29 March 2013 - 12:25 pm

Independent vs Traditional Publishing: Contracts

(Part of the indie vs trad series.)

I’ve already written about creative control and services, and the trade-offs that are made when you choose a publishing route. But something came to my attention recently, so let’s talk about contracts and what you should expect from them.

This ‘something’ was a flurry of blog posts about the new scifi/fantasy e-publishing imprint of Random House publishers: Hydra (along with sister-imprint, Alibi). Particularly, their publishing contracts, and the blog posts in question were not enthusiastic or, in fact, positive in anyway. In John Scalzi’s words, “This is a horrendously bad deal and if you are ever offered something like it, you should run away as fast as your legs or other conveyances will carry you.”

Bold words. On reading the terms of the contract, however, I’m inclined to agree with him.

In short, the main points are:

  • No advance. The author is paid royalties only. This is very unusual for a publishing contract (and incredibly objectionable for most).
  • Author pays for all services. The ones I listed in the table on the services post? It’s the same – and possibly worse – than the self-publishing options; the author bears all the cost. If there’s a paper book edition, the author pays for the printing costs, too. The publishing house is simply providing all the services, and you are tied in to paying for their services. You don’t have any control over what services are done/used or how much they cost; you are, in effect, the publishing house’s customer. Which means they can make a profit from you. On the plus side, it comes out of your royalty, rather than being an up-front cost to you (this is an incredibly small plus).
  • Publisher retains all copyrights for the term of copyright. That’s longer than your life span (usually life +35 or 70 years). As Writer Beware points out, there’s no information about whether the rights might revert to you if the book goes out of print, but as this is primarily aimed at e-publishing and ebooks don’t tend to go out of print, this is a huge red flag. Very precise wording is required to give you any recourse to reclaim the rights to your work.

What does all this mean? It means that this is a vanity publishing contract, not a traditional one. It has all of (and possibly more than) the restrictions of a standard traditional contract but none of the benefits. The chances of an author actually making any money off the book are incredibly small, unless you’re lucky enough to have a runaway bestseller (and how often does that happen, really?).

In a traditional publishing contract, the publisher invests in your book. They put their money where their mouth is and take a risk on you and your work. This investment is part of why they’ll work so hard to sell your book; they have to recoup their costs before they make a profit. For Hydra (and contracts like theirs), there is no risk. All of the risk is taken by the author and it’s the publisher who is making money hand over fist before the creator sees a single cent.

In a deal like this, it is entirely possible for you to never get paid for your work. Meanwhile, the publisher is making money off every sale. This is known in the trade as ‘Hollywood accounting‘, and is a known way for publishing houses to basically scam creators.

Naturally, Random House has come back and refuted the negative vibe that these contract terms are generating. You can read the open letter from RH’s Publishing Director on Publishers Weekly and Writer Beware. They are pitching it as an awesome new style of partnership between an author and a publisher, in which everyone wins and fantastic new stories are released into the wild to skip through the literary daisies.

Bollocks. I know spin doctoring when I see it, and this is no partnership. The investment and risk is one-sided and I see no benefit for a writer to sign this contract.

To be fair (and I always try to be fair), apparently Hydra is willing to negotiate the terms of this contract. Better and more palatable deals can be made. However, as Scalzi and others point out, the fact that they’d try to offer a writer such a contract is appalling in itself. It preys on new and desperate writers, particularly those without agents (who would be all over a contract like that) or experience in the business.

What’s interesting is that Random House have realised that their spin doctoring isn’t working. They have taken the (very loud and nearly violent) criticism from various sources (including those I’ve linked to), and they have changed the contracts. There is now a (slightly-)revised ‘profit-sharing’ contract and a (more) ‘traditional’ contract on offer. Are the contracts better? Yes. Are they good enough?

Honestly, I don’t think so. There are still very tricky spots in those contracts and I’d be incredibly nervous about straying too close to them.

Kudos to Random House for listening to feedback. But they still have a long way to go before these contracts are anything approaching reasonable for an author to put their time and work into.

What does this mean in terms of traditional vs independent publishing? Well, whichever way you go, be very careful about what contracts you’re signing. Even as a self-publishing author, you have to sign deals with distributors and retail vendors.

Don’t know how to tell if a contract is reasonable or not? Any good writer’s organisation (SFWA, RWA, QWC, etc) will have facilities available to its members and they should help you to look over any publishing contract. For non-members, there’s often advice on their sites for free (but I’d highly recommend becoming a member, for this and other benefits). It’s really important to understand what you’re signing away and the long-term implications it might have for you.

Next up: Availability

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