Friday, August 26, 2011

New Formatting Tips

Most authors may not realize it, but editors and agents now do a lot of their reading on eBook readers.  The most popular seems to be the Sony Reader, since it works well for both Word documents and also PDF documents.  Keeping this in mind, there are a few things authors can now do to facilitate making their works easier to locate and read on Readers.

If you have a Word document, you want to navigate your way to Properties.  Here, fill in your name as the author in LastName, FirstName format.  Next fill in the title of your work in ALL CAPS.  Under category, you can fill in the genre or subject area of your work and under status, you could fill in the format, e.g., Manuscript; Proposal; or Chapters and Synopsis.  Next, under comments, you can fill in a one- or two-sentence summary of your work.

Last but not least, do a "save as" and rename your file.  I always use the following format:  LastName, FirstName, TITLE, v[#] where [#] is the version number.  I used to tell authors to date their manuscripts, but since that can sometimes make a project that's been kicking around for a while seem outdated, I've switched to versions.  You can also use the "save as" function to trick the "date created" field into thinking it's a new file.  This is useful if you revising an old project and want to submit it without readers knowing that it's an older work of yours.

Z

Thursday, August 25, 2011

Seems It's Time for Another Reminder

This week, we sent out "reminder" emails to more than a dozen authors from whom we had requested materials but never received them.  For a couple, it appeared to be an email glitch, but for some, we also heard back things like, "I haven't sent my manuscript since, in the meantime, my beta readers have made a number of useful suggestions and I'm re-editing it."  Fair enough, but shouldn't she have known that before she submitted it?  Later, she writes, "I thought it was when I queried you, but of course I was wrong."  Don't get me wrong; I appreciate that she wants to get me the work in the best possible shape, but I think she made a crucial error:  she started querying agents before she was 100% satisfied with her work.  You shouldn't.

Querying agents is a bit like going to an open house and making an offer on it.  Can you back out?  Sure.  But you look like you don't know what you are doing.  The seller presumes that if you are offering, you are ready to follow-through.  Similarly, if you query an agent, the expectation is that your material is ready to go.

I know that some agents take forever to respond to queries (we sometimes take a while, also), but all it takes is one that reacts immediately and favorably to get you to the next step.  But if you aren't acutally ready to show your material, you risk losing the interest of the agent.

Now this woman didn't lose my interest because of the delay.  I suggested she query me again when she is actually ready to show the material.  Thus, what she did lose was time, because she is now going to have to restart the process with my firm.  Seem unfair?  Consider what happened.  She queried.  We answered and requested material.  She didn't respond. We followed up.  She finally responded that she wasn't ready to show the material.  Are we supposed to keep track of her query and keep following up?  Or should we be spending our time on the projects we already represent or on the works of prospective clients who waited until they were ready before querying us?  Seems more fair now, right?

So, do your editing.  Get your reads.  But don't query until you are ready to email the entire manuscript if the first agent you query says she wants it that day.

Z

Wednesday, August 17, 2011

In Search of...Better eBook Royalty Rates


As a literary agent, I’m deeply immersed in the ever-changing world of eBook publishing.  At times, it’s like trying to buy an airline seat at the best price.  Policies shift and change, rates shift and change, and the way eBooks are sold shifts and changes.

For example, once upon a time, eBooks were sold like regular books, meaning that Amazon, for example, essentially “owned” the eBooks it was selling, having “bought” them from the publisher at a standard discount.  Having “bought” them, Amazon could then sell them at whatever price it chose, ignoring the publisher’s suggested retail price.  This, of course, is how Amazon built market for the Kindle, by selling eBooks at a loss.  Then publishers changed the game, announcing they were switching to an agency model (I should give credit to Apple here, for essentially forcing publishers into changing the game).  In an agency model, Amazon doesn’t “buy” the books from the publisher, but sells them as the publisher’s “agent.”  Thus, Amazon is forced to honor the price the publisher sets and currently receives 30% of that price as a commission for the sale.

Under this model, publishers have been trumpeting that they make less money and that authors will make more money if they agree to accept a net royalty, usually set at 25%.  In fact, at least one publisher unilaterally started paying authors at that rate, despite what contracts may have said, but then sent out a letter requiring an amendment to continue receiving the new rate.  In the drug business, they call this “giving the customer a taste.”  Most authors see they are making more money on the net rate and happily sign the amendment.  They don’t really ask any questions.  Agents, of course, have to wonder, is it really a better deal for the client to make this switch?  After all, since when do publishers try to increase the amount of money authors make?

Since the beginning of eBook publishing, agents have sat back and pondered, What do they know that I don’t?  After all, publishers have far more information and actual bean-counters and MBAs they can afford to pay big money to ponder the financial impact of switching from a retail-price-based royalty rate to a net one.  Agents and certainly authors may not have the same resources.

So I turned to a very bright friend, Ciara Kennedy, who has an actual MBA and mad skills with Excel, and presented her with a letter from a publisher that is telling authors they must agree to an amendment to continue getting the 25% of net rate versus, say, the 15% of retail rate that might be in the contract.  She built a dynamic spreadsheet for me that showed me the following:

Based on a $15.00 cover price and a 30% commission to Amazon, the publisher makes $10.50.  At 15% of retail, the author earns $2.25.  At 25% of net, the author earns $2.63.  Hence, net is better.  This remains the case up to a commission of 40%, which is the tipping point at which a retail-based rate is equal to the net-based rate.  And at 40.14%, the retail rate beats the net rate.

So what should this mean to authors and agents?  And why is such a big issue?  Well, the answer to the second question is the same as the answer to the question, Why do I want to invest my money rather than keep it under my mattress?  Because you want to make money off your money.  And you want to make money off your eBooks, since over time they will be the only editions of your book out there.  At some point, there will, in fact, be vast, vast libraries of eBooks and the books will never go out of print.  Like characters from a Star Trek episode, readers will be able to browse vast electronic libraries and pick and choose what to read.  As an author you will want to have your books available, because even if you only earn pennies from each reader, over decades, those pennies will turn into thousands of dollars.  But you want to make sure you are making as many pennies as you can.

When I was in high school in 1983, I started working in my local independent bookstore.  I packed a lot of returns and looked at a lot of invoices.  The standard discount to booksellers then was 42%.  Today, that “standard” is more often 50% or higher.  And just as that discount got bigger, I have to presume that the commission to Amazon and other sellers will eventually get bigger.  Now, publishers will argue that it will get smaller.  That as more markets that sell eBooks open up, publishers will be able to demand better deals.  I don’t believe it.  Amazon already charges a “delivery fee” on top of its commission.  Eventually, it will probably offer to drop that for a larger commission.  Or some other game-changer will come along and figure out a way to get a better deal, thus increasing commissions to sellers of eBooks, perhaps to the point where authors would be better off back at the old retail-based rate than the new net-based rate.

Additionally, if you read publishers’ contracts, there are rates for nearly every kind of sale.  How long will it be before publishers start charging different rates for different types of eBook sales?  For example, most contracts include “direct-to-consumer” rates, which used to be for when customers used those little forms in the back of books to order copies directly from the publisher.  Because of the additional costs of processing and fulfilling such sales, publishers pay a lower rate to the author.  Very soon, if not already, publishers will argue that eBook sales directly from their sites should be at a lower royalty.  Agents and authors know, though, that cutting out the middleman means saving a 30% commission, and should fight such rate changes tooth and nail.  Publishers should be paying significantly higher rates for sales directly from their websites, e.g., 50% of net, which splits the savings from cutting out the middleman, e.g., Amazon.  Publishers will argue that building their website cost money and so they need a bigger piece of the pie.  I call, “Bull—!” at such claims.  Publishers have already built those sites and they would with or without a bigger piece of the pie.  Their costs are amortized over thousands and thousands of titles and, more importantly, they are saving money on printing, paper, and binding and on warehousing and shipping on all of those books they let go OP other than the eBook edition.  Let them put those savings into the website development and pay a fair rate to the author.

There are also rates that change over time, often escalating.  Yet most eBook rates do not escalate, and that’s one of the bigger problems with them.  Publishers have made acquiring eBook rights a deal-breaker across the board.  Printed books are going away sooner than later (already many publishers have eBook-original lists), so having eBook rights are a must.  But why doesn’t the eBook royalty rate escalate as sales increase and increase, just as the printed-book rates did?  I have yet to hear any argument that justifies not raising them.  All I have ever heard is “it’s a deal-breaker, Andy.”  That needs to change.  In fact, I would argue that, over time, the publisher’s share from eBook sales should reduce significantly.  However, I don’t imagine that publishers will ever agree to pay 75% of net to authors.  But I do think we can and should get to 50% of net quickly, though I do not look forward to trying to define “net,” what with Amazon charging fifteen cents per megabyte as a delivery fee for eBooks and no doubt looking for other ways to carve a bigger piece out of the pie.

So where does this leave authors and agents trying to decide whether or not to sign an amendment that takes them from a 15% of retail rate to a 25% of net rate?  I’d say there are few things one should do:
  1. Include language that states the author will be paid based on the actual commission to resellers, before deductions for charges such as Amazon’s delivery charge, such commission not to be accounted for at greater than 40%.  In other words, even if the commission rose to 50%, the author’s royalties would be calculated as though it were 40%.
  2. Ask that direct-to-consumer sales via the Publisher’s own website be at a rate greater than 25% of net, ideally 50% of net.
  3. Ask for escalators similar to hardcover escalators, e.g., 25% of net on the first 5,000 copies sold, 37.5% of net on the next 5,000 copies sold, and 50% of net thereafter.
  4. Always include renegotiation language following the first two years and at any point thereafter should Publisher’s standard terms improve to the Author’s advantage.
Of course, not all authors or agents will succeed at getting these terms, but the sooner we start asking, the sooner we might get there.

Z

Monday, August 15, 2011

Agencies for Sale--Or Not

A few weeks back, I opened up a Publishers Lunch Deluxe email and found myself, via my blog, quoted heavily in an article on agencies for sale and what happens or might happen when an agent dies without a succession plan.

I appreciate the attention, but I was somewhat surprised by the quotes taken...and that I hadn't been called to discuss the article before I was so heavily quoted.  But let's ignore the journalistic oversight and jump right into discussing what the article missed that was more important than what it said.

In the article, the author (
"But Zack represents the agent's position in such a contractual interpretation: He says Scalzi's letter "implies that the administrators have a continuing obligation to the authors beyond servicing their current contracts. If this position were somehow upheld in a court of law, it would radically and permanently change the relationship between authors and agents." Zack writes that "certainly anyone must agree that if a contract was signed naming the agency as the agent of record, then the commission has attached."
Ralph Vicinanza Literary Agency and the implications of what it said.  And Ms. Weinman appears to miss that most-important implication.

SFWA appears to believe that if an agent dies, the agency stops taking on new clients and selling new works, and there is no further active representation of the client by the agency, then the author has a case to cease paying commissions to that agency on deals already signed.  It was in response to this point that I stated, "If this position were somehow upheld in a court of law, it would radically and permanently change the relationship between authors and agents," and not to anything Mr. Jassin said.

Industry standard practice is that when an author signs a contract for a book represented by an agent, that agent is entitled to commission on that deal for the term of the contract, which in most cases is term of copyright.  This has been true for decades, if not a century or more, in the publishing business.  However, the implication of what SFWA states is that if an agent terminates representation of a client or the client terminates representation, then the agent should no longer receive his or her commission on prior deals signed, as he or she is no longer "actively" representing the client.  This position, if taken up by other writers' groups or even by a few heavy-hitting clients (hello, J.K. Rowling, who just quit one agency) could absolutely change the way our business operates.  Agents would no longer be guaranteed their commission for the life of the contract.  Authors might find that agents were no longer willing to space out how they took their commissions, e.g., upon selling a novel for $100,000 with a payout of 1/3 on signing; 1/3 on delivery & acceptance; and 1/3 on publication, and agent might insist that his or her entire fifteen percent commission come out of the first third, thus ensuring if the client left in the middle of the deal, the agent still got paid.

Or potentially some agents would simply stop working on commission and move to a project-based rate (like publicists, who earn thousands per month) or an hourly rate, like attorneys or accountants who earn hundreds per hour.  How will the AAR argue against reading fees if and when agents become project- or hourly-based?  How will poor authors find agents if they can't afford to pay the fees?

Now, it could be that Weinman was actually talking about something that I, in fact, never touched on in my original blog:  the subject of "unsold rights."  Under some representation agreements or clauses, if an agent does a US deal for a novel and the client leaves the agent, the agent continues to represent the unsold rights to that novel, e.g., foreign, audio, etc.  Yet that's not a legally maintainable position.  An author can't be contractually forced to allow an agent to represent him or her.  However, an author can be contractually bound to pay a commission on such rights, a position my firm has never taken.  While some agents will argue that it was the sale in the US that added value to the work and thus made it attractive to UK and foreign publishers, as well as audio and film companies, the simple fact is that  I would never want to work with a client that doesn't want to work with me.  Hence, if a client leaves my firm, his or her unsold rights go with the client.

So the really stunning part of the entire SFWA/RVLA situation to me and what I think Ms. Weinman missed in her article is what a game-changer it could be if SFWA and other writers' groups start pushing this point about ending commission payments if the representation agreement terminates.  Thanks to lawyers like Mr. Jassin, who made the point that the right to commission is about the only thing that will hold up in court under certain circumstances (versus the right to continue to represent unsold rights), I imagine that agents will soon be rewriting their agreements with their clients to be far more specific.  And I imagine that the entire discussion is one that will weaken agent/author relationships and further exacerbate the often we vs. them attitude that so many writers' groups seem to take.

In the end, the author/agent relationship should be a partnership born out of trust and mutual respect.  It's a shame that some agents don't prepare succession plans, but barring a failure by the agency to keep paying its clients what they are owed, I see no positive results for our industry if writers' groups or authors begin lobbying that agencies can be separated from their commissions upon termination of representation.

Z

Tuesday, August 09, 2011

The July Monthly Round-up

Well, we're a few days late, but here's the Monthly Round-up:

In July we...

...received 39 queries, rejected 4

...received 11 sample chapters, rejected 12

...received 1 proposal, rejected 2

...received 6 manuscripts, rejected 0

Currently we have on-hand to read...
...52 eQueries

...8 sample chapters

...5 proposals

...at least 8 full manuscripts.  I say "at least" because some are by current clients and may be revisions or may be under revision.  Needless to say, we have a lot of reading to do!

And in July and August we welcomed three new clients to the list including, Mark Mamone, Rus Wornom, and Shannon Phillips.  (See?  And you thought we never took on new clients.  We do!)
Our oldest sample chapter/proposal is dated June 11th so, if your submission was sent after that date, know that your work is still being considered.

Thanks.

Z