of technical capability; neither the circumstances nor the technical issues are good or bad. Like nuclear power in 1947 the technology is neutral and can be used to make bombs or generate power.Unfortunately, however, the settlement agreement as proposed mandates a compromise between technology-enabled business and copyright holders that serves neither.The settlement does several things:

  • It skips around Google’s past copyright violations by establishing an agreement that their acts against some works in the past are made legal in the future and apply to everyone. It amounts to saying, “we know you stole the victim’s curtains but instead of prosecuting you for burglary we will accept your offer of $12.95 payment and declare ‘curtain harvesting’ a valid activity with a price set between $1.99 and $29.99, but there will be at least five years before the payment reaches the curtainholders.”
  • It offers as representative authors of the class, not one author of adult trade fiction, thereby violating the rules of class actions. This is a legal procedural objection that is being made about the Settlement, but we have other concerns. Basically, no novelist was represented in the class.  More information is available at Scrivner’s Error.
  • It establishes a single electronic rights clearing house, the Book Rights Registry (BRR), with an entitlement to a percentage of the electronic income of all works. This amounts to a mandated electronics rights agency that every author is required to pay, but no author can question.  It inserts itself between authors and their agents (and editors and the publisher’s sub-rights managers) and an entire new world of business and taxes all transactions from day one.
  • It establishes the Book Rights Registry as the author’s de-facto agent for a range of electronic rights in books currently out of print but still under contract and grants the publisher electronic rights to those books even though the contracts may not contain e-rights language. It deprives the author and agent of the opportunity to exploit those rights as they see fit through negotiation. It pays a share of 50%-35% of the author’s income to publishers who may be out of business or no longer functioning as publishers and the author will have the legal expense of recovering rights. (See page 12 of our Guide)
    • “Consumers will have the ability to purchase online access to many in-copyright books for online reading, highlighting, limited printing, and other potential features. These features will be available for all in-copyright, out-of-print books unless the rightsholder chooses to deactivate these features, as well as for in-copyright, in-print books if the rightsholder chooses to activate these features. The agreement allows for Google and the Book Rights Registry to expand upon this with future additional offerings such as Print-on-Demand, Consumer Subscription, and other uses and services.”  (From The Association of American Publishers Google FAQ.)
  • It forms the market model for the value and future value of the electronic rights in your books. The Book Rights Registry gets an entitlement to all works, and can’t be removed from their position so they have no motive to act. Contrast this to a regular literary agent whose job it is to fight for the client.
  • While it sets up one agency the authors can’t fire, it also allows any number of additional sellers of display and e-rights to start businesses with the virtual guarantee that they never have to pay an author more than Google did. So Microsoft, Apple, The Open Source Republic of Gimmiestan, Piranah.com, etc. can all start businesses of any type and draw on all authors’ works without any further negotiation. Publishing consultants are already promising a gold rush of new business based on “content” with no recognition of “authors” in the business model.

Grumpy old agent thinks no good can come from this.Yet authors are being rushed to a deadline to acquiesce and not pay attention to what is going on.  In the rest of the booklet we have prepared, you will see what you can do, when you need to decide and what the alternatives are.

Grumpy old agent suggests the following…

  1. Empower yourself by reading our booklet and anything else you can to best understand the issues.
  2. Immediately and relentlessly in the near future write your congress critters, the Register of Copyrights and the White House, as well as your local newspapers and TV news desks to make your point. This is not part of the requirement to act on the Settlement, but it is important to expose the nature of the settlement.
  3. Please pay attention to the deadlines in the Guide and perform the record keeping suggested
  4. Every author has individual needs, intent, and financial goals, but no author should act without information. IF you are an author who wishes to have a say in what big companies can do with your works, and who makes money from them, you should seriously consider Opting Out of the Settlement, or Opt In and Object. The latter takes a little more resolve and a willingness to argue a position but hey, that’s why you became a writer, right? Besides, speaking out gets you publicity as the author of “Whatever Title” you want to promote. How to choose the optimal position for yourself and how to act to establish that position is covered in the remainder of this booklet.

Risk and Reward

By doing nothing, you risk losing control of your works if they are out of print and the income they may produce.By Opting Out or Objecting you can pursue a better reward for yourself, your financial dependents and your (eventual) estate. There is no higher risk for Opting Out or Objecting; that is, you can’t end up worse off for having done it.Everything you have to consider and acts to perform to be heard and protect yourself involve reading, filling out some forms, and writing. Nothing an author can’t do exceedingly well. If you need to register some of your own copyrights, you may have to pay some filing fees, but these are one time costs that ensure future income potential. You can’t afford not to.Can I ask my agent to do this?  It is possible for an agent to file on behalf of a client author, but we feel it is important for you to be aware of your titles and their status and make choices about them, and you can do it for a few minutes’ work of going online.Can I expect my Publisher to act for me?  Based on personal interviews, we found no publisher who had a ready document that stated what their action would be for the works whose electronic rights they control. No editor we spoke with was aware that the settlement hands publishers up to 50% of the authors e-rights that they never contracted for. We assume publishers will Opt In, but there are problems.Our estimates are that less than ten percent (10%) of published works have proper electronic rights clauses that authorize publishers to act in this matter. The Google Settlement presumes that if a publisher asserts control of the rights, the deal is done. Individual contracts will likely prevail, but there’s no process to consider author contracts until the BRR is set up and operating. So you have to trust what an unknown organization will do in the future.While publishers have recently started sending out letters asking authors to “give” the electronic rights to them, we, as agents, think this is a bad idea.

Other stuff

Objecting:  In the Guide we say that if you wish to object to the Settlement that you should consult with your own attorney.  You may wish to contact any writers organizations of which you are a member (Mystery Writers, SFWA, etc.) to see if they are planning to take action as an organization to object to the settlement, and you could join in the group’s objection.

References you may want to read

A law professor writes about the Settlement

http://www.acslaw.org/files/Grimmelmann%20Issue%20Brief.pdf

 AGLA Guide to the Google Settlement  a downloadable PDF.

Posted in Business, Publishing, Technology | 8 Comments »

Authors are entitled

Wednesday, June 11th, 2008

I want to present a new way to think about author income. Everybody knows authors receive money as an “advance against royalties” and after the advance has earned out, from the royalties themselves. But little has been said or written about the financial model that underlies the author’s right to receive money. We need this clarifying view because authors’ income is now under attack from all sides and only by understanding the concept of an entitlement will authors and their agents be prepared to secure and preserve the author’s earnings.

There are lots of ways to acquire money: as wages for labor, as profit from a business, or as interest on a loan, to name three with which every author has some experience.

Money for labor

Many authors I meet want to sell their book so they can quit their day job and “become an author.” However, virtually no one who fantasizes about supporting themselves as an author recognizes how different their new business model will be. “Don’t quit your day job,” means more than anyone thinks.

Money from a business

Successful businesses enjoy income and profits from operations. A well-run business can survive lean years or balance losses in bad seasons with profits made in better earnings periods. Increasingly, authors recognize they need to think of themselves as “a small business,” but there’s a big difference between a writer who has a writing business and an author living off royalties. I’ll cover that soon in another blog.

Interest on loans and investments

Earning interest on loans is a great way to make money if you have money to lend and large numbers of borrowers don’t default. Insert obligatory sub-prime meltdown reference here. Authors often overlook the fact that an author’s advance is simply a loan with a very high invisible interest rate. In the publisher’s accounting, the author is the borrower and the publisher collects the interest. Details soon: watch this space.

Each approach has a pro and con: risk and return.

Published authors, however, have the best model of all, the entitlement. An entitlement is an arrangement where someone, either an individual or organization, collects a sum of money over time, solely because they possess the entitlement. The author’s entitlement comes from having written the book–as an original work.

Entitlements are all around us. Governments grant themselves entitlements by their right to levy taxes. Governments also grant entitlements to people and groups. Kings used to grant entitlements along with titles. What regency romance fan is unfamiliar with the desirable bachelor possessing an estate and “a thousand a year?” Social Security is an entitlement for those who work and pay into the system, the low-wage worker and the Rockefeller alike. Utilities, such as water and gas companies all work on the entitlement model: you can change what you use, but it would be difficult, if not impossible, for you to buy services from anyone other than the provider who serves your area.

An author who writes a book can expect (subject to individual contract details) to receive a percentage of the sales price of every copy sold of that work and a percentage of the money earned by any derivative work produced. This has worked well because the author has taken on the costs of development in preparing the proposal or writing the whole book. Once the rights are licensed to the publisher, everything else: designing and manufacturing the physical books, marketing and sales, distribution and retail point of sale, are out of the author’s hands. The book has entered the business model of competitive capitalism. An entitlement based on the sales price of the book is reasonably accountable for the publisher, and understandable by the author. The publisher can plan and manage costs under the publisher’s control any way that seems viable, subject only to paying the author’s entitlement.

Here’s my point. Publishers think of themselves as competitive capitalists yet their business is organized around the author’s entitlement. Being aggressive business people, publishers have traditionally reacted to the author’s entitlement in a variety of ways which agents and savvy authors have learned to resist or accommodate.

Publishers’ financial strategies for dealing with authors’ entitlements fall into some common areas:

  1. Minimizing funds at risk. Reduce risk by minimizing advances and royalties while maximizing the rights they acquire. This is the most visible strategy, easily understood and most negotiable by experienced agents. Publishers want to buy things cheap. OK, an obvious goal and we can’t blame them, but authors and agents can hold out for a fair deal.
  2. Postponing payments for as long as possible. Payment on delivery has become payment on acceptance, but the publisher is in control of the meaning of the word “acceptance.” Delaying when the book is “accepted” can delay payment for months (savvy agents can help an author here, too). When income from sales of derivative works, for example if the publisher holds the right to sell translations, is accounted to the author’s credit is also invisible to the author. Look for a future blog on this.
  3. Reducing amounts due. Reducing the author’s royalty by giving greater discounts to resellers; the high-discount clause(s) can be tricky and again, savvy agents can help an author here. Look for a future blog on this; publishers are caught in the middle between aggressive booksellers and authors and are not entirely responsible.
  4. Operating partly on a non-entitlement basis. When possible, publishers seek to originate content so no single author has an entitlement; authors can be given “work made for hire contracts” as day labor. Copyright resides with the publisher or packager. Most licensing based publishing limits or removes the author’s entitlement. Authors who write for a fixed fee are stripped of entitlements. Authors who write in licensed series have the value of their work drastically reduced and become piece workers.

As publishing has evolved, the value of the author’s entitlement has been under various pressures, but because the fundamental publisher’s business model is one of competitive capitalism, authors, agents and publishers have been able to consistently find an economically agreeable point and strike deals. What looms on the horizon and is already at work in some areas, are changes that flip the publisher’s model upside down.

In my next blog, I’ll talk about how publishers, distributors, and booksellers are attempting to reshape their business models to create entitlements for themselves.

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Will Apple save publishing?

Friday, December 14th, 2007

Apple LogoI’m not really in the business of predicting the details of Apple product releases, but I do have a good feeling for what they are capable of, having been a Mac user since 1986. Today, I’d like to say what I hope they will announce at Macworld on January 15, 2008. I say this not from having spoken to any Apple employees, ex-employees, or subcontractors to Apple on any continent. This is just what I hope they will announce because it is the product I want to buy and use.
There’s a much rumored “ultra-thin-laptop” with a 13.5 inch screen (same size as the current MacBook) that will sport only flash memory and sell for about $1,500. Then there’s the less popular rumor of an Apple Tablet computer, equally small, featuring some kind of touch screen, but declared unlikely since Microsoft-based vendors have pretty much killed the tablet category. 
The problem with both such products is that they are small markets without some killer app or new usability. Personally, I’d buy an under two pound MacBook, because I like to travel light, but those of us who would like such a thing may not be a big enough market. 
I hope Apple will change the world again because authors and readers of books need a technological solution to the problem of manufacturing books and getting them into reader’s hands. Here’s how Apple can do this. Apple has iPod-class-success with the iPhone and has also been selling a solid state iPod with the iPhone’s touch screen called the iPod Touch; basically, an iPhone without the phone. What’s promising about these devices is that the iPhone’s touch screen interface allows the user to flick though PDF, MS Word and text files in a way that feels like turning the page in a book. Reading a lot of text on an iPhone or iPod Touch is not very attractive because of the 3 1/2 inch screen, but it is possible and the interface feels right. Click off to the Apple web site for the demo movies on the iPhone and iPod Touch if you aren’t familiar with the way they work. So I’m hoping Apple’s new product will be… pause for dramatic effect …

The MacBook Touch

Think of an iPod Touch scaled up to a 13 1/2 inch screen but not much thicker. It’s a slate, a simple glass book, in which you can see pages of text or pages of media or videos, but has no physical keyboard like today’s laptops. You don’t need a physical keyboard to read a book. It surfs the web whenever it’s in a WiFi zone, does everything a MacBook can do when linked to the existing Apple Wireless Keyboard and has both the touchscreen interface and its virtual keyboard.  The current Apple touch interface: pinch to change the size of the text and images, flick to turn pages, rotate the device to switch from portrait to landscape, is already ten thousand times better than the Sony or Kindle’s clunky buttons. 
Here’s where we book people have to change our thinking. Everyone’s been assuming an ebook reader has to be a special purpose gadget that poorly mimics a book while trapping the consumer in a business model that ties the reading experience to the vendor’s device, file encoding format and sales channel. The Amanzon Kindle is a fine example of this kind of thinking. As an agent, I can grasp the idea of some sort of limit on free re-distribution of duplicates of the electronic book, but I can’t get used to limits on how and where the book is read. Publishing has survived hundreds of years with no control of what happens to a purchased book. You can read it sitting in your chair, at your desk, on a plane  or give it to your nephew or a total stranger. What I can’t get on with is the limit of reading something only on one single platform or when tethered to the shop that sold it. How many books would be sold if when you bought a Random House or Putnam novel, you had to read it by the light of the publisher’s light bulb and store it in a bookcase made or licensed by the publisher.Book people, including many readers, say, “we will never give up the paper book.” Yet, our reading habits have already changed. We already read more on our PCs than we read in magazines and lots of types of books. We read personal mail, business documents, play games for enjoyment, and read the stuff we just wrote on screens. What I want is one thin device that is portable like a book, but on which I can read anything pretty much anywhere. The iPod does this well for music and has sold over 120 million units. A thin MacBook touch could do this for documents. And being a MacBook, even if I have to flip it over or haul out the Wireless Keyboard for serious typing, it’s a computer too.
So without making the user accept another special purpose device or subscribe to a new proprietary service, Apple will have the world’s best electronic reader. Sure, you can expect books bought from iTunes Bookstore to have some kind of DRM, but since it reads PDF and text files too, it should be easy to download your own documents from your PC, Mac or the net. A MacBook touch would be a non-proprietory device that can read proprietary formats, as well as your company’s secure documents, since it is really a Mac laptop. What is not to like about this?

Now for the key objection.

It’s too expensive. Cost was the big objection everyone made about the first iPods and look how that prediction turned out. My hoped-for device would be too expensive if it was a traditionally visualized book reading machine like all those that were cheaper, had faint, gray screens, and failed. But would it be too expensive for a flat, touch-screen news, magazine and book reader that reads every web site in the world in full color? Would it be too expensive as a portable wide-screen movie player (sans DVD drive), music player and audio book player? Probably not.
So this is what I hope Apple will announce. If I’ve accidentally blown some of Apple’s secrets, I apologize. If Apple is reading this and didn’t quite think of this product yet, well, get to work on making it. Readers need this. The publishing industry needs this. I’ll buy the first one.

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Posted in Business, Publishing, Technology | 6 Comments »

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