Reversal of Royalties: A Modest Proposal To Traditional Publishers

When does a book go out of print if it is made available in eBook?  Many contracts, particularly those pre-dating the eBook explosion, are not clear on this point.  Some clauses state if sales fall below some ridiculously low number, like less than 100 sold on the last two royalty statements.  That means a publisher can keep rights to a book if it sells just 100 copies in a year.

That does neither the publisher, not the author, much good.  It is actually an inducement for authors to NOT promote their books, hoping sales fall low enough to get the rights back.  To make the effort to promote a book at 25% of 70% for eBooks is not that thrilling.  And for any book that has not earned out, there is zero incentive.

I propose a solution:  Reverse royalties.

Give the rights to the book back to the author, along with rights to the cover (if available) and an electronic version of the edited book.  In return, the author pays the publisher a 25% royalty.  I can assure the publisher that they will make more money this way than keeping the rights, and I have the numbers to back this up (later in blog).

An author will be much more motivated to promote a book they make 70% eBook royalty on and also control.  Also, one on which they can track sales daily and get paid monthly.  The author has the option to bring the book back into print via Lightning Source if they desire for hand sales (if book is not available in print from publisher).

This is a win-win situation.  The author makes more money.  The publisher makes more money.  Some might ask why should the author pay the publisher anything?

First, for the rights back.

Second, for the electronic version of the edited book and the cover, if available.

Third, and this is something that authors have to start acknowledging about backlist, for the editing and other work the publisher put into the book.

Fourth, such books have more ‘street cred’ than all the ‘material’ being self-published.  Putting on the cover As Originally Published by Random House will make a difference.  And it’s promoting the publisher.

Let me give you numbers to prove this.  I have a series with Random House (which I will not name since under the current system, I want the complete rights back to) that has sold over a million copies in mass market.  The books are available in eBook now but sales are anemic since the publisher does zero promotion.  But high enough to crest that 100 mark per year.  But not enough to make me excited to do any promoting.  Plus, on those books that didn’t earn out, I have zero incentive to promote them, since any monies earned go to the publisher.  I don’t begrudge the publisher that money since I got the advance, but there’s no incentive.  If Random House gave me the rights back here is what would happen:

I had a series with Berkley under a pen name.  Six books in the Atlantis series.  They went out of print before eBooks became big and I got the rights back.  I’ve put them back into print via eBooks on an array of platforms (Kindle, iBookstore, etc.) and the first few in POD via Lightning.  My sales per month for those books top my sales per year for my Random House series as I am actively promoting those books via social media, my own publishing company (Who Dares Wins Publishing), at talks, etc. etc.

Random House sales via eBook per year run around 120.

My sales for Atlantis books run in the hundreds per month and are steadily growing.

I’m seeing a lot of “I hope traditional publishers die and rot in their slush pile of rejections” coming from authors lately and I think that’s not a very productive attitude.  I believe we all have to work together to succeed.  The future is uncertain and we all have the same goals:  sell books.  So let’s work together.

Here’s where publishers will balk:  they’re holding on to those rights not because they necessarily generate income, but on the off chance the author breaks out or something happens and those books become a hot commodity.  That’s understandable.  Publishing is always a crap shoot.  But surely, something can be worked out against that possibility in the meanwhile and keep generating more income for all involved?

My open request to Random House.  Give me the e-rights back to these books and I will pay you 25% of my profit for all books (even those that earned out) for the next four years.  If the books or I become such a hot commodity you feel the need to re-issue the books in a major way, rights will revert back to you.  In the meanwhile,  I guarantee you will earn more money from these books than you currently are and you will have no expenses, such as royalty statements, accounting, etc.

This is a win-win no-brainer.  Will it happen?  Stay tuned.

I recommend checking out the blog: A Newbie Guide to Publishing. Always interesting dialogue.

Kristen Nelson’s Blog is another good resources for writers and what is going on in the industry.

For great information on how to use social media effectively, check out Kristen Lamb’s Blog, especially on WANA Wednesdays.

About Bob Mayer

West Point Graduate, former Green Beret and NY Times bestselling author Bob Mayer has had over 50 books published. He has sold over five million books, and is in demand as a team-building, life-changing, and leadership speaker and consultant for his Who Dares Wins concept. He's been on bestseller lists in thriller, science fiction, suspense, action, war, historical fiction and is the only male author on the Romance Writers of America Honor Roll. Born in the Bronx, Bob attended West Point and earned a BA in psychology with honors and then served as an Infantry platoon leader, a battalion scout platoon leader, and a brigade recon platoon leader in the 1st Cavalry Division. He joined Special Forces and commanded a Green Beret A Team. He served as the operations officer for 2nd Battalion, 10th Special Forces Group (Airborne) and with Special Operations Command (Special Projects) in Hawaii. Later he taught at the Special Forces Qualification Course at the John F. Kennedy Special Warfare Center and School at Fort Bragg, the course which trains new Green Berets. He lived in Korea where he earned a Black Belt in Martial Arts. He's earned a Masters Degree in Education.

Posted on September 25, 2010, in WDWPUB and tagged , , , , , , , , , , , , , , . Bookmark the permalink. 9 Comments.

  1. This sounds like a very good plan. The publisher earns profits without having to do anything after the initial deal, somewhat like having stocks. There would still be a little accounting, but SO much less, and SO much less expensive than it would have been. As you say, this would be a Win-Win all the way around–for readers, authors, publishers, and for the industry itself.

  2. This does sound like an interesting plan. I’d want more detail on the part where the publisher re-issues the books, what the publisher’s responsibilities are in that case.

    Here’s a question: When the author regains the rights and puts the books out on his own, what are the ethics of changing the book a bit, to make it more marketable in the current social/economic/political atmosphere?

    And for books that haven’t “earned out”–I’d think that, even absent any further remuneration, the author would want to push the books until they do “earn out.” For bragging rights and for the sake of fairness.

    I enjoy your thoughtful, even-handed, and creative approach to these thought experiments.

  3. Pushing a book to earn out is hard when it’s a lot of money and the publisher is doing nothing. As far as changing a book, I think it’s ok but you want to make sure you’re not fooling readers into thinking it’s a new book.

  4. I appreciate your leadership in the world of publishing. Thank you for your many informative posts. I included your blog in a list of recommended SciFi blogs.

  5. A fine and fair idea all round, Bob. Incidentally, my own small indie house already operates a system something like this.

    At the end of contract, an author has the choice to extend on an annual basis or we hand back rights, not just to raw ms, but to all our input, including design and cover work and all files, including print-ready PDF, open text for re-working, and a range of ebook formats on each title. All s/he needs to do is replace the ISBNs and adjust conditions pages.

    The single difference between your proposed system and what we already have in place, Bob, is that we take ZERO royalty from there in. The author gets 100% profit on the use s/he makes of the returned rights and material, and free and ongoing advice on how to place and market their work effectively. It’s a gesture of thanks for the time we worked together.

    Best wishes. Neil Marr

  6. Great that you give back the rights without requiring anything. Contracts for the Big 6 are going to further evolve as the form of publishing evolves. There are many authors with backlist where eBooks aren’t even covered.

  1. Pingback: Jackie Barbosa » Blog Archive » We’re ALL ePublished Authors Now

  2. Pingback: Reversal of Royalties: A Modest Proposal | Digital Book World

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