Authors’ Guild of America

The Authors Guild Legal Services Department offers the following advice, along with a recommendation that your e-rights agreement be periodically reviewable: Although electronic publishing is still an evolving industry without clear standards, not long ago, Random House announced an intention to evenly split ebook sales revenue with authors. Before this announcement, Random House had been offering authors royalties of no more than 15% of the retail price of an ebook. Many other publishers, including Harper Collins, have started to offer a 50-50 split of net proceeds also. Therefore, you should negotiate to receive no less.

Random House has now dropped its royalty offering to 25% of net, and presents the familiar baffle/grab for doing so.

“The way the market is developing, the publisher’s list price will soon no longer be a relevant basis for calculating royalties in the digital environment…  The electronic formats are not as inexpensive to produce and publish as many believe … We have made substantial investments …  in related digital infrastructure, such as the creation and maintenance of a digital archive  … The new ebook rate continues to compare favorably to the rates we pay for other formats in which books are made available.”

Reader, please note: despite the above, the Authors’ Guild remains adamant at 50/50

POETS & WRITERS NEWS reports that the statement below was mailed by the Authors’ Guild to its 7,500 members. (http://www.authorsguild.org/):

Source: Arts Wire CURRENT at Arts Wire www.artswire.com

Authors’ Guild Warns Authors

About E-book Contracts (excerpted)

NEW YORK CITY, NY — The Authors Guild has issued a statement warning authors about e-book contracts. “The Authors Guild views agreements currently being offered by NuvoMedia, whose Rocket e-Book is an early leader in the electronic book industry, to be against the business interests of publishers and especially of authors,” the statement begins.

The Guild points out that “under NuvoMedia’s arrangement, publishers and authors who sign on to NuvoMedia’s contract surrender a whopping 60% distribution fee to NuvoMedia and BarnesandNoble.com. Even worse, unlike traditional licensing agreements, NuvoMedia pays the publisher or author no advance against future earnings, thus acquiring a no-cost right to sell books electronically.”

Furthermore, author royalties remain fixed while the distributor’s share (NuvoMedia’s and the retailer’s share combined) increases. “While the distribution chain increases its take, NuvoMedia asks authors to hold the line, seeing no increase in their royalties, Paul Aiken, executive director of the Authors Guild, told PUBLISHER’S WEEKLY.

“Electronic books hold enormous potential for the literary and educational communities,” the Authors Guild states in its letter to its members. “E-books, which are distributed over the Internet, can be simply downloaded to hand-held reading devices, thereby eliminating the costs of paper, printing, warehousing, shipping, and returns. Given these savings, readers should benefit from cheaper prices for E-books, publishers should benefit from higher profit margins, and royalty rates for authors should soar”

E-books are light handheld electronic devices which house electronically delivered information. Often content can be downloaded directly from the Internet. Manufacturers include Rocket eBook, Librius, Millennium E-Reader, the Softbook, XLibris, and the Australian based e-book. Currently, they are expensive — typically $100 to $500. However, prices are expected to fall dramatically.

Barnesandnoble.com has about 500 e-book titles available and has sold about 15,000 copies, according to the Times which quotes a Barnesandnoble.com spokesman, Ben Boyd as saying that the company has been “pleasantly surprised with the pace that customers have purchased these devices and titles.”

However, the Authors Guild states that it is “particularly wary because this low-pay model is being backed by the dominant publisher and the dominant retail book chain in the United States. Bertelsmann (owner of Random House, which holds about 40% of the adult trade market) and Barnes & Noble stand to profit enormously from this arrangement. Both hold substantial stakes in NuvoMedia, and each owns 50% of BarnesandNoble.com.”

The Guild concludes its statement by expressing concern that “If NuvoMedia secures a dominant position in this emerging market and its payment scheme prevails, authors and publishers will lose out on many of the rewards of the Information Age.”

The Australian Arts Council

The ASA  advises its members to retain full control of their digital rights. This is certainly ideal, however it is not always commercially possible. For this reason it is important that writers consider viable alternatives. A right of first negotiation on electronic rights rather than an outright grant as is the current practice provides scope for negotiation as new technologies emerge. Even if a traditional boilerplate ‘one-size-fits-all’ contract is the only available option, it is recommended that writers accept no less than a 50-50 split of net proceeds on sales from electronic publishing.