Where writers stand

From Publisher's Lunch (an industry newsletter)

Royalty Revisionism: New Macmillan Contracts Looks to Change eRoyalties and More

Macmillan ceo John Sargent wrote to agents earlier this week to present for the first time a new standardized boilerplate contract across all of the trade publisher's imprints and divisions that the company intends to introduce as of November 9, featuring a number of comprehensive changes in their basic business terms. The goal, he writes, is "to facilitate a more efficient contracting process, for ourselves as well as for our authors and their agents, and to make sure our author agreements reflect current business realities."

One notable effect, as agent Richard Curtis underscores on his blog, is a proposed new ebook royalty of just 20 percent of net receipts--a reduction from the 25 percent boilerplate offer from the other big six publishers. (Curtis's blog is the first public posting about the dispatch, and includes a pdf of Sargent's cover letter.) Sargent writes in his introductory letter that "as the methods for dissemination of content rapidly change and the distinctions between sales and licenses blur, we have determined that a single royalty rate, based on the amount received by the publisher, should apply to all exploitation of the content in digital form."

That "single royalty rate" also means the elimination of any distinction between electronic sales made by the publisher and electronic licenses by third parties--which more typically would provide for a 50/50 split--even as the opportunities for electronic licensing continue to expand. In addition to reducing authors' share of this income stream, it can be seen as a counter to the argument being softly floated by some agents lately that selling relationships with eretailer's proprietary formats, such as Kindle, should be accounted for as licenses rather than sales. For those who might resist such a change, Sargent underscores that "our starting premise is that digital rights in the content we publish in print book formats must be included in the basic grant of rights."

So, by my math, even if the publisher has none of the costs involved to physically produce the book, their contribution is still worth four times what the author's is.

And, by the way, that would work out to only about ten percent of the price a reader pays for the book.

Publishing as we know it is doomed.