Subsidiary rights contract question

Bleak House Books said:

We take great pride in the aesthetic values of our books. (snippage)
We have close relationships with our authors. (snippage)
We get booths at places like Book Expo America and regional trade shows. (snippage)
Those things don't always come standard with the small publishing experience. Those are important to some people. YMMV.

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I agree that those are good, and all other things being equal, they'd be points in favor of going with Bleak House over a publisher who didn't offer them. What I'm uncomfortable with is the idea that these things make up for the reduced author earnings, since that's effectively saying that authors are subsidizing this great publishing experience.

Taking the deal

Bleak House Books said:

In my opinion (biased as it certainly is) if I was to get $500 less, but I was getting a publisher who cared about my project and me as a person, if I was going to get a book that looked and read beautifully, I was going to get a good advance, if I was going to get a pre-pub push with reviewers, buyers, and trade shows, I think I'd be ok with $500 less. Especially if it meant the publishing company could SURVIVE and help other authors. But perhaps we disagree.

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Bleak House: I would take this deal for my first book. I'd be happy to get my big, fat foot in the door. Then write the next book. Thanks for your posts.

I'm with Bleak House

NicoleJLeBoeuf said:

.Gods, I'm happy to hear Uncle Jim spot this one. In the political arena, just for example, this fallacy gets abused to the max and not enough people get called on it. "You're against the war in Iraq? Then maybe you'd prefer Sadam Hussein gassing another small nation into oblivion?"

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Again, I have to agree with Bleak House. I'm against the war in Iraq. I got a son there. What's your stake in it Nicole?

Trish

WhetherOrNot said:

Again, I have to agree with Bleak House. I'm against the war in Iraq. I got a son there. What's your stake in it Nicole?

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Trish, you missed the point. The post wasn't about the war. It was about the fallacy of declaring "If you don't like X, you must like Y" when there are more options than X or Y.

The formal name of the fallacy is the "fallacy of the excluded middle" or the "false dilemma" (depending upon whether one's preferences run to Aristotle or medieval philosophers). A better example (less inflammatory… well, maybe!) might be:

and, from the opposite point of view:

Note that both of these positions have appeared with regularity in the press (and online) in the last few years!

The fallacy is also expressed as "If you're not with us, you're against us" and "everything is black and white—there is no grey," but that might be just too easy to spot.

Aconite said:

Trish, you missed the point. The post wasn't about the war. It was about the fallacy of declaring "If you don't like X, you must like Y" when there are more options than X or Y.

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In fact, you can write a book using that idea. I am. It's turned out somewhat interesting as the enemies are each trying to manipulate one group of people into fighting their enemies through various means.

Aconite and Jaws: Good point!

Dave: Sounds like a very interesting book.

Trish

I'm sorry I missed it. I apologize. I should not try to read posts when I'm asleep.

Trish

No worries, Trish. We all have our moments. Mind tend to be late at night, too, since I'm not a very good night owl... and here I am within an hour or two of being up past my bedtime, too. I must be asking for it!

I haven't yet been in that pleasant position of having to deciding under what terms I'd let a book of mine be published, but I tend to agree with the majority here that if my book is good enough to see print, there'll be a publisher who wants it, will give it the quality printing it deserves, and who'll agree to royalties-on-cover.

I also am swayed by the logic that it is my responsibility as an author to protect the authors that come after me. Every time a royalties-on-net contract gets signed, a fairy falls down dead--I mean, a publisher gets the message that writers will put up with royalties-on-net contracts. The less we ask for now, the less will be offered next time. And the more we hold out for a good/fair deal, the less resistance there'll be to the next writer who tries to hold out for better terms.

It's a "giving permission" thing.

NicoleJLeBoeuf said:

I also am swayed by the logic that it is my responsibility as an author to protect the authors that come after me. Every time a royalties-on-net contract gets signed, a fairy falls down dead--I mean, a publisher gets the message that writers will put up with royalties-on-net contracts. The less we ask for now, the less will be offered next time. And the more we hold out for a good/fair deal, the less resistance there'll be to the next writer who tries to hold out for better terms.

It's a "giving permission" thing.

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What about a contract on Cover, but with an $1000 advance instead of a $3000 advance? Victoria, in the Tate thread seemed to agree that $1000-$5000 was an average range for a first time author.

Let it be clear right now, I am not setting up these as the only two options, I just wonder, if presented with these two choices, which one you'd chose.

Bleak House Books said:

Let it be clear right now, I am not setting up these as the only two options, I just wonder, if presented with these two choices, which one you'd chose.

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I'd choose the lower advance now and royalties on cover. It's a pay-me-now or pay-me-later kind of thing. Whether the advance is high or low the author's total income is the same.

And either way, the author's total income with a pay-on-net deal is lower.

Bleak House Books said:

What about a contract on Cover, but with an $1000 advance instead of a $3000 advance? Victoria, in the Tate thread seemed to agree that $1000-$5000 was an average range for a first time author.

Let it be clear right now, I am not setting up these as the only two options, I just wonder, if presented with these two choices, which one you'd chose.

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I'm exceedingly wary of making hypothetical decisions like this. Feels like tempting fate. Call it a superstition, if you will.

I also distrust a question that feels like entrapment rhetoric--but I'll give you the benefit of the doubt that you're actually curious, not waiting for me to give the "wrong" answer so you can say "Gotcha!"

That said, Jim put it best: Your hypothetical is just pay-me-now versus pay-me-later. The choice between the two is personal and will differ from person to person. My personal preference is for pay-me-later. That mostly has to with my conservative approach to personal finance. I don't like to tempt myself to blow a book's entire earnings on one big purchase; I have a mortgage to pay.

Next thing to remember is, the advance represents what a publisher expects the book to earn over its lifetime of sales. (But you knew that, being a publisher yourself.) So $1K is a low expectation, and $3K is a higher expectation. As a first time author, I'd much rather exceed expectations than fall short; I want a second contract with this publisher. If my book sells $2K, I'm in a better position to negotiate for that second contract if my first book exceeded sales expectations by 200% rather than falling short by a third.

So, that's the kind of payment schedule I, personally, would prefer. Just my own opinion. Not to be taken as a recommendation to anyone else. Use only as directed. Void where prohibited by law.

James D. Macdonald said:

I'd choose the lower advance now and royalties on cover. It's a pay-me-now or pay-me-later kind of thing. Whether the advance is high or low the author's total income is the same.

And either way, the author's total income with a pay-on-net deal is lower.

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Depending on sales, that isn't always going to be true. If a book doesn't do well for whatever reason, the author may never see three thousand dollars with the paid on retail royalties, whereas it is guaranteed on the paid on net contract.

Again, I'm not saying these are the only two options, but in comparing them, I personally, would go with the bird in the hand. But, I'm not going to knock anybody else for having a differing opinion.

Bleak House Books said:

Again, I'm not saying these are the only two options, but in comparing them, I personally, would go with the bird in the hand.

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Okay, I see the "gotcha" you want to play. Isn't it true that if the publisher overpays on the advance that all those bad things you keep talking about will happen to that poor, beaten down attacked-by-authors publisher?

I can work out the numbers for you, but I'm frankly not interested in showing where you're dealing off the bottom of the deck. A guy with degrees in philosophy and english should already know where he cheated.

Sorrry, chum. Play your games with someone else. Your deal still stinks: No amount of clever-clever argument will change that.

No, actually, I will work out the numbers.

Let's take a paid-on-cover (the honest way) deal:

The writer gets a $1,000 advance, and his book only earns $2,000 total. What would it take to do that?

Let's keep this consistent with the other examples. Twenty dollar book. 12% royalties. Half are sold at 40% discount, half at 60% discount.

Fair so far? Any numbers you'd like to change?

To earn that much in royalties with 12% of list, the total sales would have to be 834 copies.

Now suppose the publisher had paid a $3,000 advance against 12% of net. Same 834 total copies sold.

The author walks away with $3K, and no chance of selling another book to that publisher. The publisher takes a $1,999.20 loss on that advance. The effective royalty rate he's paying is 18%.

Is that what you're asking for? That's your idea of fair? That's your idea of good business?

I'm perfectly willing to take a hit beside the publisher. If the book doesn't sell maybe I should have written a better book.

The quality of the book I write is under my control. What isn't under my control is the wholesale price the publisher asks. I'm not willing to take that hit -- to donate part of my income to the publisher.

James D. Macdonald said:

Okay, I see the "gotcha" you want to play. Isn't it true that if the publisher overpays on the advance that all those bad things you keep talking about will happen to that poor, beaten down attacked-by-authors publisher?

I can work out the numbers for you, but I'm frankly not interested in showing where you're dealing off the bottom of the deck. A guy with degrees in philosophy and english should already know where he cheated.

Sorrry, chum. Play your games with someone else. Your deal still stinks: No amount of clever-clever argument will change that.

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James, I've tried making this a civil discussion, going so far as to apologize for any part in the earlier derailment. I put what I thought was an interesting question to you--something that I thought the people following this thread might want to think about.

So, all of the "Sorry, chum. Play your games with someone else." is a little dramatic for the situation. And for somebody who got so worked up because I read into his thoughts, you sure are putting quite a bit of intent on my behalf that isn't there.

Victoria looked at a sample contract from our company and didn't have the overwhelming sense that we were trying to cheat anybody. She didn't think the deal "stinks." Why is that? How can it be that another expert on this board seemingly disagrees with your verdict that I'm trying to cheat somebody? If this was such a black and white issue that you're trying to make it out to be, why are other people seeing gray?

I didn't say you were trying to cheat anyone, pal. You're putting words into my mouth again.

I said you're offering a bad deal. I still say you're offering a bad deal.

And I'm saying that you're arguing badly. Your arguments are a grocery list of fallacies, when they aren't factually untrue. Not too impressive. Maybe it isn't game playing. Maybe it's just sloppy thinking. Do you have some other explanation?

James D. Macdonald said:

A guy with degrees in philosophy and english should already know where he cheated.

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James D. Macdonald said:

I didn't say you were trying to cheat anyone, pal.

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Those are your words from your mouth.

James D. Macdonald said:

And I'm saying that you're arguing badly. Your arguments are a grocery list of fallacies, when they aren't factually untrue. Not too impressive. Maybe it isn't game playing. Maybe it's just sloppy thinking. Do you have some other explanation?

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Here are some numbers that prove my point.

We have a book. $20 cover price. In the first situation the author is getting paid royalties on cover price (12%). The author gets a $1000 advance. The book sells 1000 copies. ALL the books sell at cover price.

Total money to author $2400

We have a second book. $20 cover price. In the this situation the author is getting paid royalties on net (12%). The author gets a $3000 advance. The book sells 1000 copies. All the books sell at cover price.

Total money to author $3000

You said

James A. Macdonald said:

And either way, the author's total income with a pay-on-net deal is lower.

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In the case above, unless there is sloppy thinking that I'm not accounting for, the author's total income is greater on the pay-on-net deal. That was my point.

Bleak House Books said:

Here are some numbers that prove my point.

We have a book. $20 cover price. In the first situation the author is getting paid royalties on cover price (12%). The author gets a $1000 advance. The book sells 1000 copies. ALL the books sell at cover price.

Total money to author $2400

We have a second book. $20 cover price. In the this situation the author is getting paid royalties on net (12%). The author gets a $3000 advance. The book sells 1000 copies. All the books sell at cover price.

Total money to author $3000

You said

In the case above, unless there is sloppy thinking that I'm not accounting for, the author's total income is greater on the pay-on-net deal. That was my point.

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You're not arguing like circumstances. Any time the publisher makes an advance that is more than sales, the author benefits (in the short term anyway). But if you paid the same $1000 advance, the authors cut is -- what? How do YOU define net? Less thatn $2400, anyway.

Basically you're arguing that if you make a mistake and pay a larger advance than you should, then you shouldn't have to pay for it. You of all people should know that's not how publishing works, so I can only conclude the argument is disingenious.

To my mind, this argument has gone on too long without any new information. It still comes down to this: if a writer has the choice, he should go with a publisher that will pay List.

Given your policy, I doubt if I will be submitting to Bleak House. The prospects seem -- well -- bleak.

Bleak House Books said:

Those are your words from your mouth.

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I was talking about your argument, which is a false argument. That's the "cheat." You're trying to claim that I was talking about your contract. That claim, itself, is a cheat.

This argument that you're making right now, like others you have presented, is false and misleading. Not only that, it is obviously false and misleading. Listening to your attempts at rhetoric is like watching a six-year-old trying to deal off the bottom of the deck.

When I say your arguments are false and misleading, this says nothing whatever about your contracts or your business dealings. Only about your arguments.

Are you totally clear on the difference?

Here are some numbers that prove my point.

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Your numbers (which are quite similar to the ones I've already presented) prove my point. Up until the time a book earns out, whether the deal is pay on net or pay on cover is immaterial. Your example requires a foolish author and an incompetent publisher.

You're asking whether it's better for a writer to sell better than expected or worse than expected, and you want me to say that I should want to sell worse than expected.

In your own hypothetical there's no reason the publisher shouldn't have offered royalties on gross in the second example: It would cost him exactly the same. What does that do to the rest of your arguments? To help you out: It undermines them.

Here's where the math got away from you: You're setting up an equation where the sides aren't equivalent. You're also setting up a hypothetical that requires the author to bet that his book won't sell. Betting against yourself is a poor long-term career choice.

(I will note, parenthetically, that you're ignoring a lot of factors -- I might accept a lower advance and worse royalties from a publisher whose works regularly get major award nominations and put on year's-best lists. You're also ignoring the subsidiary rights (the topic of this thread, if you'll recall). A publisher can lose money on a hardcover and still make a profit on the book if he keeps the mass market rights, sells them to a decent place, and keeps 50% of the income. When you sell mass market rights, don't you look for a publisher that pays on gross rather than net?)

But you aren't looking for career advice from me: You're looking to justify what you've already decided to do, which is to pay royalties on net. I'm sure you'll find writers who will take your deal. Writers take worse deals than that every day and smile about it.

A long time ago, in this very thread, before you showed up, I said that if a writer had to take a pays-on-net deal that he should push for the highest advance possible because the advance money is the only money he'll see. That advice still stands.

Roger J Carlson said:

To my mind, this argument has gone on too long without any new information.

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I agree, and the tone seems to be steadily deteriorating. I'm closing this thread.

- Victoria