Friday, March 16, 2012

When is a Dodgy Publisher Like a Stopped Clock?

Posted by Victoria Strauss for Writer Beware

A stopped clock is right twice a day. A dodgy publisher is right...well, less often. But sometimes.

I'm thinking of one publisher in particular--about which Writer Beware has gotten a LOT of complaints--that advertises itself by claiming that it pays 50% royalties. That sounds impressive, right? Except that what the big print giveth, the small print taketh away.

If you're unlucky enough to get an offer from Dodgy Publisher (and just about anyone who submits does), the contract reveals that the 50% isn't quite what you may have expected. It's actually 50% of what's left over after printing costs have been deducted from "the sale price."

Bad enough to have printing costs taken out. But what writers who aren't familiar with dodgy publisher-speak may not realize is that "sale price" doesn't mean list price, but the publisher's net income--the money it actually receives from retailers and distributors, which, because of discounting, may be as little as 40% of list. (This is what's known as a net profit royalty--and it's not a good thing.) So instead of getting $7.50 on the sale of each of your $15 books, you might actually receive as little as $1 ($15 x 40% = $6, less $4 for printing = $2 x 50%).

Not exactly what you were dreaming of.

Many authors, unfortunately, don't read their contracts carefully enough, or don't recognize the misleading terminology, or are just dazzled by the hype. I recently heard from an author who was convinced that Dodgy Publisher had breached his contract because it had paid him a royalty of around $1.75 on a $15 book--rather than the $5.50 he believed he was due (50% of $11, assuming a $4 printing fee).

His assumption, of course, was that the royalty calculation would always be based on list price. But the books had been purchased from a major online retailer. When he contacted the staff at Dodgy to demand that they pay the full 50%, they gave him quite a reasonable explanation of wholesale discounts and net income. He wasn't prepared to accept this, though--not only because of his confusion about the meaning of "sale price," but because he was certain that "wholesale" meant "purchased in bulk," while these books had been bought one at a time.

So he wrote to me. I had to explain to him that Dodgy Publisher--which had taken advantage of him in plenty of other ways--was actually having a stopped clock moment: its explanation was entirely correct, and although its contract terminology was deliberately confusing, there was no breach. It was painful to take Dodgy's side, but in this case I had to do it.

Writers are a cautious (not to say paranoid) bunch. But I often see them worrying about the wrong things. My correspondent became incensed when he believed his royalty payments were being shorted, but apparently had no problem with Dodgy's print cost deduction. I also often hear from writers who are distressed about perfectly reasonable contract provisions--such as the standard list of author warranties--yet overlook really heinous language, such as a perpetual option on future works, or royalties that are cut in half for sales at standard wholesale discounts, or the absence of a reversion clause in a life-of-copyright contract.

It's so important not just to read and understand the fine print (my mantra), but to constantly pursue knowledge about writing and publishing (while always being discriminating about the source) so you'll know how to properly evaluate the opportunities (or pitfalls) that come your way. The more you know, the better armed you will be against Dodgy and its ilk.

27 comments:

Grumpy Bulldog, March Madman said...

Now I wonder who Dodgy Publisher really is...

A. M. Sawyer said...

sounds like PublishAmerica to me...they promise you the world, and all you end up with is dirt in your face

Livia Blackburne said...

Any particular reason you're not mentioning Dodgy Publisher by name? Just curious, cuz Writer Beware usually does.

Victoria Strauss said...

I didn't name the publisher because I don't want them to be able to threaten the author with some sort of defamation-by-proxy if they happen to read this post and recognize themselves. (Such a threat would be baseless, since the info here is strictly factual, but threats of this sort are a favorite dodgy tactic and they can be scary if you haven't experienced them before.) Email me (beware [at] sfwa.org) or DM me on Twitter and I'll give you the name.

(It's not PublishAmerica, by the way.)

Rick said...

You are seriously brilliant, Victoria. Great post.

C. M. Albrecht said...

That's just like TV ads. They promise everything and the small print which goes swiftly past at the bottom of the screen takes it all back.
I recall a smiling David Leisure and his Izuzu ads saying: "I'm lying."
Only honest TV ad I ever saw.

HistorySleuth said...

And if they recognize themselves, they have to acknowledge you are right -- even if they publicly say otherwise.

Charmaine Clancy said...

Certainly an eye opener.
Wagging Tales

Christine Tripp said...

Victoria, could "net" also include Publisher expenses, such as office, and even salaries (editors, themselves) and just about anything else that could remotely be considered business related? Or, is there some sort of line drawn on what can be deducted from retail sales to equal net.

I feel for you, having to give a "dodgy" the thumbs up, when it comes to facts are facts. It IS important to, not just read, but understand every clause in our contracts. Even when it's with a publisher that is perceived by the industry as legit. We are often so blindsided by a contract offer by even a well known name publisher that the "nets" and the "50/50 partnership forever" clauses are glanced at and just as quickly dismissed, in the rush to sign. Only when the glow wears off and the publishing relationship starts to fall apart, do we realize how important all the lawyer speak really is. I know all about that, sadly, learning it the hard way (but at least learning IT!)

docstar said...

Victoria, can you recommend a site where publishing contract terms are, if not discussed, defined (and maybe have a note like "This is good, this is okay, this is bad")? I know I'd have an attorney explain any contract to me anyway, but it would be nice to have some working knowledge to begin with. Thanks.

Victoria Strauss said...

Christine and docstar,

There's no publishing terms police, so although there are accepted meanings for various terms, they can really mean whatever the publisher wants them to mean.

The generally accepted meaning for "net" is "the publisher's actual cash receipts" but I've seen it defined by publishers to mean all kinds of things--including what Christine describes, which is not net, but net profit. Sometimes this kind of confusion is due to inexperience--the publisher's staff simply don't know what the accepted terminology is. But sometimes it's deliberate, and the publisher is intentionally using a term like "sale price" in order to mislead.

The important thing is to be sure that the terms are defined within the contract. That way, however the terms are used, you can know exactly what they mean. If your contract's royalty clause states that royalties are paid on "net receipts" or "net sales" or "sale price", but doesn't include a definition of those terms, you really can't be sure what will actually be paid.

Here are some acceptably clear definitions, taken from contracts I've seen recently:

"Net sales are defined as the Total Dollar amount that is actually received by the Publisher from the wholesale or retail sale of the WORK minus the Total Dollar amount of any Returns of the Work."

"For the purposes of this Agreement, 'net receipts' is defined as the catalog retail price less wholesale discounts and/or distribution channel fees."

"For the purposes of this Agreement, 'net' is defined as the total dollar amount received by Publisher from the wholesale or retail sale of the Work minus any fee charged by a distribution channel."

A definition that should warn you to stay away:

"'Publisher's net receipts' is the amount determined by deducting all manufacturing costs of the copies sold from the amount received by the Publisher, net of returns."

Victoria Strauss said...

docstar,

I started to respond to your question about publishing term definitions, but it's an important question and I don't want to bury it in the comments--so watch for a blog post next week.

Liz said...

Assuming I ever get that far, I'd have no choice but to read the contract anyway, or else my family would never forgive me. Yes, some of them are involved in the legal profession. Not necessarily publishing, but all emphasize the careful reading of any contract you may be called upon to sign.

Anonymous said...

This is actually what we call a "vanity press." it's an old scam from way back. Why not name the SOBs? You're telling the truth, so what's the big deal?

Anonymous said...

When are you going to cover the scamming of the Steinbeck estate by your attorney???

Victoria Strauss said...

Anonymous, who are you alleging is Writer Beware's attorney?

Jeanne said...

Wow, thanks for this, Victoria.
I was offered one of those contracts, and my first impulse was SIGN ME UP! IT'S A CONTRACT! but I slowed myself down and bought one of their books so I could see their product. Some specifics about the contract were vague and the book was formatted in a way I found unusual and unappealing. I came up with a list of questions about both their product and their contract.
When I asked my questions, the publisher withdrew their offer, just like that, and wished me luck finding some other publisher who would 'cater to my needs.' Like I was some kind of diva for asking questions.
I know I'm better off without them, especially after reading your post today. So thank you.

John Durran, Author said...

Great article Victoria!

The fine print can be brutal...why not hire a publishing lawyer for an hour to look over the contract?? sure, it is an expense but it could save you headaches down the road...

Cheers,
JOHN

Patrick said...

Just because they're right, it doesn't make it right...

Anonymous said...

I have an email from AC Crispin referring me to your attorney, so you know who he is already you dodgy playa!!!

Victoria Strauss said...

I know who currently represents Writer Beware staff for one specific matter, Anonymous. What I want to know is whether you do.

Phil said...

Thank you! This post meant the universe to me.

Anonymous said...

As I told you earlier, I have an email from AC Crispin naming your attorney by name, and it is the same person who cheated the Steinbeck estate. So when are you dodgy playas coming out with the story??? Can you also post some of the complaints you received about the 20 worst agents? It's been over 6 years and you still have yet to produce a single complaint about any of them. Meanwhile your attorney ,as identified by AC Crispin in an email, has been suspended from practicing law for "mental deficiency" by a court in Illinois. When are you going to cover that loopy story about your attorney?

Victoria Strauss said...

"Anonymous," why don't you post under your real name? Or would that too clearly reveal your "agenda?"

I have some questions for you. When did you receive this purported email, and what was it in regard to? Please be precise. What is the name of the attorney you're accusing of cheating the Steinbeck estate, and what's the basis for your allegation? What is the name of the attorney who currently represents members of Writer Beware? I think you're in a good position to answer all these questions.

Be sure to phrase your responses carefully--it's important, when making allegations, to stick very closely to the facts.

Anonymous said...

I have to laugh. I don't see you sticking to any facts! When are you going to reveal any of the complaints you got? You've never listed one or said who complained. And what about "Miss Snark" --just another one of your scams?
I don't owe you any answers. YOu need to PUT UP OR SHUT UP!!!

Anonymous said...

You guys are really trying to distance yourself from that attorney, aren't you?

Victoria Strauss said...

It's hard to distance yourself from someone when you haven't been given that person's name. Why are you unwilling to provide that information?