Apr 4 2008
There was a Publishers Weekly alert about Robert S. Miller, former head of Hyperion, moving to HarperCollins to create a new “publishing studio.” I ignored it because it didn’t seem very interesting but three authors emailed me the story this morning so I thought I would post it.
I admit I don’t really understand all the implications of this new publishing studio idea. The marketing is tightening and the economy is slowing down. HarperCollins has decided to test some unique sales strategies out.
First is that the unit will share profits with the writers while lowering the advance. This pushes risk from the publisher onto the author, much like the epublishing business does. Second the studio won’t accept returns.
The way I understand how royalties and advances are paid out now, I can’t see this being something authors will jump for because epublishing authors receive monthly or even quarterly payments while a print published author might not see another dime until a year or so after her release.
The print published author is paid an advance for her book. Let’s say the advance is $5,000.00. That money is paid up front, either at the time of the contract signing. The book then goes for sale. A paperback author earns a little more than $.50 per book sold. In order to “earn out” the advance, the author needs to sell 10,000 books. Any book over 10,000 that is sold is $.50 earned for the author.
Assume that the author sells 20,000 books with a $5,000.00 advance and has a 30,000 book print run. The author will be owed $5,000.00 in royalties but the publisher holds those royalties against returns. I.e., because there are 10,000 books out in bookstores that could possibly be returned, the author won’t get that royalty payment until more units are sold or all the returns are in. (Feel free to correct me authors).
What HarperCollins new studio seems to be proposing is a) removing the return, b) lowering the advance and c) profit sharing. Now whether the author will share in her own profit or the entire studio’s profit is unknown.
Again, like an epublishing company, the new unit is going to focus on internet promotion instead of paid in-store promotion.
The Wall Street Journal has a good article on this. Thanks for the hat tip, authors.