Romance, Historical, Contemporary, Paranormal, Young Adult, Book reviews, industry news, and commentary from a reader's point of view

Wednesday Midday Links: Quartet Press Closes

emoticon_smileQuartet Press closes. I know. I can hardly believe it either. I’m reeling from it all. On the one hand, it makes sense to close the doors before the Press takes on rights and opens itself up to the paying public. On the other hand, it’s like completely destroying my faith in digital publishing. For all the WTF comments forthcoming, know that I am repeating that a hundred fold in my head.

emoticon_tongueHachette is so disturbed that the embargo on Ted Kennedy’s upcoming memoir was broken that they’ve hired a private detective to find out who leaked a copy to the New York Times. Apparently some publicity better than no publicity does not apply to book embargoes. Seriously, Hachette? Yen Cheong, publicist for Viking tries to make the case for embargoes, but I’m skeptical. Via Galley Cat.

eyeGiven the discussions we’ve had here on Dear Author about territorial rights, it’s interesting to see Random House Canada and McClelland & Stewart decide to close their subsidiary rights departments (like audiobooks) and outsource this to a newly created agency. In some cases, sub rights can help make an acquisition profitable.

eyeRachelle Gardner, agent, explains how an advance is paid out (either in halves or thirds) and why even an author getting a $30,000 advance per book might think twice about quitting her day job.

Advances are paid in two, three, or even four installments, over a period of time that could be a few months to two years or more. The agent’s 15% will come off the top. And you have to remember that no taxes are taken from advance checks like they are when you’re employed, so you’ll probably want to be setting aside another 20% or so from each advance check to pay the IRS when the time comes

emoticon_surprisedVia Slashdot comes a link to an article in the Baltimore Sun focusing on unschooling because public school, private school and homeschooling just isn’t cutting it? Unschooling is the concept of learning from life, I guess:

A byproduct of home schooling, unschooling incorporates every facet of a child’s life into the education process, allowing a child to follow his passions and learn at his own pace, year-round. And it assumes that an outing at the park – or even hours spent playing a video game – can be just as valuable a teaching resource as Hooked on Phonics.

emoticon_smileMeljean Brook is reposting a couple “Storytime with Missy” posts from her archive. (Post 1, Post 2). Missy is Meljean’s inner child and a lover of category romances. I keep begging for Missy to come review some of her old faves for Dear Author.

MELJEAN: Rogue changed her clothes?
MISSY: Don’t ask me. Ask Echo and Jessica. They took the damn pictures.
MELJEAN: Why is she humping Jean’s dead body?
MISSY: I’ll kill you someday.

Marketplace has a nice article on romance sales. Women buy a lot of books and this is news.

emoticon_smileThis is not likely to happen at a romance writing conference but Dragon Con is apparently a place for romance:

As Dragon*Con concludes this week, some single attendees are finding themselves coupled with someone who understands their passion for science fiction and fantasy.

“I’ve never cared about football or any of the normal guy stuff,” said Olsen, a home health care director who enjoys obscure sci-fi television shows and elaborate costuming. “I met someone who shared my same geeky interests, and that’s hard to find.”

eyePaidContent and a number of other tech sites have posted drool worthy pictures of a two screen color ebook reader from Asus. Asus are leaders in the netbook technology, small, low priced laptops. Asus is now bringing its low pricing to the ereading world. A lower end device is slated for around $164 and the higher end, two screened device is also to have a low price point.

eyePo Bonson’s next parenting book is being crowd sourced, kind of. Chapters on various topics will be posted on Bonson’s site as well as the publisher’s site, Twelvebooks.com, and readers are invited to annotate and add their own content. Sharedbooks.com will gather the additional content and sell it for $2.95 as an ebook supplement to the print book. Interesting. I know I’ve used the Berkley Parents network hundreds of times as a new parent. Additionally, I always read the comments at Allrecipes.com because oftentimes there are tips and hints that make the original recipe better.

Jane Litte is the founder of Dear Author, a lawyer, and a lover of pencil skirts. She spends her downtime reading romances and writing about them. Her TBR pile is much larger than the one shown in the picture and not as pretty. You can reach Jane by email at jane @ dearauthor dot com

197 Comments

  1. S. W. Vaughn
    Sep 09, 2009 @ 13:05:49

    Uh…

    Whoa.

    I’m seriously speechless.

    Wha’ happened?!

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  2. rebyj
    Sep 09, 2009 @ 13:06:41

    This is such a shame. I was looking forward to the quality of authors they were attracting. Lots of positive buzz surrounded Quartet Press that I hate to hear this.

    Hope everyone involved continues on and finds success in their future ventures.

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  3. J L Wilson
    Sep 09, 2009 @ 13:08:42

    As you said: better they ‘close’ before they opened (really). Curious about why, but I suspect dribs & drabs will come out in the coming weeks….

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  4. Meljean
    Sep 09, 2009 @ 13:10:04

    :-(

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  5. Robin
    Sep 09, 2009 @ 13:14:46

    On the one hand, it makes sense to close the doors before the Press takes on rights and opens itself up to the paying public. On the other hand, it's like completely destroying my faith in digital publishing.

    Exactly. The talent, the knowledge, the experience, the intelligence, the class — it was all there in spades. This is a terrible, terrible shame. I’m as frustrated and disappointed as I was excited.

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  6. Maili
    Sep 09, 2009 @ 13:16:42

    Am still in shock. Agreed with what you said about better to do it before opening officially, but holy cat. Didn’t see it coming this soon.

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  7. MaryK
    Sep 09, 2009 @ 13:34:15

    Well, crap!!!

    I really hope they give reasons besides “it didn’t work out.”

    They seemed to be so well prepared and understand the business so well.

    After such a strong start, not to give an explanation for failure would seem like a betrayal to the hopeful and excited onlookers.

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  8. AnimeJune
    Sep 09, 2009 @ 13:38:05

    I myself am in shock. I kid you not, barely a week ago I applied to be a copy editor there. I’d just sent in a copyedited writing sample two days ago, hoping I’d be hired. It just seems so fast – one minute they’re hiring and the next … poof. I was really looking forward to the books they were going to put out. :(

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  9. Estara
    Sep 09, 2009 @ 13:47:11

    Wow, I wish all the best for Angela James, all my favourite Samhain books were edited by her.

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  10. Mina Kelly
    Sep 09, 2009 @ 13:54:36

    I’d say it looked too good to be true, but it never did: it looked just right. The crew had experience in the field and the weight to pull in good submissions right off the bat. There was a lot of positive buzz from prominent blogs. They knew what they were doing.

    You wonder what the hell went wrong, and how if they couldn’t do it how more amateur presses have managed. I really hope more info comes out about this.

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  11. Elyssa Papa
    Sep 09, 2009 @ 13:57:43

    I’m in absolute shock. :-(

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  12. Marcia Colette
    Sep 09, 2009 @ 14:00:52

    Whoa. I had to check my calendar to make sure we were past April Fool’s.

    But it’s like you said. At least they realized what they were getting into before actually moving forward and digging themselves into a deeper grave. I have to commend them for that. Nevertheless, it’s sad to see a possible powerhouse like them biting the dust. I wish everyone there all of the best.

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  13. Nonny
    Sep 09, 2009 @ 14:02:39

    I hope there is more reason given, too, especially as I know authors who already were contracted and have had their rights reverted as a result. I’d like to know what actually happened, but we probably never will.

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  14. SarahT
    Sep 09, 2009 @ 14:07:59

    What Nonny said.

    Would love to know what really went down but I suspect we’ll be treated to a watered-down version of the truth.

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  15. KeriM
    Sep 09, 2009 @ 14:08:02

    Well then what was with the interview on Aug. 5th given here at DA, by these guys? Did they not know then that a little over 30 days later they were going to be closing their doors. Sounds like something is just not right in the head on this one. Makes no sense.

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  16. katiebabs
    Sep 09, 2009 @ 14:25:32

    Color me shocked because all the people involved seemed to be professionals and had their stuff together. :(

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  17. Srsly...
    Sep 09, 2009 @ 14:26:45

    A shame…

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  18. Anion
    Sep 09, 2009 @ 14:28:51

    I’m concerned about Angie James and hope she lands on her feet–I’m sure she will.

    But I’m confused, Jane, about why this destroys your faith in digital publishing? While I looked forward to Quartet’s opening and certainly wished them well and hoped they were successful, they were still a start-up epublisher (albeit with much more experience; a better bet than others) and as such anything can and could happen. This just confirms the axiom that it’s better to wait a while to submit to a new epublisher (or any new publisher, for that matter), because even the best-laid plans can go awry. That’s been the way of things for years; it’s advice you yourself have given here.

    Look at it this way, writers. If a house with this much experience, talent, and publicity can fold, what makes you think (I’ll make up a name) Happy Unicorn Press, started by someone with no experience, is going to succeed?

    I certainly don’t mean to sound disrespectful to anyone involved with Quartet. I am genuinely saddened by this news. I wish everyone involved the best. But I had to mention it.

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  19. Robin
    Sep 09, 2009 @ 14:30:37

    I'd say it looked too good to be true, but it never did: it looked just right. The crew had experience in the field and the weight to pull in good submissions right off the bat. There was a lot of positive buzz from prominent blogs. They knew what they were doing.

    I agree. Some of us took heat when we expressed our excitement over QP’s formation, but I don’t regret a second of it. Just within the Romance community, Kassia and Angie have proven themselves consummate professionals, as well as experienced and knowledgeable digital publishing advocates. Whatever went wrong, it is no reflection on the immense talent the QP group represents.

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  20. Robin
    Sep 09, 2009 @ 14:34:50

    @Anion: NOT speaking for Jane, but this

    If a house with this much experience, talent, and publicity can fold, what makes you think (I'll make up a name) Happy Unicorn Press, started by someone with no experience, is going to succeed?

    could, I think, serve as partial answer to your question here:

    But I'm confused, Jane, about why this destroys your faith in digital publishing?

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  21. Nadia
    Sep 09, 2009 @ 14:46:36

    @Robin: I’m not sure if I follow your logic. Do you mean to say that Jane expected digital publishing to be so easy that no expertise or experience is required?

    I’m sad to see QP fold. But at the same time I’m glad it terminated rights acquired, etc. We really don’t need another drama over anything like that.

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  22. Gayle
    Sep 09, 2009 @ 14:50:41

    There are several very strong electronic publishers who are just going to keep getting stronger with time (Samhain, Loose ID, Liquid Silver, Ellora’s Cave, etc.), so this doesn’t shake my faith in the industry at all. It just makes me respect even more those who have made it work, and work so very well. Also, until we know for certain what happened to QP (and we may never know the whole story), we probably shouldn’t paint the entire electronic publishing industry with one broad brush. The closing of QP may have had nothing to do with the vicissitudes of publishing, but rather with personal reasons that would have affected any venture. I’m sure those involved will go on to other successes.

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  23. Jane
    Sep 09, 2009 @ 14:51:15

    @Nadia I’m not sure how this was extrapolated. I never thought DP was easy that no expertise or experience was required. In fact, I believe it to be quite the opposite. I thought that given the team that was assembled that it would be exciting to see where QP was going to go. Having this sort of experience in publishing and business not be able to open its doors makes me wonder about the future of DP. Clearly its a field of growth but seeing a number of individuals with really stellar reputations fail to make a go of it makes it discouraging as a fan and proponent of digital publishing.

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  24. RStewie
    Sep 09, 2009 @ 15:19:33

    I’m with Jane on this one. I am sad and my faith in digital publishing has taken a hit. This says to me that DP is past the stage that a dedicated group can form a new start-up and make it work. That entry into the market has become difficult enough that even this talented group of people, experienced and familiar with the industry, can’t do it.

    Does that mean that the e-Pubs that are out there and established are the only ones we’ve got, until a large house decides to invest in the market? QP shouldn’t have folded, based on their experience and the huge positive reception they got from the community. That they did fold tells me that either 1) there was something internally going down we don’t know about or 2) that the market for e-Pubbing has become too complicated for a small start-up to navigate.

    On another note, I too would LOVE Missy reviews of any and all books out there. Can she start with Nalini Singh’s Psy-Changelings series…it’s not category, but that would be way cool.

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  25. K. Z. Snow
    Sep 09, 2009 @ 15:50:49

    I really hope they give reasons besides “it didn't work out.”

    That would be a boon to e-pubs everywhere, especially the start-ups. “Beware the following pitfalls; they can turn up regardless of your best-laid plans” would be an invaluable lesson.

    This saddens me. With high hopes, I recently submitted a work to them.

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  26. DS
    Sep 09, 2009 @ 16:09:12

    Love Asus- but I think I’ve said that before. I don’t like to read books on my netbook, but Asus makes reasonably priced and stylish hardware and I can see myself buying the two screen version to add to my gadget collection.

    Reading the information about how advances are paid made me cringe. I was in my mid 40′s when we set up the business and one of our concerns was to make sure that everything was covered before we paid ourself the first penny. That meant Workers’ Compensation, key person insurance, Social Security Taxes– so many payments that added up to a substantial chunk of our income. 20% for taxes doesn’t seem nearly enough to set back if someone wants to quit their day job and still be covered in the case of most eventualities.

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  27. Christine M.
    Sep 09, 2009 @ 16:12:42

    Will Asus’ ebook reader use eInk technology? Because honestly? If this ends up ‘just’ being a very small netbook without a keyboard, then no thanks. I’m not interested. If it’s cheap AND it uses eInk technology then I’ll probably be sold. Knowing that, I’ll also wait before getting my hands on the new Sony readers.

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  28. Robin
    Sep 09, 2009 @ 16:26:10

    @Nadia:

    Do you mean to say that Jane expected digital publishing to be so easy that no expertise or experience is required?

    I wasn’t answering for Jane, but in any case, I meant the opposite — that it’s so difficult that people should only undertake it with knowledge, experience, and willingness to work like a dog, and even still it may not work out.

    This is a bit of a digression, but seeing a variety of reactions to QP around and about, I was and still am puzzled by the idea that we shouldn’t be excited when people we respect undertake a new enterprise. It seems to me that’s how it should be — that, especially with the issues in epub quality of which we’re all aware — people who have intelligence and knowledge in the area of digital publishing should be encouraged to go forward and build a new business. If we want the bar to be raised, IMO we need to be supportive of those who have the kind of qualifications that make us think they will/can succeed. In fact, this whole thing reminds me that I need to make an effort to buy and review more Drollerie Press books, because they’re another small epub that’s producing quality work, and I don’t want them going down while we’re all too distracted by the scandal-ridden train wrecks.

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  29. Tatiana Caldwell
    Sep 09, 2009 @ 16:32:16

    I am very surprised and sad to hear about Quartet! I would really like to know what happened.

    More importantly, I hope Angela James is doing okay…

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  30. ms bookjunkie
    Sep 09, 2009 @ 16:48:48

    I’m reeling and can’t take it in… I’m so disappointed! And I’m furious for Angie James!

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  31. Anion
    Sep 09, 2009 @ 16:54:26

    @Robin:

    I see your point. :-)

    But I still think that, while it’s distressing news, and while it’s distressing that it’s shaken people’s faith, it’s just the way the cookie crumbles. Digital publishing is no more or less risky than it was yesterday; we’ve all been aware for some time that it’s risky and we’ll continue to be so.

    I wasn’t trying to imply that it’s silly or wrong to have your faith shaken (or to have had faith in the first place) and I hope my question didn’t come off that way. I was genuinely curious.

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  32. Melissa Blue
    Sep 09, 2009 @ 16:59:58

    Here’s the thing, people who didn’t have any faith for DP in the first place will only point to this and say “see”. They would do it anyway for the simple fact this publisher had a lot of publicity. Most of these people are not looking for evidence to the contrary i.e. support for DP. They never will. Don’t waste your breath.

    I can understand why Jane has lost a little faith, but I think I’m more disappointed. This business had promise, yes. This business seemed to have the clout, but this industry has no rhyme or reason. RR’s doors are still open even with being slapped with the label of producing “shoddy quality.” I can go on with a list of not so good pubs that still have their doors open.

    It makes no sense. It isn’t logical. No matter how good your business plan can be, it’s still somewhat up to the hands of fate. Not saying that it doesn’t suck. But like anything in this industry it’s a gamble, one that didn’t pay off. I just hope everyone involved can get something out of all the support they are getting. Also, I wish them the best in their next venture whatever they decide it’s going to be.

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  33. roslynholcomb
    Sep 09, 2009 @ 17:28:43

    Doing a start-up business of any type is always fraught with difficulty. I would imagine that doing it in publishing is doubly difficult and when you factor in the recession and tight credit it would become an Aegean stables type task. All the players in this have a firm reputation and presumably will be able to regroup fairly easily, at least I hope so.

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  34. DS
    Sep 09, 2009 @ 17:29:56

    @Christine M.: I don’t think color eink is ready for prime time although it has been promised since 2005. Ever so often an article appears promising color eink, but nothing definite.

    I’ve been very pleased with everything I have bought from Asus. Alas, no one has ever accused me of having good sense when it comes to the amount of electronic gadgets I buy.

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  35. JLFerg
    Sep 09, 2009 @ 17:47:50

    Here is a link to the Publisher’s Weekly story on why Quartet Press closed, with comments from Kat Meyer.

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  36. Ciar Cullen
    Sep 09, 2009 @ 18:02:59

    I’m really hating a blog I wrote a few days ago about crunching the numbers after reading that PW story. I really came to like Don Linn so much just via some silly Tweets and stuff, and I’d like to see what he does next. I miss you, Don. Come back and argue baseball with me.

    Best of luck to all affected. I’m glad they did the math before it affected too many other people.

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  37. Courtney Milan
    Sep 09, 2009 @ 18:55:49

    In news not related to Quartet Press’s closing, 20% is way too low a number to set aside for taxes from your advance check.

    You’re paying self-employment tax: 15.3%. And state income tax: 3% On top of that you must pay federal income tax, which is generally greater than 1.7%.

    Now, you won’t be paying taxes on your entire advance because you’ll have business expenditures. But if you’re profiting enough out of an advance to consider being able to live on the proceeds, you had damn well better be setting aside more than 20% for taxes.

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  38. Julia Sullivan
    Sep 09, 2009 @ 19:12:11

    Wow. Um.

    As others have said, yeah, better never to open than to close and leave people hanging. But it is unsettling that experienced folks working together with tremendous goodwill behind them couldn’t make a go of it.

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  39. Courtney Milan
    Sep 09, 2009 @ 19:13:12

    Okay, I take it back. If your expenditures are a relatively large percent of a advance check, 20% might actually not be a horrible percentage to set aside.

    I guess I was assuming much higher #s for the advance check, on the theory that without backlist sales in place, it would freak me out to quit a job with no prospect of future income after that first year.

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  40. PT
    Sep 09, 2009 @ 19:38:21

    Well I am not disallusioned in digital publishing by this. I still enjoy and read many ebook publishers authors. I am disallusioned by all the PR hype and Management team that was behind it. It was fairly obvious, even before the PW story, that Quartet closing before the first book release had to be about funding, or lack of it. Credit is tight and high interest rates on venture capital has to be an issue for any startup these days. But I would point to successful small electronic romance publishers who have started, built a following and are still going strong and I’d say digital publishing enjoys a share of the market. These epublishers do not pay advances and manage to pay monthly royalties as stated on their websites, and make it profitable! So maybe Quartet’s principals don’t understand the biz as well as the hype implied. I am positive there are many ways to start a biz that don’t require such a high initial outlay of funds. I’ve done it. Maybe this team will get a more realistic biz plan together and start again another time. If so I hope they wait to do their marketing until closer to the actual opening.

    My anger and disallusionment is that any new venture, especially by seemingly well liked principals, would recruit and hire staff before they were 1050% sure that they were, in reality, in business and able to support that staff and services. Good intentions aside, that is not cool. And you know what they say about good intentions.

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  41. Courtney Milan
    Sep 09, 2009 @ 19:45:34

    Re: Quartet Press

    I agree with everyone that it’s better to cut losses early, etc. The part that bothers me about this is that I had heard representations from Quartet Press principals, on more than one occasion, that one thing that set Quartet Press apart was that the capital was there to finance the venture, period.

    It’s a little disheartening to hear that was not the case, and it makes me believe that there is something else at issue here than what we’ve been told. That’s just my theory, unsupported by evidence, but this is really sad.

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  42. Oh Em Gee
    Sep 09, 2009 @ 20:31:21

    I do not understand all the extreme concern over Angela James’ welfare. As I said over on Karen’s blog, she made a choice, took a risk, and now she’s dealing with the pitfalls of that choice.

    Instead, I feel sorry for the authors who invested their time and talent, have had their work tied up for who knows how long, and won’t ever see a dime from it.

    Perhaps this time people will finally learn that when a start up proclaims to be the new voice of epublishing, it’s best to use caution. I’ve yet to see that work out well. And for all the bashing Ravenous Romance gets, hey, at least they managed to open.

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  43. Jane
    Sep 09, 2009 @ 20:45:02

    @Oh Em Gee: what are you talking about? no authors have had anything negative happen to them. Their rights reverted and they are free to sell their works at other pubs.

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  44. Janet W
    Sep 09, 2009 @ 20:57:27

    How can it not be a blow to an author to think she/he has a publishing contract and then it goes up in smoke? That’s not a negative? The same way a number of people have said just last week they were applying for copy-editing positions at Quartet … it’s always difficult to think you’re on track to A and then suddenly the earth shifts beneath you and willy-nilly, you’re on track B. Yes, as you said, “their rights reverted and they are free to sell their works at other pubs” … like that’s easy? Like they might not have been thrilled to be chosen to be published at Quartet?

    Like probably everyone else in the universe, I’ve been fired … I’ve seen ventures I was 100%+ invested in go belly-up and it’s bloody hard. I am sorry for the authors … I think that’s a valid point: how long were they invested in this venture and how much time have they lost? Which is not at all to say that I don’t hope the talented Ms. James lands on her feet.

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  45. Jane
    Sep 09, 2009 @ 21:01:25

    @Janet W: Authors might be disappointed but beyond their feelings, their careers are in no way impacted in this. If their work is good enough, they’ll sell their work somewhere else.

    What have authors invested in this venture? They invest in their work. I have not seen an author lose any money in this. Have you?

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  46. Lynne Simpson
    Sep 09, 2009 @ 21:09:11

    @Jane: I seriously doubt any of the authors who submitted material or signed contracts with QP lost actual money, but they did lose time, which isn’t something I would take lightly. Having a manuscript on exclusive submission or under contract means you’re not shopping it elsewhere.

    Yeah, it’s great that they were quick to revert rights, but that still doesn’t make up for the authors’ lost time. I’d be pretty ticked if I were one of them.

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  47. Jane
    Sep 09, 2009 @ 21:09:44

    @Janet W: I am sorry, I don’t mean to be harsh there. I know that there are authors who are disappointed.

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  48. Janet W
    Sep 09, 2009 @ 21:11:01

    No Jane I haven’t … I was describing “feelings” of commitment to something over time — “if” I was a writer, which I am not, and had I been signed by a publishing house, I would cross that off my list of things I had to do: a) get signed by a publishing house.

    Now they have to start again. Of course, cream rises to the surface but just because they haven’t invested money with Quartet, they have invested their career aspirations and you would know better than I whether their careers were negatively impacted. At the very least, don’t they have to pick themselves up and start again? To find a new publishing house?

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  49. Anon Y Mouse
    Sep 09, 2009 @ 21:13:52

    I have not seen an author lose any money in this. Have you?

    no authors have had anything negative happen to them.

    You didn’t say ‘no author has lost any money’, you said they’d had nothing negative happen to them. Monetary is just a small part of it. Those authors, however foolish I think they are for having submitted at all, have most certainly had something negative happen to them. By having the rug pulled out from under them after thinking they had a publishing contract, announcing it online, to friends, family and other authors, only to find out they, in fact, did not.

    It might just be an emotional blow, but to say it’s not negative is unfeeling.

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  50. Jane
    Sep 09, 2009 @ 21:16:44

    @Anon Y Mouse: I don’t see this being a big change for authors and if that is unfeeling, it’s unfeeling because if it is quality work, it will get sold again.

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  51. Maili
    Sep 09, 2009 @ 21:22:44

    @Janet W
    I had an impression that the majority of working authors (and non-fiction writers) don’t rest with just one publishing house.

    And that seeing something go down unexpectedly – including having a working book series cancelled half-way – is part of the publishing life for many authors.

    It still doesn’t change the fact that, as you noted, it’s disappointing for authors involved in this one, though. I’m reasonably sure that since QP saw fit to contract them, they should be able to get contracts elsewhere easily enough. :)

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  52. Tatiana Caldwell
    Sep 09, 2009 @ 21:34:48

    I do not understand all the extreme concern over Angela James' welfare. As I said over on Karen's blog, she made a choice, took a risk, and now she's dealing with the pitfalls of that choice.

    @Oh Em Gee; Then by this logic, why feel sorry for the authors? They too made a choice, took a risk and are now dealing with that choice.

    I’m not saying this at all to suggest that the writers haven’t suffered – I believe they have, just as all others involved or who attempted to involve their careers with Quartet Press. I guess I don’t see the point in trying to say that some suffered “more” or “less” than others; this is disappointing all around. As for why some, like myself, may have expressed concern over Angela’s welfare is simply because we are familiar with her name and work.

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  53. Karen Templeton
    Sep 09, 2009 @ 21:35:28

    Re-selling a project, no matter how good it is, isn’t that easy, believe me. Publishing houses and editors all have individual criteria for “good,” let alone “marketable.” Landing a contract for a work with one publisher is by no means a guarantee it will sell elsewhere. While having a contract yanked can happen to anyone, at any house, at any time, it always sucks. Always.

    So, yeah, this is a blow to those contracted authors. It may be a part of the biz, but it’s the rare author who can simply shrug off a lost contract. A broken promise hurts, no matter what the reason is behind it.

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  54. Jane
    Sep 09, 2009 @ 21:38:32

    @Karen Templeton Fair enough.

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  55. GrowlyCub
    Sep 09, 2009 @ 21:40:33

    Jane, I know you are friends with the folks behind QP, but while I understand your knee-jerk reaction, I think at this point in time it would be better to stop being defensive on their behalf.

    They screwed up. Big time.

    Yes, there were only a handful of authors affected; yes, these authors got their rights back, but as was pointed out before, as long as the books were with QP, they were not in the pipeline elsewhere, so there’s definitely a negative here and also loss of money, or at least delay in moneys coming to them.

    I feel for you, because you really went all out in support of QP, but defending them now by claiming nothing bad happened is not doing them any favors and feels pretty darn dismissive of the authors and others involved.

    QP is an example of how not to go about opening a start-up in a new industry.

    I, like many others, felt the all out publicity effort was premature and produced hype that could not possibly be justified. I understand the enthusiasm for a new venture, especially one that looked like it would really address romance reader demands and wishes, but I was vaguely repelled by the PR blitz itself because at the time there was just nothing there to justify the hype.

    And now we are told the financial plan was flawed, when the PR blitz hyped QP as four folks who *knew* their stuff. That’s just plain embarrassing. Saying ‘no harm no foul’ just doesn’t make this situation any better.

    ReplyReply

  56. Jane
    Sep 09, 2009 @ 21:43:58

    @GrowlyCub: Thanks for your advice but if you think I’m defending QP, you’ve misread anything I’ve said.

    ReplyReply

  57. Anon Y Mouse
    Sep 09, 2009 @ 21:53:03

    @Jane:

    I wouldn’t say you’re defending them, but there is a definite tone of dismissiveness, the impression of “Oh well, things happen, suck it up.” I agree the authors affected will probably be fine and resell their work eventually, but as a ‘supporter’ of ebooks, epublishing and, by association, ebook authors, it’s fairly trivializing to simply act as though QP closing like they did after all the hype isn’t a blow to those authors. It’s no different than, say, being hired for a job and then the day before you’re meant to start working, finding out the company has shut down.

    There’s time lost (which is money), and emotions bruised and ego takes a hit. That matters, and it’s unkind to act as if it doesn’t.

    ReplyReply

  58. whey
    Sep 09, 2009 @ 21:59:43

    Does this mean Angela James is available again to potentially be my Life-Editor-in-Chief?

    ReplyReply

  59. Jane
    Sep 09, 2009 @ 22:00:43

    @Anon Y Mouse: dismissive, unkind, unfeeling… Got anything else for me?

    ReplyReply

  60. Oh Em Gee
    Sep 09, 2009 @ 22:10:04

    I wouldn't say you're defending them, but there is a definite tone of dismissiveness, the impression of “Oh well, things happen, suck it up.” I agree the authors affected will probably be fine and resell their work eventually, but as a 'supporter' of ebooks, epublishing and, by association, ebook authors, it's fairly trivializing to simply act as though QP closing like they did after all the hype isn't a blow to those authors. It's no different than, say, being hired for a job and then the day before you're meant to start working, finding out the company has shut down.

    There's time lost (which is money), and emotions bruised and ego takes a hit. That matters, and it's unkind to act as if it doesn't.

    Yeah, that. And what Growlycub, and Karen said, too. You’re right, they haven’t lost any money in the most literal sense, and yes, if the work is good it will find another home. And I mean no offense, but it does seem to me as if you are being at least a bit defensive, perhaps on your own behalf, because you were so vocally supportive of QP, and that’s fine; you have every right to support whomever you want.

    I do find it curious that the owners chose to throw in the towel now, with the launch date set for later this very month. How is it that they’re just now discovering the impossibility of their financial plan? Shouldn’t there at least have been hints prior to today? I’m not trying to be a conspiracy theorist, though I can’t help but wonder if there isn’t something else going on besides mere monetary woes.

    Just my humble $0.02 (or perhaps $0.03).

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  61. Tweets that mention Wednesday Midday Links: Quartet Press Closes | Dear Author: Romance Novel Reviews, Industry News, and Commentary -- Topsy.com
    Sep 09, 2009 @ 22:15:23

    [...] This post was mentioned on Twitter by Maili, Heather Grove, Rachel Jameson, dearauthor and others. Maili said: RT @dearauthor New post: Wednesday Midday Links: Quartet Press Closes http://bit.ly/GBqWw [...]

  62. Carolina Girl
    Sep 09, 2009 @ 22:28:31

    @Jane:

    Maybe you’re getting exactly what you deserve?

    ReplyReply

  63. whey
    Sep 09, 2009 @ 22:44:38

    @Carolina Girl:
    Wow. Petty and nasty much?

    ReplyReply

  64. Robin
    Sep 09, 2009 @ 22:45:22

    @Melissa Blue: Yes to pretty much everything you said.

    ReplyReply

  65. Jane
    Sep 09, 2009 @ 22:48:54

    @Carolina Girl: I’m not sure I understand your comment.

    ReplyReply

  66. Nadia
    Sep 09, 2009 @ 22:52:06

    @Robin & @Jane

    I’m just confused because of the disappointment expressed over the state of digital publishing.

    Any venture is hard. I feel that one failure does not make the entire industry’s future dim.

    ReplyReply

  67. Jane
    Sep 09, 2009 @ 23:01:46

    @Nadia: MY feeling is this because I won’t speak for Robin. Kassia, Kirk and Angie are people I have known for sometime. Kassia has been part of the romance world forever. Angie is, obviously, very knowledgeable about digital publishing. Together I thought that they would make a great team. Kat and Don Linn rounded out the group, bringing a lot of experience and money to the table.

    While I appreciate that they want to put out a quality product or nothing at all, it seems that the nothing at all message that is sent says that quality publishing in digital market is too expensive? too hard? This isn’t to say that there aren’t a few digital publishers out there that aren’t putting out quality, but having seen a number of books from various epublishers that we get as submissions for review, I can say that the mass quality of epubbed books are published poorly. This doesn’t mean that the writing is always bad because publishing encompasses the packaging and marketing of the book as well. Covers are often awful and the websites of some of these epublishers are cringe inducing.

    I was definitely hoping that QP would raise the level of quality in digital publishing. If the money isn’t there to make this kind of venture a success then it is very disappointing to me. Further, there are a lot of skeptics about digital publishing out there (read RWA) and the lack of QP in making it even out of the gate simply confirms to those skeptics that digital publishing is a fly by night, not worthy of their time and effort, sort of thing.

    As a proponent of digital publishing, it’s super hard to argue to these skeptics that digital publishing is legitimate.

    Deirdre Knight’s publishing with Samhain elevated DP in a lot of traditional publishing eyes. Yes, one author, one act did that. I was hoping that QP would further convince skeptics of the validity of the DP business model. I still believe in it, but it’s far harder to support it.

    It’s like I totally supported the RWA Change movement, but when they came so ill prepared to the annual meeting, it cemented in the minds of those opposed and those wavering that DP wasn’t full of professionals.

    DP is like on the cusp of mainstream acceptability and any missteps pushes it farther back. Frankly, it’s disheartening to see publishers like Ravenous Romance who puts so little stock in quality, who call themselves porn peddlers, still churning out books every month and becoming a spokesperson for digital publishing in romance.

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  68. Robin
    Sep 09, 2009 @ 23:03:47

    @Nadia:

    I feel that one failure does not make the entire industry's future dim.

    Of course not. It’s just one of those moments where I think about the difference between, say, bragging about publishing porn and calling it Romance, and aiming to publish the best Romance you can out of respect for the genre. And it makes this particular failure feel more significant than it might otherwise (and in the large scheme of things) seem.

    ReplyReply

  69. Mora
    Sep 09, 2009 @ 23:11:19

    I do not understand all the extreme concern over Angela James' welfare. As I said over on Karen's blog, she made a choice, took a risk, and now she's dealing with the pitfalls of that choice.

    As someone pointed out, the very same thing can be said of the authors–they made a choice to submit to QP, they took a risk and now they’re dealing with the pitfalls of that choice.

    Angela James made a choice, sure. I don’t see why that means people shouldn’t feel sympathy for her. There’s a certain schadenfreude to comments like this that makes me wonder.

    For my part, I don’t know Ms. James from Adam (Eve?). But I feel for anyone, especially a young mother in this economy, who has had the rug pulled out from under her. The fact that she chose to stand on the rug doesn’t mean she deserved for something like that to happen.

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  70. Robin
    Sep 09, 2009 @ 23:12:13

    @Jane: I know you weren’t speaking for me, but that was very well said and I feel very much the same way. I know that DP will not be made or broken on the back of QP, but it does feel like everything counts right now, and that when it counts against what we know DP can and should be (and, in some cases, already is), it exponentially multiplies.

    ReplyReply

  71. Nadia
    Sep 10, 2009 @ 01:14:06

    @Jane: Thanks for clarifying your position & thoughts. I see what you’re saying. I’m not involved with the RWA Change and other initiatives at this time, so I had no idea that they weren’t very well-organized. (I also didn’t go to RWA in DC this year.)

    ReplyReply

  72. library addict
    Sep 10, 2009 @ 01:19:31

    I think the concern for Angie is because we know her name and that she left a stable job at a company she helped build up and is now unemployed. Yes, it was her choice, but that doesn't mean those of us unconnected to the venture and who only “know” her from on-line can't feel bad for her in this situation.

    I feel for the authors, too, but I have no idea who they are as, to my knowledge, QP hadn't announced their launch lineup.

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  73. kirsten saell
    Sep 10, 2009 @ 01:27:09

    I agree with both Jane and Robin, on what a blow this is to epublishing if nothing else. The fact that a group of respected, upright individuals, some with a ton of experience, couldn’t make a go of it makes the digital publishing model look questionable.

    It’s one thing for proponents to have to admit that low start-up costs and overhead make it easy for scumbags or the ignorant to open epresses, screw over authors and then disappear. That makes it no different than, say, literary agencies–you do your research or risk getting the shaft.

    It’s quite another thing to have professionals try to do it right and still fail at the get-go. Now, skeptics can claim not only that digital publishing is risky for authors but that the model itself is inherently flawed. See? Even when it’s done right, it doesn’t work.

    I don’t know if I feel sorry for Angela James. But if I were her, I’d be pissed as all hell.

    And please, can we stop using DP as the acronym for epublishing? Because all I think of when I look at it is double penetration.

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  74. Imogen Howson
    Sep 10, 2009 @ 01:58:23

    This is very sad news. I was sad when Angie James left Samhain, cos she was my immediate boss and editor and she’s great to work with, but I was excited by the idea of QP, and really interested in what they were planning. And it’s always nice to have a pool of quality epublishers to choose from when you’re submitting work.

    On a mostly unrelated note, though, being a Drollerie Press author, I was happy to see this from Robin:

    I need to make an effort to buy and review more Drollerie Press books, because they're another small epub that's producing quality work, and I don't want them going down while we're all too distracted by the scandal-ridden train wrecks

    Immi

    ReplyReply

  75. SarahT
    Sep 10, 2009 @ 02:20:19

    Why are so many assuming Quartet Press are blame-free in all of this on the basis that they are professionals, experts, active in Blogland, personally known to people, etc.? Sorry to be so blunt but they obviously fucked up royally. SB Sarah had it right when she referred to their “unbelievably treacly announcement”.

    I also resented the part in the Publishers Weekly article where Kat Meyer says:

    “what is amazing is that the bookish community are being so kind and understanding about our failure.”

    How can she say that when the announcement had just been made? There wasn’t enough time to gauge the general reaction at that point.

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  76. Mora
    Sep 10, 2009 @ 03:07:24

    I agree with both Jane and Robin, on what a blow this is to epublishing if nothing else. The fact that a group of respected, upright individuals, some with a ton of experience, couldn't make a go of it makes the digital publishing model look questionable.

    Respected or not, they made some questionable decisions. The foremost being the publicity blitz they went on before hammering out the details of how they’d run their company. I’m sorry to sound harsh, but from that PW article, the people behind Quartet come off sounding very fly-by-night and unprofessional.

    For me, that doesn’t reflect on epublishing at all. It merely reflects on the poor business decisions made by one company.

    ReplyReply

  77. ginger
    Sep 10, 2009 @ 05:14:36

    I didn’t know that about RWA Change, I had wondered why it had all gone quiet. but to be honest I’m not that surprised.

    I don’t think that QP reflects on epublishing, it more reflects on those involved who obviously for all their experience (although none of them had any epub experience or commercial fiction as far as I could see) didn’t put together a good business plan. I’m sorry for the authors that got caught up in this but I don’t know that I have that much sympathy for Angela James. Yes it’s sad but she made her decision and she’s going to have to live with it. She’ll probably pick up a new job much easier than those authors who are looking for a new pub.

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  78. Ana Thierry
    Sep 10, 2009 @ 05:48:22

    I understand why people were excited about QP opening – they gave good media, they said all the right things but…that doesn’t mean they knew how to start up and run a business. I grew up in a family of fisherman and I can talk about fishing, the practical and business end, but I wouldn’t go out, buy a boat and hire people then figure out I couldn’t do it.

    What I find bizarre is when Don Linn threw his name into the ring, he didn’t look at the financials more closely? This is a man with many years experience in publishing yet he overlooks the most fundamental building block of business – can you make money?!?

    Whatever the eventual fallout from this is – they’ve tarnished their reputations and this kind of black eye is hard to come back from.

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  79. Jane
    Sep 10, 2009 @ 06:23:18

    @gingerI hope you are right, Ginger, but in this economy with people getting laid off right and left from the publishing industry, I’m not as optimistic.

    ReplyReply

  80. Jane
    Sep 10, 2009 @ 06:26:29

    @Mora QP certainly don’t sound professional in the article quotes, do they? The problem is not with readers of ebooks or those in the DP industry, but the outsiders. They look at the credentials of the others and figure that QP must know that digital publishing isn’t a good risk or something. It’s just bad optics. I don’t believe that digital publishing isn’t a good risk. I think that there is growth here, particularly for a company committed to quality, and I do hope that more people think like you and others that commented and that this doesn’t reflect poorly on digital publishing as a whole.

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  81. Jane
    Sep 10, 2009 @ 06:28:35

    @SarahT I don’t understand where you get the impression that people are assuming QP is blame free? If you are suggesting that I believe that or have asserted that, I’d like for you to point out the statements so that I may clarify them for you. It’s obvious that QP is not blame free. It’s absolutely not normal for something like this to happen. In fact, it’s so abnormal and so wrong that it hardly seems a point that needs to be made. Isn’t it fairly assumed?

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  82. Jane
    Sep 10, 2009 @ 06:30:36

    @Ana Thierry I would disagree that these people didn’t know how to run a business but the suggestion that after they put out the call for editors, after they hired an exec editor, that that was when the financials didn’t work? Yes, that’s wholly disturbing.

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  83. SarahT
    Sep 10, 2009 @ 06:42:29

    @Jane Sorry if I offended you. I wasn’t referring to anything specific which you or anyone else said. I’m surprised at the general sense of disappointment instead of the outrage I would have expected at this announcement. But maybe I’m reading this wrong and people are outraged.

    Kat Meyer’s quote from the Publishers Weekly article got my goat, though. Definitely wishful thinking on her part as she could not have had much feedback from the online community at the point at which the article went live.

    ReplyReply

  84. Jane
    Sep 10, 2009 @ 06:45:10

    @SarahTYou didn’t offend me but if there were statements of mine from which you drew your conclusions, then I wanted to clarify them.

    ReplyReply

  85. Anon
    Sep 10, 2009 @ 06:55:17

    Is it possible that the financials didn’t work because they had too many “high profile” names in management? How did they expect those salaries to play out?

    ReplyReply

  86. SarahT
    Sep 10, 2009 @ 06:55:44

    @Jane No, just a general sense I was getting that people were more disappointed than outraged, which surprised me.

    As a reader of primarily print books, I’ve never had more than a detached interest in QP, so my comments might have seemed flippant to those who knew more about QP and cared more about the success of their venture.

    Speaking as someone who is a reluctant print reader, and would love to be converted to digital, stuff like this does not help to win me over. I think that’s the real pity in this incident. It reflects badly on epublishing as a whole.

    ReplyReply

  87. Christine M.
    Sep 10, 2009 @ 07:12:25

    @DS: I’m not looking for a coloured eInk, I was just thinking of the ‘basic’ version (with one screen) for which there have been no pictures and no info. I was merely wondering if its one screen will be eInk or not. I really don’t care about colour, I mean, the novels I read *are* in black and white.

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  88. Ana Thierry
    Sep 10, 2009 @ 07:22:47

    @Jane: The lack of foresight on the behalf of the company heads proves they know little about starting a business. Its a whole different scenario if you are running an existing biz because it has a track record and the assumption is you are already covering your your salaries and making a profit or have a plan in place to do so.

    In this case they put the cart ahead of the horse by starting up without a clear financial foundation. Would you go to the grocery store to stock up and only have a vague idea of how to pay for it? Not to mention the wear and tear on your car to get there, gasoline, maintenance etc.

    Working on the assumption based upon the Publisher’s Weekly article & interview from Meyers: they didn’t have a working knowledge of the epub business model esp. when it pertains to 3rd party sellers and distribuion. It’s standard in the biz to fork over 55% of the cover price. If you want other to sell your widget then you need to pay them to do so.

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  89. Laura Vivanco
    Sep 10, 2009 @ 07:27:36

    @SarahT: Re

    just a general sense I was getting that people were more disappointed than outraged, which surprised me.

    have you seen Smart Bitch Sarah’s post about this? She’s expressing quite a lot of outrage. In fact, she was so outraged that I suspect her language was responsible for this comment ending up in the moderation queue, so I’ve edited out the direct quote to see if it gets past the filter.

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  90. Aoife
    Sep 10, 2009 @ 07:38:32

    I’m mildly disappointed by the news about Quartet Press, but not terribly surprised. This is a terrible time to be starting a new business, even if you have experience, financial backing, etc. I don’t think this news means much in terms of the professionalism or experience of Don Linn et. al., because these economic times are not normal ones, and we’ve all seen companies that should have been doing well tank. I don’t know why e-publishing would be immune to that.

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  91. Karen Templeton
    Sep 10, 2009 @ 07:44:50

    I have to say — and since I don’t know any of the details I’m being hugely presumptuous — that I find the lack of financial projection a bit mind-boggling. One of the major components of a business plan, which a start-up is supposed to have in place well before it actually goes into business (hiring people, etc.), is to project how/where/when your money’s coming from. That includes a thorough study of the existing market, if there is one, extrapolating from that information how your venture will sustain itself, when it will become profitable, etc. Sure, there are unpredictable variables in there, but the impression given from the PW quote is that, had Quartet properly done their homework, they would/should have seen far earlier that their financial model wasn’t going to work.

    But again, I’m basing this on a single quote and air, basically. If there’s more to it than that, or even if there isn’t, ideally it would be great if the principals were forthcoming, sharing their experience as a cautionary tale to others.

    Not that they’re in any way obligated to do such a thing. I’m sure they’re stinging pretty badly today, too. It would just be nice.

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  92. roslynholcomb
    Sep 10, 2009 @ 08:07:41

    Is it possible that the financials didn't work because they had too many “high profile” names in management? How did they expect those salaries to play out?

    I would hope that they all knew enough about start-ups to realize that there would be quite a while before any of the principles started making a salary. At least that’s been my experience. I know people who’ve started small companies who went 3-5 years without being able to pay themselves anything, or at best a pittance. A friend of mine said that for the first three years she was actually making less than her hourly employees.

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  93. Anon
    Sep 10, 2009 @ 08:26:35

    “I would hope that they all knew enough about start-ups to realize that there would be quite a while before any of the principles started making a salary.”

    At the first QP announcement, it made me nervous to have so much management involved, even as wished the best for all involved with QP. Then they continued to add people with relatively high-profiles. To say they understood the business model of digital publishing while having such a top heavy company did make me wonder. Most of the successful small press/e-pubs don’t have such a structure. Made me doubt the business plan from the get-go.

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  94. Anonymous111
    Sep 10, 2009 @ 08:44:38

    I’ve read all of the blogs on QP now and all of the comments, so I’m ready to put my two cents in. Aren’t you all happy? lol

    First off: Angela James.
    There are people feeling sorry for her and others who feel she got what she deserved by taking the risk of leaving Samhain in the first place. Others are thinking that she’ll land on her feet somewhere. In this economic climate it’s doubtful there are that many high-profile editorial positions out there right now, but still, she’ll be okay I’m sure. However, regardless of how anyone feels about her situation, if I were her, I’d have my attorney on the phone right about now. Any way you cut it, the Quintessential Quartet royally screwed the woman. No way did they just up and decide in the last couple of weeks they needed to crunch some numbers. If they had concerns with money before, they would definitely have them now. Severance package? Doubtful. Usually those things require you to contractually meet certain goals and fall within a time frame. Most likely, her contract included a cut of royalties as well as a salary. Just speculating on all that.

    Next: Why They Did Not Open. Did the funding rug get pulled out from under them or did they truly just discover they didn’t have enough to produce the product they promised? The more likely scenario in my mind is that they discovered there was not going to be enough of the pie to divvy up between the Quintessential Quartet–especially after bringing on a high-profile editor and possibly the need to give her a cut too. Karen over at her blog thinks that too many people were in charge. I have to agree. There may have been too many heads talking and the work or lack of work getting done was getting to them. Just sayin’.

    And more: Damage. I agree. Regardless of the fact author’s rights were returned immediately, it was damaging to them. They lost time. And that translates to money. And they lost out publicity wise too. I don’t personally know any of the authors who were contracted with QP, but they very probably announced to the world they had just signed a new contract. I can’t imagine how embarrassing it was for them to retract that or to go back and inform family and friends of what happened. QP should apologize for that alone. And then there is the matter of allowing the process of hiring to go on. I know of two people who applied for the content editor position and one who applied for the copy ed position. Those people lost time too. Even at minimum wage that’s something isn’t it? Not to mention the whole scenario of “now you see us, now you don’t” simply SUCKS! Throw in hiring Angela James and yep, you’ve got DAMAGE.
    Last: About Jane. Did her friendship get in the way? Her friendship probably began due to their mutual interests in this industry–romance specifically. She had faith/confidence in the expertise of these individuals. Is Jane taking this a little too lightly? Maybe. Should we blame her and other bloggers for helping us buy into the Q4 and their obvious lack of planning or ability to stand firm? Nope. This is a blog. Jane is a blogger. She calls them as she sees them. It’s all any of us can do.

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  95. Ciar Cullen
    Sep 10, 2009 @ 08:49:25

    Don’t expect anyone to understand this, but I totally retract my earlier statement, now that I have a better sense of things. I just needed to write that for myself.

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  96. azteclady
    Sep 10, 2009 @ 08:53:46

    @Ciar Cullen: I think I do, and it confirms my first, gut reaction, when reading the treacly post at QP.

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  97. Srsly...
    Sep 10, 2009 @ 08:56:53

    I’m actually surprised to see that people are outraged. The folks at QP tried something. It didn’t work, for whatever reason.

    As far as the writers go…I’m sure it was a disappointment. But if you’re a real writer, you’ll move on and you won’t give this a second thought.

    Writing good romance isn’t a romantic fantasy. It’s hard work that’s filled with disappointment and frustration. And what happened with QP is just a pragmatic part of the territory. Personally, I wish them well and I’m sorry to see that it didn’t work out.

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  98. Aoife
    Sep 10, 2009 @ 09:03:06

    Karen Templeton said:

    I have to say -’ and since I don't know any of the details I'm being hugely presumptuous -’ that I find the lack of financial projection a bit mind-boggling. One of the major components of a business plan, which a start-up is supposed to have in place well before it actually goes into business (hiring people, etc.), is to project how/where/when your money's coming from. That includes a thorough study of the existing market, if there is one, extrapolating from that information how your venture will sustain itself, when it will become profitable, etc.

    I have absolutely no inside knowledge of QP, and no strong feelings about their folding, however, I think there are a lot of assumptions about the partners lack of business acumen that strike me as a little unfair. Perhaps they really were as clueless as the above quote implies. I really don’t know–and neither does anyone else. What I do know as a fact is that having a lovely business plan these days is no guarantee that your investors/lenders aren’t going to suddenly change their minds or their terms at the last minute. Investors are requiring higher collateral, and in some cases, money (from the start-up company) escrowed that matches the amount being loaned or invested. I also know of several cases where the investors changed their minds because their own financial situation changed. Unless you have tried to start a business in the last year and have first hand experience, or know people who have, I think the impact of the current economic situation is hard to grasp.

    There just isn’t enough information out there for any of this conjecture regarding what happened to QP.

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  99. Patricia Briggs
    Sep 10, 2009 @ 09:04:00

    Jane:
    Ushering in the future is always hard. Changing the habits of readers is hard. Selling a product that is pirated by every unscrupulous scallywag on the internet is hard. It’s totally reasonable to support digital publishing — despite it’s problems it shows tremendous promise. I don’t need to enumerate it’s various benefits to you, certainly.

    Having a promising venture collapse is disheartening, but doesn’t change the landscape or the advantages of digitial publishing. Pushing into new ground is very risky for a business. Ten years ago I worked with a company made up of visionaries, who were going to change an industry. We built an amazing software product — years ahead of anything else. Spent a small fortune doing it. When it was done, we had to basically hand-sell every blessed copy, because it took a week to explain to those in the industry how this marvelous tool would change their lives. In the end, the company folded. Great product, but the industry wastn’t QUITE ready. The same product would sell very nicely now. Digital publishing is the same way — readers need a little time to change THEIR attitudes.

    You Rock Jane, and I think your crystal ball is spot-on. Digital publishing will eventually be as mainstream as DVD’s!

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  100. Anonymous111
    Sep 10, 2009 @ 09:09:24

    @Srsly…

    I don’t think the outrage is about authors who may have been
    simply disappointed. I think it is more about all the hype surrounding QP and
    basically how they knew best and were going to be big. No, not quoting or
    paraphrasing here, just summarizing how I viewed all the hype about QP.

    The fact is, as it’s already been mentioned somewhat in this thread, DP
    can’t seem to get its act together. And if these so-called big time professionals
    can’t do it, then what hope do we have? It’s another black eye on the industry.

    One more failure. They promised to deliver the moon and couldn’t even
    get air born. It’s a promise broken. May sound sappy, but there it is.

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  101. GrowlyCub
    Sep 10, 2009 @ 09:10:11

    There just isn't enough information out there for any of this conjecture regarding what happened to QP.

    While that’s true, that’s entirely the ‘fault’ of QP. If they didn’t want speculation about their failure after their mega media blitz, they ought to have given the facts beyond ‘the financial plan was flawed’. I understand that that’s highly doubtful, but they’ll have to understand that the statements issued by them make them look like they were beyond ill-prepared and didn’t do the most basic of research. This lack of a sound business plan (whether that’s really the reason or just the reason given) reflects badly on the romance genre – yet again, because they were positioning themselves as *the* new romance e-pub.

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  102. Nadia
    Sep 10, 2009 @ 09:15:19

    I think Ilona Andrews summed up the situation & why there’s anger over QP’s demise very well over at SBTB.

    http://www.smartbitchestrashybooks.com/index.php/weblog/comments/quartet-press-is-no-more/#98738

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  103. Lynne Connolly
    Sep 10, 2009 @ 09:18:00

    I can say that the mass quality of epubbed books are published poorly.

    You’ll find that anywhere, for print and ebook. The vast majority of books published are poor quality and badly produced and edited. But if you take all books as being equal, that allows people who self publish and sell 10 copies into the picture. Only the top 20% or so of books published get significant sales, and attention, come to that.

    I’m so sorry that QP had to close. I think it was a combination of over-confident expectations and maybe a backer backed out. Four principals does seem a tad top-heavy, but if they all had defined roles and didn’t expect too much return in the first couple of years, they could have done it. But it will be much harder now to start up than it was even twelve months ago. The next entrants will be the big publishers, and they will either enter with a big kaboom, or they’ll buy up established epubs. IMO.

    Angie was my editor at Samhain and I wish her all the best. She’s a savvy lady, and I can imagine that publishers will be gagging to get hold of her. Head of Harper Collins in five years’ time? I wouldn’t be surprised.

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  104. Jackie Barbosa
    Sep 10, 2009 @ 09:20:16

    @Jane: It concerns me a little that you seem to believe all good books will sell.

    A book can objectively be “good” and still not get picked up for publication because, for any number of reasons, it doesn’t suit any publisher’s needs. Just because QP picked up a “good book” for publication does not mean that same book can or will sell elsewhere.

    And since it was my impression that QP was contracting (or intended to contract) numerous out-of-print titles that had been previous published, I think that probably goes double. A lot of publishers just are not interested in reissuing previously published works.

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  105. Srsly...
    Sep 10, 2009 @ 09:35:33

    They promised to deliver the moon and couldn't even
    get air born. It's a promise broken. May sound sappy, but there it is.

    I agree. But I don’t think it was intentional and I’m sure there is a logical explanation.

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  106. Robin
    Sep 10, 2009 @ 10:28:26

    I'm surprised at the general sense of disappointment instead of the outrage I would have expected at this announcement.

    One of my first reactions — following dumb shock– was anger. But when I paused to find a specific target, one that clearly deserved the anger, none volunteered. So instead I simply said that I was frustrated, because without more information (even Angie James has commented on her puzzlement, and she was a QP employee) I don’t feel comfortable wildly speculating. And that PW article — well, let’s just say that I would not, as someone who has done lots of spin over the years, have stated what they did the way they did. IMO it has created more confusion, made the QP principles look a little yahoo-ish, and engendered even more rampant speculation.

    That said, I do think this is unfair to the authors signed and to anyone who applied for any position with QP. I think it’s unfair to James, who was wooed deliberately by QP and who is hardly a novice in DP. I think it’s unfair to the DP community, which is still struggling against negative expectations and the dragging tide of crappy examples (both in product and professionalism). I think it’s unfair to readers who were looking forward to more competition, which IMO is necessary to keep raising the DP bar. And I think it’s unfair to QP itself, because I know the business was not envisioned or promoted in ignorance, arrogance, or dishonesty. That everyone involved seems like a “good guy” in all relevant ways makes the whole thing even more of a gobsmack to me.

    Do I think they should be clearer and straighter about what happened? Yes, especially when transparency was a represented value of the company. If and when that happens, I’ll figure out what to do with my stray feelings of anger. In the meantime, I’m going to express my disappointment and remind myself obsessively that just because some other epubs that shall remain nameless are still open for business does not mean that they have any room to be bragging about anything associated with their name & product. And I’m gonna hope that the individuals involved in QP who do have the knowledge and experience to contribute to the intelligent growth of DP settle quickly into another position/place/venture from which to do so.

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  107. kirsten saell
    Sep 10, 2009 @ 10:36:14

    @Srsly…:

    I'm actually surprised to see that people are outraged. The folks at QP tried something. It didn't work, for whatever reason.

    I’ve been trying to process my feelings about this whole debacle (disgust, frustration, anger), and I think most of my issues center around Angela James.

    I have to admit, I was pissed when Angela decided to leave Samhain. I was pissed off that we were losing her, and even more pissed because she was moving to a start-up that I, at least, had some doubts about. Yes, Samhain is a strong company and they’ll continue to be strong, but it’s a setback to be sure.

    Now, I’m just pissed off for her, because I’m sure she didn’t leave Samhain lightly. She’s not the kind of person who’s going to go chasing butterflies, ffs. If she thought they had a solid chance, chances are they were still viable when they made the decision to close–just not destined to be spectacularly, instantly, knock-your-socks-off successful right out of the gate. The idea of someone coaxing her away from a good, high-profile position at a successful company, then not having the commitment to make an honest stab at steady, cumulative success is…galling. If I’m pissed about it, I can only imagine how irked she must be right now.

    But to tell you the truth, four owners? Made me wonder. And the moment I realized one of the head honchos had “years of publishing experience” (note, not years of epublishing experience), I started to get nervous about the whole thing. When have large print pubs ever shown they understand or have faith in the digital model? The more hype and attention they got, the more sick I felt in my stomach. Every time I saw their logo or read something somewhere about what a solid presence they would be and already were, I’d think of those movies where the old cop goes on and on about how he’s only one week from retirement and you just know he’s getting a bullet through the chest before the end credits.

    After reading her statement today, it seems pretty apparent that this decision was made without her input or knowledge. And that’s where I’m flummoxed. She’s helped build a successful epublisher, she’s one of the most knowledgeable people in the industry. And they didn’t bring their numbers to her and say “Can we fix this?” They didn’t go to her and say, “Dude, this doesn’t seem to add up, is there any way to rejigger the numbers?” Nope, they just seemed to say, “Well, obviously this isn’t working. Oops, better luck next time.”

    And everybody loses. Samhain, Angela, the QP authors, the epub (I refuse to use DP, sorry I just can’t apply an acronym that implies epublishing is synonymous with being fucked up the ass) industry, Angela’s Samhain authors. Everyone.

    QP, I haz a mad. U iz it.

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  108. Anonymous111
    Sep 10, 2009 @ 10:37:22

    @Srsly…

    I doubt it was intentional as well. I rarely believe that people intentionally set out to do damage to others. Although, I’m sure we’ve all seen that not only in our personal lives, but in the work place too–even DP.

    As for logical? They have apparently given their explanation. And it was anything but logical. As stated very well by others here, you don’t go into business without planning the financial aspect of it all. And that includes the unknown variables as in you set aside x amt for cost overruns or any other scenario that could throw your model out of sync.

    I’m still leaning toward the idea that there wasn’t going to be enough profit to split between them and warrant all that work coupled with the fact that there were too many people in charge–which smacks of lack of commitment. I have to agree with Lynne Connolly:

    Four principals does seem a tad top-heavy, but if they all had defined roles and didn't expect too much return in the first couple of years, they could have done it. But it will be much harder now to start up than it was even twelve months ago. The next entrants will be the big publishers, and they will either enter with a big kaboom, or they'll buy up established epubs. IMO

    The bottom line is always about profit in this business and rightly so. However, there is a way to go about it and a way not to. This was definitely not a way to go about it. I feel badly for the next person who believes in DP and wants to take it to a greater level. I truly do. It’s all worse than the LITTLE BOY WHO CRIED WOLF.

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  109. XandraG
    Sep 10, 2009 @ 10:57:47

    This isn’t the first time this has happened to authors, and it isn’t the only, nor is it the worst, thing that can happen to an author. I remember when the Kismet line closed (back when they etched the mantitty on rocks with chisels, LOL), and remember numerous instances of Harlequin lines folding, publishers’ imprints closing, and mergers that turned “submitting a manuscript” into “Son of the Blob.” This, too, shall pass, and while I’m full of regret for all concerned–principals, editors, and authors, the thing that most pays in this industry is persistence.

    I don’t really even think this is a setback to digital publishing. Quite frankly, the reason why Ellora’s Cave originally took off (and before that, Peanut Press and other ebook pioneers didn’t go completely tits-up) was because it was something different that didn’t follow the usual rules. Sometimes, the experience of heavy-hitter professionals in the industry can be detrimental to a “think-outside-the-box” effort. And while many of us assumed the industry expertise would be a blessing or an advantage, there simply hasn’t been much correlative data to demonstrate how industry expertise can hamper a digital publishing effort. The closest correlation of data comes from Ravenous Romance, which features someone from a much different area of the traditional publishing industry.

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  110. Donna
    Sep 10, 2009 @ 10:59:03

    @kirsten saell:

    And the moment I realized one of the head honchos had “years of publishing experience” (note, not years of epublishing experience), I started to get nervous about the whole thing.

    This is the part that’s confused me this whole time. Everyone acknowledges that it’s a different business model. Why is there an expectation that experience with one will translate to the other? I don’t get it.

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  111. Anon Y Mouse
    Sep 10, 2009 @ 11:56:43

    I remember when the Kismet line closed

    Man, I loved the Kismet books. I had shelves and shelves of them.

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  112. Treva Harte
    Sep 10, 2009 @ 12:06:07

    I’m speaking for myself here, not Loose Id or Quartet. But Loose Id started off with four partners. The difference is that we started off knowing we would have to do the grunt work and continue to do it for many years before we started to hire or contract anyone to take on some of that work. We didn’t expect to make a large profit or even see any money outside what we put back into the business. We knew what distributors would and wouldn’t pay us. We knew what we could afford to spend for promo and I thank our financial partner for firmly telling us to look at ROI before we spent money.

    I don’t know what happened but I’m very grateful for my other partners and the fact they have all been willing to put the authors’ and company’s needs before anything else. As long as we continue to do so– or any business, including a starting e-publishing business, does so– we probably have a fighting chance to continue our success.

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  113. Moriah Jovan
    Sep 10, 2009 @ 12:13:07

    I remember when the Kismet line closed

    Me too. I’d just signed a contract.

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  114. Anonymous111
    Sep 10, 2009 @ 14:03:42

    @Treva Harte

    Exactly. It was a matter of commitment for you. Most businesses don’t see a profit for quite some time. Lots start out with grandiose plans and quickly learn to scale back. Does that mean you must sacrifice quality? No. Just means you might not make quite as big of a splash initially. And not as much money.

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  115. Evangeline
    Sep 10, 2009 @ 14:41:26

    I’m rather glad there isn’t outrage and wank spilling across the internet right now. Perhaps the closing of an epub will finally create earnest, honest talk about epublishing instead of finger-pointing, fury and sarcasm.

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  116. Anion
    Sep 10, 2009 @ 15:00:06

    Kassia Krozer has just blogged about this in a little more detail over at Booksquare.

    I have to admit I’m terribly confused by the idea that all of the trouble came from trying to negotiate with third party sellers, as selling through third parties or retailers (Amazon, Fictionwise, whatever) is certainly not a necessity to be a successful ebook publisher. Why in the world, if the funding didn’t yet cover distro through those retailers, would they not just start with direct sales and see how things go? That makes no sense to me at all.

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  117. Karen Templeton
    Sep 10, 2009 @ 15:31:27

    Apropos of a couple of ideas batting around about why Quartet didn’t make it, I sincerely doubt the reasons behind the failure had anything to do with either Quartet’s being an e-publisher (as opposed to print) or their desire to peddle quality products. :)

    All businesses, new or established, have cash flow issues; it’s how the business handles those issues that separates the failures from the successes. And any business dealing in product distribution has to address who gets what cut, and how much profit they can expect from each unit sold. As has been said, it’s the rare venture that turns a profit right from the start, which is why — unless a business is starting out very, very small — there needs to be a solid cash cushion in place to absorb all those pesky start-up, and early days, costs before the business takes off. So I’m not sure why what’s happened with Quartet should negatively reflect on e-publishing, specifically.

    And as far as I can tell, it costs no more to attract/produce a quality product than not, if the eye for quality is there…especially in a no-advance model. Heaven knows there’s a lot of unpublished dross out there, but there’s also a lot of as-yet-undiscovered talent. Promising a quality product is about picking the quality material over the dreck. That doesn’t take more cash, just more discernment.

    So wherever the “blame” lies — if there even is any: as has been said, we’re all speculating at this point — this sounds to me more like the kind of basic under-capitalized start-up snafu that can happen to any business, no matter what the product or service, or how that product is delivered.

    Edited to add: Just read Kassia’s blog post, much of which admittedly went over my head (which is why I write and not publish :)). So, yes, obviously Quartet’s being an e-publisher definitely did impact the reason for its closing, although I still maintain it doesn’t negatively impact e-publishing as a whole. If anything, perhaps those not in the business can now understand just how NOT easy it is to start up an e-publishing venture.

    Still…I wonder, too, why they didn’t start smaller?

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  118. Melissa Blue
    Sep 10, 2009 @ 16:38:26

    @Karen Templeton:

    Read the article twice. *Had the same reaction when you read it.* It sounds to me like there were too many variables that would change and the publisher would need to change with them and/or be flexible enough, in order to make the whole thing profitable.

    Outside of that I’d be speculating.

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  119. kirsten saell
    Sep 10, 2009 @ 17:01:03

    As has been said, it's the rare venture that turns a profit right from the start, which is why -’ unless a business is starting out very, very small -’ there needs to be a solid cash cushion in place to absorb all those pesky start-up, and early days, costs before the business takes off. So I'm not sure why what's happened with Quartet should negatively reflect on e-publishing, specifically.

    There’s a lot of ways epublishing is less risky than other businesses.

    Epublishing is less prone to the first success crunch that hits many swiftly successful product manufacturers–that point where you’ve used up the lion’s share of capital filling initial orders, and then get inundated with tons of orders which you don’t have adequate funds to fill. i.e., If they did a print run of 500 books which sold out in a week, then had orders for twenty thousand more of the same book, the profit from those first 500 would not be enough to cover the costs of manufacturing 20 thousand more. Some companies end up going under because they can’t get additional loans to cover their own quick success, sad as it is.

    With epublishing, there’s no added investment in providing additional copies of the same book for sale, so you don’t have that problem. In many ways, epublishing is more financially viable than print publishing. It’s easier to capitalize on quick successes and easier to absorb losses because the financial outlay per copy (after cover art, editing, formatting, etc) is minuscule or non-existent compared to print.

    I honestly think either one of their backers bowed out, or something had to be seriously wrong with their projected numbers to start with–and that something might have been an assumption that they’d be profitable right out of the gate. Which is a bad assumption to make, whether you’re manufacturing tires, baby clothes or ebooks.

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  120. K. Z. Snow
    Sep 10, 2009 @ 17:04:23

    @Karen Templeton:

    Re-selling a project, no matter how good it is, isn't that easy, believe me.

    In addition, the submission process is a lengthy one, even in epublishing. Waiting three or four months simply to get a “yea” or “nay” is increasingly more the rule than the exception. Then add on another six to eight months before the work is actually published.

    That’s a lot of time. And time is indeed money.

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  121. kirsten saell
    Sep 10, 2009 @ 17:12:18

    Just read some of Kassia’s post, and this caught my attention:

    ISBN madness (really, one ISBN for every format? the mind continues to boggle) and alternate product identifiers

    I hope to heck she’s not talking about different numbers for each digital format–one for Sony, another for Kindle, etc–because I’ve checked my own books and all digital versions have the same ISBN. Yes, you need different ISBNs for hardback, trade, mass market and digital. If you’re only dealing with digital books, you only need one ISBN per title, right? Or have we all been doing it wrong…?

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  122. Moriah Jovan
    Sep 10, 2009 @ 17:33:09

    Kirsten, Bowker/ISBN agency would really really really like for e-publishers to have one ISBN per e-format. In fact, yes, you’re “supposed” to. But it’s not a law and there are no consequences and I can’t think of an e-publisher who does it.

    I’ve been questioned about my use of one ISBN for the digital book. I solved the problem by sticking all SEVEN of the formats I do in a zip file and calling it good. Not that I had to.

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  123. kirsten saell
    Sep 10, 2009 @ 17:38:33

    So a publisher could get around it with their eternal bookshelf with all formats available under one price, too, I’d guess. That sounds reasonable to me.

    But if they thought multiple ISBNs for one ebook title was required, what does that say about how informed they were going in? They can’t really have thought that, could they?

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  124. Moriah Jovan
    Sep 10, 2009 @ 17:55:46

    All I’m saying is that having one for each format falls under the “what we’re SUPPOSED to do” banner. NOT doing it is a publisher’s personal decision and there are no repercussions. Even wrapping them all up in a zip isn’t necessary to get around it. If you (meaning, publisher) don’t want to, you don’t.

    It’s not like a print book, where you have to get it into the distribution stream and it MUST MUST MUST have an ISBN to be A) available for ordering and B) seen as legitimate. Everybody understands this. Everybody understands that a hardback needs one, a trade paperback another, a mass market paperback a third, an audiobook yet another, and any differing collectors’/limited editions need a fifth or however many. A digital title is seen by small publishers like me to be just another one in that class.

    The one-ISBN-per-digital-format debate centers over the idea that you need to track sales-per-format, except that…you don’t. The formats are out there because you’ve made the decision to offer them in X, Y, and Z, and there is no reason to track them. There is no physical inventory to move, and no SIGNIFICANT costs associated with providing a less popular format (particularly in the case of, say, Fictionwise, where you send them an RTF and they do all the conversion for you to your specifications). If, in the future, you see by the landscape that a format has become unpopular, you just don’t offer that format anymore.

    You can compare it to a shirt. You manufacture and sell a shirt that comes in 8 different colors and a gabillion sizes. You don’t put a product code on each variation. You have Shirt 123. You then have SKUs to differentiate colors and sizes that Shirt 123 comes in. In this case, the agency would like you to use a separate ISBN for each color/size combination of Shirt 123.

    And let me tell you. Those ISBNs don’t come cheap.

    The fact that Bowker TODAY announced they were cutting the price in half is, I think, indicative of the fact that they overestimated small pubs like me following “the rules.” It’s just far too expensive for no payoff and no consequences for not doing it.

    And some e-publishers do actually offer the ZIP file as its download instead of making you choose one format or the other. It’s convenient for everybody involved, IMO, which is why I do it.

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  125. brooksse
    Sep 10, 2009 @ 21:46:47

    This from a PW article on QP dated July 31 (emphasis added):

    E-book prices will range from $4.99 to $9.99 and paperbacks will be in the $9.99 to $19.95 range. Meyer said that for Quartet to be viable, the company needs only for each title to average sales in the “couple of hundred” range.

    http://www.publishersweekly.com/article/CA6673986.html?rssid=192

    I don’t know much about the digital publishing world, and I don’t know the length of the ebooks QP was planning to sell… But as a consumer, based on my own buying experience, a $4.99 to $9.99 range for ebooks sounded on the high side. Most ebooks I buy are in the $3.99 to $7.99 range (list price). I buy ebooks that are published by e-pubs and by NY pubs. For the most part, the ebooks that fall into the upper end of my buying range ($6.99 to $7.99 list price) are from NY pubs. And that’s the price before the FW, BoB, etc., discount kicks in.

    FW, BoB, etc., would have had to discount QP ebooks enough to bring the prices in line with ebooks from the other e-pubs, or I probably would not have bought QP books.

    So my guess (and it’s only conjecture on my part) is they found the price range they were willing to sell at, in order “to be viable,” was not in line with what consumers would have been willing to pay.

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  126. kirsten saell
    Sep 11, 2009 @ 00:49:24

    All I'm saying is that having one for each format falls under the “what we're SUPPOSED to do” banner. NOT doing it is a publisher's personal decision and there are no repercussions.

    Wouldn’t that have been something Angela James could have told them, if they’d bothered asking? From what I gather, she had no idea there were problems, let alone what they were, until after the decision was made. Seems…silly.

    But then, the more I read about this, the more I think they were going by Linn’s “years of traditional publishing experience” when making decisions. Considering how ridiculously ill-informed most NY pubs are about the ebook market (on issues like DRM, pricing, formats, royalties, etc), it seems foolish to consider traditional publishing experience an asset when running an epublisher…

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  127. Ana Thierry
    Sep 11, 2009 @ 06:17:30

    Kristen wrote: Wouldn't that have been something Angela James could have told them, if they'd bothered asking?

    If she even knew. As a managing editor this probably wouldn’t have been her decision to make. Usually managing editors deal with scheduling, editing and well..managing the editors. :)

    Now chances are she probably noticed though as Samhain has a boat load of books and that would be hard to miss.

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  128. Moriah Jovan
    Sep 11, 2009 @ 06:58:52

    Wouldn't that have been something Angela James could have told them, if they'd bothered asking?

    I have no idea, and I’m not going to speculate.

    I’m only commenting on my decisions based on what I know–and one of the things I know is that in e-publishing, standard practice is to assign one ISBN to one e-title (then another for print, if the sales warrant POD). There is no way in hell I’m going to waste nearly an entire block of ISBNs for one e-title.

    The fact of the matter is that all the big retailers of e-books don’t really care if you have one or not, and especially not Amazon.

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  129. Anon76
    Sep 11, 2009 @ 07:33:23

    From the article linked to in comment #125, it appears the primary investor was Don Linn. And from a link elsewhere (can’t remember where) I believe it was Kassia who stated something along the lines that “the key investor” didn’t feel comfortable with the newly crunched numbers.

    So perhaps this IS a case of over-predicting returns based on escalated pricing…among other problems including not having a sound grasp of the differences between traditional and epub models.

    I also found it odd in the article that they stated they were planning to re-sell the rights of “breakout” titles to larger, traditional publishing houses. Made me go, hmmmm.

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  130. Kassia Krozser
    Sep 11, 2009 @ 11:49:36

    There is so much to address here, and I am trying, to the best of my ability, to address issues and questions, because, frankly, I still believe absolutely in this business model and the viability of digital publishing. Just because it didn’t work for us, it doesn’t mean it’s not workable for others.

    Since some of you are focusing on my Booksquare piece — and that piece was written for publishers, not authors — I thought I’d deal with some of those questions. The pain points I noted were meant to help others getting into this business. None of them were contributing factors to our decision to cease operations. However, if you are not familiar with the publishing business, traditional or digital, these can cause many headaches. What follows gets boring and wonky. I’d advise skimming unless you really care.

    One person raised, in particular, the ISBN problem. Of course we knew about this. It wasn’t a surprise on any level. However, as Moriah points out, it’s an issue for small publishers (and some large). Because there is ongoing (and sometimes vehement) debate in the industry about this rule, which is not always followed, I thought I’d explain why I find it to be a ridiculous policy.

    First, the rule does state that there is an ISBN for every format: hardcover, trade, mass market, EPUB, MOBI, PDF, HTML, and formats to be discovered. If a publisher adheres to this practice (and many do), it increases the chance of error in reporting, both internally and to authors. For example, let’s say I blocked out five numbers per title to cover all the formats I planned to release a book in. Then a new format is added, then another, then another. I need to associate each of those new numbers with the “master” ISBN to ensure that author royalties are reported properly. If I (or any publisher) make a mistake in mapping the new ISBNs to that master number, then your royalties are either underreported or reported to the wrong author.

    For small press, the cost per ISBN is orders of magnitude higher than the cost for large publishers, despite the recent announced price cut. Doing it “right” is expensive. Then you have to factor in issues like Amazon’s use of an entirely different number as an identifier — they don’t care from ISBN, not important to them (also a contributing factor to the industry debate). Obviously, like other digital and small publishers, we planned to limit the madness, but it’s certainly something new publishers must consider.

    So my comment was not about a lack of understanding, it was an extension of conversations I’ve had for a long time with people in the industry. Likewise, the negotiating with third party distributors. There are many factors to weigh during this process, such as level of service and retailers who associated with the distributor. No surprises, again.

    Regarding the financials…hmm, from day one we did projections. Now, as we all know, it’s hard to get precise numbers about sales in publishing. Print runs are always often inflated and hard numbers are rarely revealed. Nobody in publishing knows how to predict the success or failure of a book, the soon-to-be released Dan Brown book excepted. As additional information was gathered, we redid our projections (this is normal course for any business). Some costs went up, many went down, and things like conversion costs, in particular, were brought so low, even I was surprised. It turns out when you ask the right questions of the right people, really smart solutions appear.

    I don’t know what questions the interviewers from PW asked Kat to garner the responses she gave, but at the time of the July interview, we had not finalized prices. Most of us, including Angela when she came on board, were proponents of a structure based on word count. At the end of the day, a sliding scale pricing scheme didn’t change the projected breakeven numbers, though as we all knew, some books would sell less, some would sell more. Again, this was not a surprise to any of us. It’s how publishing works.

    For the record, the idea of licensing breakout titles to traditional publishers for distribution makes perfect sense if you consider the fact that carrying physical inventory and engaging in the business of physical distribution would have been overly expensive for the expected return. Building that infrastructure would have the effect of taking money from the core business and investing it in something very risky. Doing so made no sense until we knew how sales would go — all the projections in the world mean nothing until you have actual customers making purchases — and where we should put our print efforts, if at all.

    As for the authors who had their rights tied up, that, of all things, was one of the things that hurt the most. I hated writing those reversion letters, and cannot express how amazingly gracious each of those authors was about what happened. Yes it happens all the time to authors, but that did not make it easier for anyone involved.

    Lack of financial acumen or business knowledge did not contribute to the decision to close Quartet. There were many factors, none of which had to do with the viability of the business model or talent of the people involved. On a personal level, if there had been a way I could have continued the company and done it right, I would have. I believed then and now in digital publishing. I couldn’t, and that just kills me.

    So despite the treacly tone (and I laughed when I saw Sarah’s phrasing) of our final message, the truth is that it was deemed better to pull out now. Like Kat, I was amazed by all the incredible support we got when the announcement was made. Good news and bad reaches around the world in moments, and I received many incredible messages.

    I would also like to publicly thank Jane for both supporting this business and holding us to a high standard. She asked tough questions and made it clear that, no matter how much she liked us on a personal or professional level, it was all about the books and readers. We weren’t going to get a free ride from her, and I respect her so much for that.

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  131. Lynne Connolly
    Sep 11, 2009 @ 12:11:57

    I could be way off base here, but my first reaction to this post is that:

    1. QP failed to attract the “banker” authors who would bring the big successes to the portfolio. Ethically, QP couldn’t approach the authors directly, so they had to attract them.
    2. A backer withdrew.

    Okay, so I could be wrong. Often am. But these days, authors like me who have been in digital publishing for a long time have learned to be wary. I won’t submit to a publisher until it’s been in business for 12 months, for instance, just to increase my chances of not getting burned again, and I know many of my colleagues feel the same. That means the bigger names would stay away, unless they had certain guarantees. I hadn’t realised before how this would impact a startup, but the authors are the capital of a company, especially an epub, and without them, the company has nothing to offer.

    A setup is more expensive than people think. I wouldn’t imagine that QP didn’t have backers, startup cash, that financial cushion essential for most successful businesses, so something else had to be amiss.

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  132. Mora
    Sep 11, 2009 @ 12:14:14

    Now, as we all know, it's hard to get precise numbers about sales in publishing. Print runs are always often inflated and hard numbers are rarely revealed.

    Wait…what do print runs have to do with the digital publishing model?

    As a reader, I’m still hoping for some epub to up the amount of non-erotic romances they publish. That was one of the reasons QP interested me–they seemed prepared to offer a wider range of stories. Samhain is great for that, but I haven’t found many non-erotic romances through other epublishers that work for me. There are only three companies I can think of that even offer them–Samhain, Wild Rose Press, and Cerridwen.

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  133. Anonymous111
    Sep 11, 2009 @ 13:33:04

    Okay. It wasn’t the ISBN numbers, wasn’t the cost of print, not surprised by the low cost of conversion, no surprises with third party distributors, wasn’t a lack of financial acumen or business knowledge. Basically if I am reading this correctly, nothing went wrong.

    Except maybe they could not predict sales? Who can?

    So once again we are left with—

    1. Someone pulled financing. Why? Not enough profit fast enough or no one could say how much.
    2. Possibly not enough well-known authors were submitting manuscripts as someone else said. (I’d imagine that could be disheartening, but enough to close the doors over?)

    I still say it was all a matter of the level of commitment. Be careful of who you play ball with. Sometimes they just up and quit–and if it’s their ball–the game is over.

    (I’m also a little curious over the whole print run thing myself. People keep saying they believe in DP, but every time I turn around we’re talking print. Maybe we should stop talking print and just focus on DP.)

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  134. XandraG
    Sep 11, 2009 @ 15:44:53

    What I would be really interested in knowing is if the epublishing model has calcified towards giving distributors/resellers more clout than it has been up to now. Based on the comments by Kat, it seems that QP was looking to do much of its sales through other distros like Amazon, Fictionwise, ARe, and MBaM and such. Most of the successful larger epublishers use those channels (and have used them to varying degrees for some time) but their principal new sales sites are their own websites.

    I wonder if Fictionwise’s recent acquisition by B&N may have had an effect here (via its absorption into the BN corp culture, the most irritating of which to authors is their technological regression from monthly sales reports to quarterly sales reports, thus tying up more money due the author for longer periods of time). And the deep distro discounts just absolutely make no sense to me. I understand why a B&M bookstore would want a 65% discount, or even a warehouse like Amazon would want one, for a print book. But the deep discounts for online retailing seem distorted to me. With the differing breakdown of costs associated with stocking an e-title, there ought to be some wiggle room.

    And a frustration with the industry in general and conversions of files–I would really really like to know why this has to be more expensive and complicated than hiring a programmer to create a macro.

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  135. kirsten saell
    Sep 11, 2009 @ 15:55:04

    I keep hearing what the problem wasn’t, but nothing in regard to what the problem was.

    As to their possibly being unable to attract the big name authors, that likely had to do with being paid on net. I know I wouldn’t be interested in being paid 35% of the 35% left after retailers’ discounts, even if my book was listed at 9.99. We’re getting into print-equivalent royalty rates there, and if I’m not going to take that from a NY pub, I’m certainly not interested in accepting it from an epublisher that’s just opening shop.

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  136. Lynne Connolly
    Sep 11, 2009 @ 16:04:21

    And a frustration with the industry in general and conversions of files-I would really really like to know why this has to be more expensive and complicated than hiring a programmer to create a macro.

    That bit I know. Converting a document into another format, eg Microsoft Word into Mobipocket, throws up a number of typos and strange symbols, as well as altering other things. So each format has to have its own spellcheck at the very least, and preferably a read-through.

    The distros? I’d like to know that, too. I don’t think so, right now, but they are making a claim for control, just as the bookstores were once all powerful in deciding which authors to stock and so which sold best.

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  137. Moriah Jovan
    Sep 11, 2009 @ 16:16:04

    conversions of files-I would really really like to know why this has to be more expensive and complicated than hiring a programmer to create a macro.

    As for conversion, Kassia said:

    Some costs went up, many went down, and things like conversion costs, in particular, were brought so low, even I was surprised.

    I took that to mean that she was surprised the cost for conversion wasn’t that high.

    It’s not. In cash. It’s expensive in time if you want something that looks as good as the device and software will let it. Let me add my viewpoint here.

    One wouldn’t put a Word file through something like Mobipocket (or Calibre) and expect to get a salable product.

    You have to convert the DOC/RTF file to HTML, strip out the crap Word puts in it, write a style sheet, decide how you want the e-book to look in the device, mark up the rest of the file with your CSS formatting, make appropriate changes to make the HTML into XHTML, insert hyperlinks (say, a Table of Contents), make certain any images you want to include (e.g., the cover, dingbats, etc) are in the appropriate sizes for each device, and then run your HTML file through whichever format creator you’re doing at the moment.

    Now, do that five more times with five completely different sets of XHTML (and image and formatting) requirements per format. This not something a macro can do. There are tools that make it easier, but generally, I can say that the quality of an e-book file is directly proportional to the amount of human work has gone into it. And very very often, no matter how much you try, you still don’t get what you want it to look like.

    When you get a crap e-book file, thank a macro.

    And if you get crap e-book formatting on Kindle, you can thank Amazon’s macro.

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  138. Angela James
    Sep 11, 2009 @ 16:29:55

    I keep hearing what the problem wasn't, but nothing in regard to what the problem was.

    Nor are you likely to, because not everything is for public consumption. I’m surprised you even made this comment. Given all of the speculation people, and you in particular, have participated in, don’t you suppose, if any of us could talk about what happened we would?

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  139. Anion
    Sep 11, 2009 @ 17:38:34

    @Lynne Connolly:

    1. QP failed to attract the “banker” authors who would bring the big successes to the portfolio. Ethically, QP couldn't approach the authors directly, so they had to attract them.

    I’m a little confused on this. Why in the world would it be unethical for a publisher to approach an author? It’s done all the time; often through that author’s agent, but if no agents are involved, then directly. I’ve been approached quite a few times myself and have never once felt that approach to be unethical, nor has my agent indicated it’s in any way unusual. I have a few friends who’ve been approached, as well, and again no one felt anything unethical was happening.

    Now, I was approached by another agent once, and my agent certainly didn’t appreciate that. But publishers? I’m really curious on this, because I’d love to know why it’s unethical. What have I missed?! :-)

    Kassia, when you tell us that Booksquare piece was written for publishers, not authors, what exactly is your point? That since we’re just authors we shouldn’t have read it, or shouldn’t discuss it?

    I personally don’t really care why QP closed, and no, I don’t feel it’s really any of my business. But I do think if you’re going to show up here to explain something, you should explain it. JMO.

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  140. Kassia Krozser
    Sep 11, 2009 @ 17:41:30

    @xandra — Moriah gave a very good explanation of the issues. If it were as simple as writing a magic macro, so many people would be doing the happy dance. We were able to get conversion costs far below our initial budget, and that was a lot of work. We’re still in the early days of this (though it might not seem that way to some) and tools are still being developed. We were lucky to work with people who really understand EPUB and other standards — and Moriah barely touched on the headache of the Kindle-compatible version. The MOBI standard is light years behind modern HTML. I was incredibly proud of the files we produced, and thank the authors who offered up their manuscripts as guinea pigs. Working with so many different styles of Word made a huge difference in problem-solving.

    As far as third party distributors are concerned, the truth of the matter is that you have to go where the customers are. I talked about this in my post: most readers shop at bookstores (physical and online) because they simply don’t care who publishes a book. They’re looking for something interesting to read. And while you can encourage readers to shop direct — it’s clearly the most advantageous for the publisher and author — you can’t expect it. The direct sales model depends upon a reader knowing about the publisher, the publisher’s website, and finding books (plus figuring out the right format to purchase — a problem encountered even by very experienced ebook readers).

    Think about the Kindle customer: Amazon owns this person, has a credit card number on file, and has made it far too easy to buy directly from the device. That customer won’t necessarily be hopping from website to website, downloading files, and loading them onto her Kindle. Those that do so are terrific, but ease of use trumps many things (and we have to understand that the average consumer doesn’t know or care about a publisher’s business model). And we know the device/reader market is growing, and readers are being consolidated around retailers, not publishers.

    These retailers set the terms, and in many instances, the terms being set are not favorable to publishers.

    The print thing was, obviously, just an example of how hard it is to get hard numbers about anything in this industry. There are no solid numbers about ebook sales, by publishers, by genre, by retailer, by anything. Everyone is guessing and predicting these numbers. Internally, every publisher knows these numbers and tries to make decisions based on how similar books performed previously. Nobody goes into publishing to get rich. The joke is that it’s easier to win the lottery.

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  141. Kassia Krozser
    Sep 11, 2009 @ 17:59:42

    @anion — I’m not sure what you’re expecting me to explain. I said I’d answer questions to the best of my ability, and if I’m not answering something, there’s a reason for it. I’ll address your question about publisher versus author thing — I was responding to Karen Templeton’s comment about some of it going over her head. It’s not that she is incapable of understanding. I know her to be a very intelligent and savvy author, but she was not the primary audience of my post (though I am thinking about writing more on the finances as she asked, because I do agree that the more knowledge everyone possesses, the better for future decision-making).

    The ISBN thing, for example, is not something authors should ever think about (unless they are the victim of a mismapping or engaged in publishing on their own), but it’s something publishers have to consider as they do business. Likewise, negotiating terms with third party distributors — authors should understand how this aspect of the business works, especially because, well, publishers are changing how the money flows to authors based on how economics are shaking out in this new market (and I’m talking about traditional publishers such as Random House). However, handling these negotiations, understanding the implications of using Ingram versus Overdrive (for example), I don’t think authors need to think too much about this stuff. Unless they’re really into it, in which case, I encourage it.

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  142. shirley
    Sep 11, 2009 @ 19:19:36

    Just a reader who has a huge question here:

    And while you can encourage readers to shop direct -’ it's clearly the most advantageous for the publisher and author -’ you can't expect it. The direct sales model depends upon a reader knowing about the publisher, the publisher's website and finding books (plus figuring out the right format to purchase -’ a problem encountered even by very experienced ebook readers).

    Really? You mean QP honestly thought, with a couple of the biggest names in Romance Blogging giving them full-on support AND tons of free, positive buzz that readers were going to have problems finding QP? Note, I mean all kinds of readers, especially since it wasn’t just DA and SB, but PW as well that was in all the early PR razzle dazzle.

    And I’m a long time e-reader that’s just a little irked that you think I somehow can’t handle my technology well enough to know what formats I can buy an ebook in, as if that really has anything to do with QP deciding to call it over.

    As to the books parts, I think that’s just part of any entertainment business. Brick and mortar or no, you’re still going to have problems offering something for every single customer. I mean, no one entity can *ever* expect to make every single person who stops in happy. Which is why you choose the demographic you want to hook, focus on them, and hope you get some impulse buyers on the side. I mean, isn’t that what marketing is about?

    I hope this message doesn’t come out ‘sounding’ snotty, because I’m not mad, I’m just seriously bamboozled by QP’s founders (all of them in various outlets) long-winded and accomplished avoiding of giving hard, plausible reasons for calling it quits.

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  143. GrowlyCub
    Sep 11, 2009 @ 20:35:22

    Certainly not everything is for public consumption. But if you go out and do a media blitz in the bloggosphere that was quite something out of the ordinary and get lots of support sight unseen from some fairly prominent folks and entities, claiming your company is going to be *it* as far as this new market is concerned and touting your expertise and solidity, then it’s just a tad facetious to say now, ‘didn’t work out, sorry, and while we expected you all to trust us implicitly, the reasons why we are now not delivering aren’t for you to know’.

    The more I see from the principal players on this topic, the more annoyed I get.

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  144. Kassia Krozser
    Sep 11, 2009 @ 21:51:44

    @shirley — I respectfully disagree with your assessments. The average reader, not the readers who have been early adopters of ebooks, has only just begun to migrate to this marketplace, and they are shopping at major retailers. Any publisher who isn’t maintaining a presence at those retailers is losing sales. And, based on far too many conversations, the technology is not transparent, even for those of us who have been around for far too long (and I have, I am old). I never said you can’t handle technology. I’m not sure where that came from, but it had nothing to do with why we ceased operations. In fact, neither of these were factors.

    @growlycub — I am sorry you aren’t getting the answers you want. It may just be because there isn’t a horrible scandal here. Enough participants felt the company wasn’t working and decided not to go forward; I cannot read minds nor speak to their reasoning, and I have to respect their personal assessments and decisions as valid. Even though I am the most stubborn person on the planet, I conceded for this group, this time, it would be wrong to proceed. Continuing in a half-assed manner would have lead to big, ugly problems down the road, and that would have been far worse for everyone involved.

    Sometimes, the treacly answer points to a truth: nobody wanted to fail, nobody wanted to get this far and throw in the towel, nobody expected this would be in the outcome. I have answered every possible question that I can, and I will continue to do so. Angie has addressed everything she can. We cannot speak for others (except for Kirk, though I’m totally letting her take the lead on that one , some minds are too scary even for me). I hate that this happened.

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  145. Anion
    Sep 11, 2009 @ 23:06:14

    @Kassia Krozser:

    The average reader, not the readers who have been early adopters of ebooks, has only just begun to migrate to this marketplace, and they are shopping at major retailers. Any publisher who isn't maintaining a presence at those retailers is losing sales.

    Ellora’s Cave sells more books on their site every month than Fictionwise does (for all publishers, in all genres). So sorry, I don’t agree that an online retailer presence is necessary.

    It’s merely academic at this point, and I don’t mean to pick a fight with you. It’s unimportant. And again, I’m certainly not trying to pry into the reasons the business decided to close; to be honest, I don’t really care. But it is entirely possible for an ebook publisher to be successful without going through the retailers.

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  146. kirsten saell
    Sep 11, 2009 @ 23:33:32

    @Angela James: Nor are you likely to, because not everything is for public consumption. I'm surprised you even made this comment. Given all of the speculation people, and you in particular, have participated in, don't you suppose, if any of us could talk about what happened we would?

    I concede the point. Maybe. If I can restrain myself. Okay, I can’t, I’m going to speculate, and some of that speculation is probably going to continue to happen where it will annoy others. :)

    And if you can’t speak for some reason or other (legal or ethical), I suppose we’ll all have to live with that. It’s just a shame is all. Samhain is something less without you there, and it was all for nothing. And that just burns my ass.

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  147. Angela James
    Sep 12, 2009 @ 07:04:52

    Thanks, Kristen. While I do thoroughly appreciate the sentiment–I do have an ego after all :p–I don’t agree that it is or will be less. Just different and while different can be a hard adjustment, it’s often worth it in the end. My leaving opened doors for other people with fresh perspective and ideas and that can be a positive for any company. I’m proud of what I built at Samhain, and I hope I will be missed, but part of the reason I’m proud of what we built is because we built it to the point of being good without the presence of any one person.

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  148. Anonymous111
    Sep 12, 2009 @ 09:08:47

    From Booksquare: It's an uncomfortable thing. Publishing people like to pretend that the business different and secret. Not so. It's good to talk about stuff. I believed then, and I believe now, that it doesn't help an industry to move forward if people don't talk about what they've learned from experiences.

    If everyone is contractually obligated not to discuss the reason why QP closed, then there is nothing anyone can do to force the disclosure, of course. And what everyone has learned, once again, is to not deal with a start-up publisher until they have been in business at least a year or more. And that makes it even harder on anyone trying to go into business, doesn’t it?

    Judging by what the principles involved–those who have spoken up anyway–have said, I believe they are truly upset and sorry that the pub closed, that the venture failed. But I stand by my belief that it did indeed damage DP. Every time a publisher closes, authors grow more fearful and others who may have the right of it and the money to back it shy away.

    Someone said to me last night that it was a blessing that QP closed. That there was really no more room for another pub–not one that could compete with the bigger pubs anyway. I disagreed with that. Now I think the next big thing is the insertion of NY and their greater weight. I think Lynne Connolly spoke to that.

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  149. kirsten saell
    Sep 12, 2009 @ 10:22:06

    Someone said to me last night that it was a blessing that QP closed. That there was really no more room for another pub-not one that could compete with the bigger pubs anyway.

    I might agree that it was a blessing (a mixed and hard to take one to be sure) but not because of competition or lack of room within the market.

    What do you all think would happen if an epublisher paying royalties on net (which reduces authors’ percentages to the print-equivalent range) was hugely successful? Successful enough to take a big slice of the readership and invest more aggressively in their own growth?

    Would paying on net not slowly become the new model for epublishing as other companies were forced to switch over or go under? If net became the new standard, I’d resume my agent hunt and start looking for a traditional publisher. Just sayin’.

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  150. Jane
    Sep 12, 2009 @ 10:26:00

    @kirsten saell: You do realize, of course, that NY pubs pay DP royalties off the net, right?

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  151. kirsten saell
    Sep 12, 2009 @ 10:34:38

    @Angela James: I don't agree that it is or will be less. Just different and while different can be a hard adjustment, it's often worth it in the end.

    I do think Samhain could emerge even stronger from this, but it is an adjustment. Authors orphaned, and the other editors’s schedules just that much more full, it’s definitely painful for the first while. I’m almost glad I’ve been a little blocked on the project I’m writing for my editor because I’d imagine it will be a longer wait from sub to release for the next however long as everyone scrambles to find slots for authors.

    But yes, I do think we’re less without you (maybe not forever, but for now), because you were more than an exec editor. You’re well known in the blogoshpere, well liked, well informed, well spoken and diplomatic in ways I can only aspire to. :P There’s only one Angela James and you’d be an asset to any company for that alone, even if you spent your days getting massages while drinking Mai Tais and twittering nonstop. The fact that you work double-damn hard is cream on the cake.

    I hope you find a position you love in a company with the same level of dedication and commitment that you’ve always brought. But maybe drink some Mai Tais and get a massage first…

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  152. kirsten saell
    Sep 12, 2009 @ 10:38:29

    You do realize, of course, that NY pubs pay DP royalties off the net, right?

    They also pay advances, and do print runs, and any number of other things that epublishers don’t do.

    What I’m saying is, for an author, there is good and bad with either model. When the main draw for an author–that 30-40% royalty on gross–that attracts them to epublishing is gone, why wouldn’t they go somewhere they’ll get the same deal on digital, plus an advance, and a print run, and a bigger marketing department…

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  153. Moriah Jovan
    Sep 12, 2009 @ 10:40:03

    You know, “net” means a whole lot of different things to different companies. I wish we could/would define the combination of variables we’re talking about when we fling that nasty word “net” around.

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  154. Anonymous111
    Sep 12, 2009 @ 10:49:16

    @Kirsten Saell

    There are already epublishers paying on net. Most authors don’t think about net or gross and never realize that having a publisher take care of paying for editors and cover artists does not include things like credit card fees–which can mount up if there are indeed decent sales. So it’s already happening and has been happening. The cost of doing business is one way or another always going to primarily rest on the backs of authors. But I sure as hell advise everyone to look for net or gross in their contracts. And sometimes the wording is so damn convoluted no one can understand it anyway. And a lot of authors don’t have the money to take it to an attorney and sort it all out for them. So they are faced with publishing on blind trust. Not a good thing, but I fear it’s the norm rather than the exception.

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  155. Karen Templeton
    Sep 12, 2009 @ 10:54:36

    You do realize, of course, that NY pubs pay DP royalties off the net, right?

    FYI, Harlequin pays the same royalty rate for e-books as print, both on a percentage of cover price, not net. Since the e-books have a slightly lower cover price than print (talking North American retail sales only), this means I currently see a penny less per e-book sold than for print. We’re told when e-version sales figures improve, that rate will be renegotiated. For now, though, the difference in our royalties is truly negligible.

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  156. Anonymous111
    Sep 12, 2009 @ 10:57:49

    @Moriah Jovan

    Well it should be the percentage you are promised off the full cover price of books. But when the net is tossed in, there are deductions–the cost of the publisher doing business. Then confuse the situation with distributors and authors are required to know almost as much as a publisher. I don’t want to know everything. Just enough to keep everyone honest. And isn’t it a shame I feel that way?

    Wouldn’t it be nice if everything was uniform and people just did the right thing by each other? Damn but this is getting depressing. Think I’ll write that sad scene now. lol

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  157. Kassia Krozser
    Sep 12, 2009 @ 10:58:35

    @moriah — thanks for demanding the definition of “net”. It’s important. As Jane points out, paying on actual amounts received is the trend for traditional publishers. It has to be part of the author decision-making process. As is the fact that these houses are in a take-no-prisoners mode. If you don’t give them digital rights on their terms (and that means royalty and length of contract), then there’s no deal. If, of course, you can get a contract. We’re all hearing about fewer deals as publishing houses go through a round of belt tightening. On the positive side, companies like HarperCollins are looking at epub type models/imprints.

    @ardeatine — as I stated above, the reason was that enough of the team felt going forward was not in their best interest. It has nothing to viability of the business model, which I still believe is workable, now more than ever. I really tried to find a way forward because this was not the outcome I wanted, professionally or personally, but, again, doing a bad job would have been far worse for everyone involved.

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  158. kirsten saell
    Sep 12, 2009 @ 11:46:33

    @Karen Templeton: We're told when e-version sales figures improve, that rate will be renegotiated. For now, though, the difference in our royalties is truly negligible.

    I sincerely hope you can negotiate it up instead of down, because I wonder how much bigger a slice they’ll be willing to give you once it’s a $2000 pie instead of a $200 one. And if prices for ebooks go down, that’s something to think about, too.

    I know some epubs pay on gross for direct sales and on net for sales through retailers. Samhain pays on gross for everything (and only shaves off 10% for retail), and it’s one reason I chose them. Not only does it put more money in my pocket, it makes it a lot easier to review my royalty statements and find errors when I’m not trying to figure percentages or different percentages for all the various retailers.

    But from what I gathered (and I could be wrong) QP was planning to pay on net for direct sales as well. And that, IMO, is a huge no-no, and if there are epubs doing that now, I’d advise authors to stay the heck away from them. It’s so open to interpretation–net after credit card fees, or net after editing, cover art, format conversion, damn it, net after WHAT?–it’s just enormously troubling. If net is defined as percentage left after production costs, isn’t that EXACTLY the same as Dark Castle Lords having authors pay cover models? They’re just spreading the payments out and deducting them from royalties.

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  159. Lauren Dane
    Sep 12, 2009 @ 12:17:14

    @Angela James:

    This.

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  160. Kassia Krozser
    Sep 12, 2009 @ 12:17:57

    @kristen — your understanding was incorrect. And this is why I insist that people define their terms — net is an absolutely meaningless word without proper definition. Bad information is spread and repeated when people don’t get this right.

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  161. Deidre Knight
    Sep 12, 2009 @ 12:43:33

    @AngelaJames–beautifully, wonderfully stated about being proud of what you created at Samhain. As a company owner, this is always my dream, to build a structure that is fluid and strong, not too dependent on any single one of us (myself included.)

    @discussion about net vs. retail on e-books and NYC. Actually, a number of the publishers our agency work with pay on retail, not net (although it varies, depending on the house.) Also, some publishing companies, such as those of business and educational books, or inspirational/Christian publishers or university presses build their entire model–from printed books to e-books–off of net, but the royalty rate is almost always higher in order to reflect that difference. Agents also work to define “net” in these contracts, as since it’s been noted, otherwise you can find yourself on a slippery slope.

    But the main thing is that one reason we all discuss digital issues until our fingers grow numb on the keyboard is this–it’s a rapidly changing landscape, with publishers and agents and authors and middle men, etc, all trying to figure out how it’s all going to shake out. Back in the earlier day of all this, Random House began by offering 50% of net for all e-books, but then realized it wasn’t sustainable and backed off that amount.

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  162. kirsten saell
    Sep 12, 2009 @ 12:54:05

    your understanding was incorrect. And this is why I insist that people define their terms -’ net is an absolutely meaningless word without proper definition. Bad information is spread and repeated when people don't get this right.

    Net is a meaningless word unless it’s defined. That’s why gross is simply better for authors, whether it’s 6%, 12% or 40%. Less room for error, less wiggle room for everyone. Net is just another thing that gets in between what an author and what they can expect.

    Personally, I’d rather take 12% on gross for retail sales if the publisher had to go that low, even if in some cases with some retailers that meant I’d be getting less, than having the headache and uncertainty of trying to figure out my royalty statements store by store. Because I do check every one, and I have found errors to report to the publisher–the biggest ones in my favor, but still.

    It’s the KISS thing. I’m a writer, not an accountant. When you pay on gross, the author knows exactly what she should be getting.

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  163. Denise
    Sep 12, 2009 @ 13:07:21

    Kassia,

    I think the issue of defining the terms is the sticking point. Your answers regarding the QP payment structure to authors were expansive but never stated specifically into which category all those details fit–net or gross, until you and I had a short conversation on KKB recently where you identified that QP paid on an adjusted gross basis.

    While you’ve given detail about the structure itself, I think there’s something telling when the question of how QP paid continued–and continues– to come up, and by different people. Despite your responses, some feel there is still no succinct answer to the question, thereby generating only more confusion. As you’ve asked for someone to define what they consider net and gross, I’ll forward the following (these definitions are taken from a financial glossary website called Investorwords.com. They are more succinct than what’s listed under GAAP).

    Net Income - Def. #1 – In business, net income is what remains after subtracting all the costs (namely business depreciation, interest and taxes) from a company’s revenues. Net income is also called earnings or net profit. Def. #2 – For an individual, Net income is gross income minus taxes, allowances and deductions. An individual’s net income is used to determine how much income tax is owed.

    Gross Income - Pre-tax net sales minus cost of sales. Also called gross profit.

    Net Sales - Gross sales minus returns, discounts and allowances.

    Cost of Sales - the cost of purchasing raw materials and manufacturing finished products. Equal to the beginning inventory plus the cost of goods purchased during some period minus the ending inventory.

    If I’m reading this right, because QP was a business, not an individual, its payment structure was based on Gross Income as defined above (or something very similar) – pre-tax net sales minus cost of sales and is therefore not net but gross (sometimes defined as adjusted gross). Would this be correct?

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  164. Jane
    Sep 12, 2009 @ 13:29:44

    @Denise: Net means a lot of different things to publishers. There was a thread over at absolute romance wherein Net for Ravenous Romance authors meant after distribution, promotion, and I think, even shipping and handling and so “net” is a term that has plenty of definitions not bound by GAAP or Investorwords.com

    @Deidre Knight: I was referring to the trend amongst print publishers to pay an e royalty off the ‘net as it seems like that is a push by the major publishers to create as a standard.

    Depending on one’s bargaining position, the royalty rate and terms can be very different.

    @kirsten saell: so essentially you are saying you would turn down a contract from Harlequin?

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  165. Jane
    Sep 12, 2009 @ 13:34:46

    @kirsten saell: Also, I might add that I know many a print author whose royalty statements are pages and pages long because of the differing royalties for every different format, sale, and sub license.

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  166. Denise
    Sep 12, 2009 @ 13:39:22

    @Jane: That I understand. Net is even determined differently for IRS reg purposes. I, and I think others, were trying to decipher what both and net and gross meant to QP in particular and if QP were to define it, which would they choose in regards to how they would have paid their authors.

    Kassia has asked for some concrete definitions when others referred to the terms. I’ve provided these. Based on what I’ve read of Kassia’s answers regarding this question up to this point, the structure seemed to me to align with how Gross is defined in the listing I posted above.

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  167. kirsten saell
    Sep 12, 2009 @ 13:40:03

    @Jane: so essentially you are saying you would turn down a contract from Harlequin?

    Uh, no. Harlequin pays on gross–percentage of list price.

    Although to turn down a contract from them, I’d have to send them something and get an offer. And I’d pick through their contract as carefully as I did my Samhain contracts.

    But I wouldn’t turn them down on this issue because they pay on gross. I’d know exactly what I could expect–payment of a percentage on list price (not list minus retailer’s discount, not list minus any promotional discounts retailer’s offer their customers, not list minus anything else). Percentage of list price is percentage of list price.

    I might grumble because the percentage on digital is the same as on print (which might lead me to not submit to them in the first place), but at least I’d know what to expect on my royalty checks.

    ETA: I’d also add that Harlequin different things to offer an author than an epub–print runs, huge brand recognition and readership, a solid rep, an advance on royalties, etc. All those things would influence my decision as to whether I could live with their royalties. The advance being one of the biggies–at least I’d know the least amount I could expect from them.

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  168. Jane
    Sep 12, 2009 @ 13:41:10

    @kirsten saell:

    Personally, I'd rather take 12% on gross for retail sales if the publisher had to go that low,

    just trying to comprehend all the numbers you are throwing out there as good business practice.

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  169. kirsten saell
    Sep 12, 2009 @ 13:44:24

    @Jane: Also, I might add that I know many a print author whose royalty statements are pages and pages long because of the differing royalties for every different format, sale, and sub license.

    As are mine. A different page for each format (trade or digital) of each book, with different list price for each format, and different royalty rates.

    Why make it more complicated than it is? Agents are paid on gross as well, when you want to get down to it. They get 15% off the top of the author’s earnings (sometimes a different percentage on sub rights), but it’s not after the author has factored in the cost of doing business.

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  170. kirsten saell
    Sep 12, 2009 @ 13:49:13

    The 12% is based on 35% of list price after up to 65% retailer discount. With the highest discounts being about 65%, that would give the author 12.25% or more–if retailer discount is the only factor in defining “net”.

    Personally, I’d rather not have to do the math for each retailer, even if it meant taking a hit with some.

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  171. Jane
    Sep 12, 2009 @ 13:59:50

    @kirsten saell I am assuming that you know that royalties differ, for the same book, depending on retailer such as book club, wholesale or retail, thus the whole argument of net v. gross based on whether the math is harder is illusory and frankly hardly one that makes much business sense. The net v. gross should be dependent on which entity is bearing the majority of the costs and risks not which entity is better able to do the math.

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  172. Shannon Stacey
    Sep 12, 2009 @ 14:19:15

    With more and more readers buying through FW, BoB, AMZ, etc, rather than the company store, and with the price wars they engage in and the distribution terms, I personally feel the current digital publishers are going to have to go to a contract like QP’s or go out of business eventually.

    We own an electrical/HVAC contracting business and when the GC’s are cutting our throats but our subs are still getting the same terms from us, the ledger books get lopsided very fast.

    Gross is nice. I like it, obviously. But I also like a little longevity in the publisher holding the rights to my books. And if the choice ends up being gross, but only sold through the company store, or gross on what the retail price was through FW, BoB, AMZ, etc (which, to me, is neither gross nor net, but I don’t know them fancy words) I’m thinking the latter is better.

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  173. kirsten saell
    Sep 12, 2009 @ 14:34:16

    @Jane:

    I am assuming that you know that royalties differ, for the same book, depending on retailer such as book club, wholesale or retail, thus the whole argument of net v. gross based on whether the math is harder is illusory and frankly hardly one that makes much business sense.

    Jane, the day my publisher manages to get my books into a book club is the day I can afford to pay an accountant to read my royalty statements to me. I might have him do it in iambic pentameter. :P

    Look, standard is to pay gross on list price for all regular sales. The royalty rate and list price may differ by format between hardback, trade, mass market and digital (and between direct and retail sales), but for regular sales, the method of calculating royalties doesn’t (or shouldn’t, IMO).

    Why would any publisher think that the standard of calculating royalties on regular sales of digital should be any different than on mass market?

    Or put another way, why don’t we all just switch to getting paid on net for all regular sales, regardless of format. That ought to go over well…

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  174. Lynne Connolly
    Sep 12, 2009 @ 14:54:46

    And if the choice ends up being gross, but only sold through the company store, or gross on what the retail price was through FW, BoB, AMZ, etc (which, to me, is neither gross nor net, but I don't know them fancy words) I'm thinking the latter is better.

    I’m a writer, not an accountant. I want to know what I’ll be getting after all the deductions have gone. I don’t want all this other stuff. If I have to start working stuff out, I won’t be writing, and I resent time taken away from me to do sums.
    I pay my accountant to do the sums for me, but I have to give them to him first, and he does it so I don’t have to. I have an agent, someone who will tell me how much I will get after everything has gone, but she doesn’t at present handle my ebook business. So if it gets complicated, I’ll have to ask these people to help me more.
    Just give me the bottom line. I won’t deal in net for that reason, and because “net” is as nebulous as “margin.”

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  175. Jane
    Sep 12, 2009 @ 14:58:19

    @Lynne Connolly How is “net” anymore nebulous than any other term in your contract? The contract will define what net is and any good agent or lawyer should be able to write a clause defining net clearly. Any ambiguity in a contract is read in favor of the non drafting party so it is in the best interest of the publisher to make the term “net” as definite as possible.

    Net is no more nebulous than “book”.

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  176. Moriah Jovan
    Sep 12, 2009 @ 15:04:35

    My definition of net on e-books: X percentage of monies received.

    My definition of net on print books: X percentage of monies received MINUS the cost of printing (since I’m POD, as are most e-publishers).

    That means that whatever distribution I have, the same percentage is applied. IMO, that’s pretty damned simple.

    In my case, I’ve published one literary work that I didn’t write. It is a collection of 8 authors’ work, plus four editors. Fortunately for me, they don’t want the hassle of splitting that up, but have the proceeds sent to a charity.

    And also, everything @ShannonStacey said. There is absolutely no way I could make any money paying on retail price anywhere other than my own store.

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  177. Karen Templeton
    Sep 12, 2009 @ 15:34:34

    How is “net” anymore nebulous than any other term in your contract? The contract will define what net is and any good agent or lawyer should be able to write a clause defining net clearly.

    Because the minute “net” includes any variable — as in, expenses, which change with the wind — the author has no idea what her royalties are truly based on.

    So the contract can define what items or expenses will be subtracted from gross to equal net, but there’s no way to define that in specific, monetary terms.

    We get pages of royalty statements from Harlequin, too, and the contract is more than 20 pages long. But while there are different terms for various editions — NA retail, Canadian retail, foreign retail…bookclubs, promotional, etc. — those terms are clear. Copies sold X cover price X percentage = payment. Easy-peasy. The only exception to this is when a foreign edition, or remainders, get farmed out to a subsidiary and we see 50% of the net, in my case none of which has ever amounted to more than a few bucks.

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  178. kirsten saell
    Sep 12, 2009 @ 15:42:26

    Gross is nice. I like it, obviously. But I also like a little longevity in the publisher holding the rights to my books. And if the choice ends up being gross, but only sold through the company store, or gross on what the retail price was through FW, BoB, AMZ, etc (which, to me, is neither gross nor net, but I don't know them fancy words) I'm thinking the latter is better.

    Gross is not necessarily better–that is, it doesn’t necessarily mean more money for the author.

    The epub could pay 35% net on second party sales, in which case you could receive anywhere from 12.25% (65% discount) to 17.5% (50% discount) per copy.

    A royalty of, say, 15% gross on those same sales might actually earn you less, depending on how many books sold where, but at least your expectations as far as what you’ll make are clearer.

    So I’d ask why would a pub pay “35% on net” rather than “15% on gross” for second party sales? It amounts to pretty much the same thing–one just looks like more.

    As far as discounted/book club sales and direct from publisher vs. retail sales, yes there are different royalty rates. But as far as I can tell, it’s only remainder, cheap edition, export rights, etc, that pay on net. And in those cases, the publisher may be hardly making anything at all…

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  179. kirsten saell
    Sep 12, 2009 @ 15:45:51

    Hah! Karen Templeton said it first. :)

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  180. Lynne Connolly
    Sep 12, 2009 @ 15:49:57

    How is “net” anymore nebulous than any other term in your contract?

    I am a ‘bear of very little brain.’ I just want to know how much I’ll be getting at the end of the day, not minus this and minus that. Honestly, my maths is minimal. I can’t add up a column of figures and get the same answer three times running. I just spent days making a simple list of income and outgoings for my accountant and today I have a migraine.

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  181. kirsten saell
    Sep 12, 2009 @ 15:53:57

    And I’d also like to say it’s a very slippery slope authors are being shoved down when publishers give retailers these huge discounts. It’s those discounts that allow retailers to offer books for way less than list price.

    If every online store out there can offer a publisher’s books for 2/3 or less the cost from the publisher’s site? It won’t matter what royalty the pub offers on direct-from-site sales, ’cause no one will be buying them. Both publishers and authors will end up with less of the pie.

    Of course, I don’t know what the solution is, other than to have publishers form a professional organization and fight it en masse…which will probably never happen.

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  182. Robin
    Sep 12, 2009 @ 16:44:50

    If I were an author, I realize that I’d have to accept that the business is run via contracts. And personally, I sure as heck would not want to rely on the OTHER contracting party, i.e. the publisher, to ensure that I understand my contract terms and my rights under the contract. Publishers are not employers and while it is in their interests to make their contract terms clear, is it really in their best interest to make sure the author understands every detail and consequence of those terms?

    I’m not sure asking for more simplicity in the “bottom line” is an advantage to authors in any way. Because, as Kassia has pointed out numerous times, publishers are doing these calculations and whatever an author can negotiate is going to be dependent on how the publisher structures royalty rates relative to costs and pricing. How can you really know what the bottom line number means in terms of value if you don’t know the details of the royalty calculations? It seems akin to leasing a car and paying attention only to whether the monthly payment is affordable and ignoring the interest rate, the cap costs, amortization, lease length, mileage allowances, etc., all of which must be understood to know whether that bottom line figure is a good deal and/or truly affordable in a practical sense.

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  183. kirsten saell
    Sep 12, 2009 @ 17:16:24

    @Robin:

    Look at it this way, Robin. I’m going into this knowing that retailers usually demand discounts of 50-65% on list price. So I know if I get paid 35% on net, I’m going to get somewhere between 12.25 and 17.5% per copy.

    15% gross on list price would get me roughly the same money–but it would prevent my royalties from getting smaller and smaller as more retailers decided a 50% discount isn’t enough for them.

    Plus, I wouldn’t have to spend three hours with my calculator figuring out 35% of a buttload of different percentages for different retailers, either. I’ve already done the math. I don’t want to keep doing it every bloody month.

    I’d prefer to earn 15% gross rather than 35% net because I’m aware of the vagaries of the system. It’s like locking in your mortgage for five years when interest rates are low, or one year when they’re high. No one’s going to tell me that it would be a bad idea to lock in my interest rate if prime was at an all time low. If they did, I’d call them not too bright.

    Right now, retailers are trying to gouge publishers for every dime they can, and their position to make demands only seems to be getting stronger. Their discounts aren’t going to get lower than they are anytime soon, and in many cases could get higher.

    You lock in when conditions are favorable. Now, if retailers all decide tomorrow to play nice and voluntarily lower their discounts to 30% on list price, I’m going to look like an idiot. But I don’t think so. And even if that happens, I’m still earning 15% on list–a figure I thought was fair or I wouldn’t have signed in the first place.

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  184. shirley
    Sep 12, 2009 @ 19:20:40

    @Jane:

    in regards to the comment that NY pays crap digital royalty rates:

    So? That may have something to do with why NY digital offerings are barely a ‘blip on the radar’. Digital publishers have built the e-book industry into something thriving and successful exactly because those who are still successful realized e-publishing isn’t print publishing and they built up an entirely new, and immensely effective, business model.

    Which includes paying authors a fair royalty rate, instead of using authors to support the costs of doing business – which is unbelievably cheap when compared to not only traditional publishing but any traditional business. And when I say a fair royalty rate, I should clarify that e-publishers are very aware that the chances of a single title selling ten thousand copies in a year, let alone a month (which can happen in the print world) are relatively slim. What author, other than maybe some who simply want to see their words in print, would think $.032 per copy sold (figuring 8% on a $3.99 cover price) is worth it? Especially if they may only sell a few hundred copies? Heck, even a thousand copies? Two thousand copies? That’s 64 bucks for 2,000 copies sold. Could they even afford to continue to write, professionally, for those sorts of wages? No, they couldn’t.

    Sure the houses would make out pretty damn good, but without writers to write, there’s no product to sell… I’m sure everybody knows the rest.

    E-publishers understood this immediately. IF they wanted to make their new business ventures viable, they had to start over from scratch. They did, it’s worked out fabulously, and if anything NY needs to gravitate more toward digital standards (especially in re of their products in said medium) instead of vice versa.

    In short, I guess, I don’t care if NY tries to get digital rights at their crappy royalty rate. The longer they keep messing it up, the longer I’ll get to enjoy the talented e-authors who deliver books I love to read, who are getting paid well enough to keep doing so, in a medium that is easier for old hands to enjoy. And as NY tries to woo e-authors and more and more of them either demand better royalties or don’t switch over at all, I figure with supply and demand, NY will give. Maybe a little, maybe a lot, but they’ll have to give if they want to compete.

    And the way I understand net, at least from the authors I’ve asked about it:

    Net= monies flowing away from author to support business expenses
    Gross= monies flowing toward author to support writing

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  185. Jane
    Sep 12, 2009 @ 19:26:13

    @shirley I recognize your name so I am going to assume that you’ve read the blog. If not, then I’ll tell you I have advocated for the digital publishing model time and again.

    My point was merely that it is not new epubs or old epubs that are considering paying on the net but that there is a movement for the NY pubs to move to net. I’ve actually blogged about this topic and we talked about it at the Rogue Digital Conference about how the net term is different and how more authors need to be aware of this term and what it means for them.

    It does not always mean less and it doesn’t always mean more. In other words, “net” in and of itself is not de facto a loss for the author.

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  186. Robin
    Sep 12, 2009 @ 19:48:12

    @kirsten saell: As an author, you can obviously attempt to negotiate whatever rate in whatever terms you choose with your publisher. All I’m trying to say is that all of these discussions suggest that gross is no more specific than net, when in some cases what is being called gross by pubs is really adjusted gross or gross on monies received rather than cover price, etc. So I think it’s in an author’s best interest to either be willing to do all the math involved or to consult someone who can do it, rather than rely on either a bottom line percentage or dollar figure, whether net or gross.

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  187. shirley
    Sep 12, 2009 @ 21:00:49

    @Jane:

    I know you have, which is why some of your comments seem incongruous with what I’ve seen you post before here. Some of what you ‘said’ kind of rubbed me wrong as a faithful e-buyer and e-reader. I don’t want the digital publishers to try and conform to NY standards. I can afford 3.99-6.99 for an ebook. I can’t afford, nor do I want to afford, 14.99-34.99+ for print books. And I absolutely would not pay 10 bucks for an ebook, I don’t care if it contained the recipe for the Midas Touch.

    And I kind of think it’s obvious why NY would want to push for net, especially now. Make authors cover more operating costs in the down economy. Further, I would think it would be obvious why NY would be glad to see e-publisher’s like QP trying to push net as the digital standard.

    As I said before, a full on move to net payments, especially royalties on net profit, would likely cripple epublishers because writers wouldn’t be able to afford to keep writing on nickles and dimes. And while the e-industry is ‘touted’ as still being small, it has continued to grow and grow and grow. NY has been shrinking and shrinking. And trust me, NY is noticing they’re downswing and e-pubs upswing. NY would like nothing more than for the e-pubs to go away, it means less competition in a market they would, I’m certain, love to dominate the way the big NY presses have dominated print.

    And really, definitions of net or gross… It doesn’t matter what you add to the words. Net means less costs – whatever they may be or however those are spread out. Gross means the full amount received. Some of the other gross/net pairings I’ve read here wouldn’t fly with any successful e-pub anyway because anywhere you look in authors/writers forums you’ll find that any pub that isn’t paying on cover price/list price is to be avoided at all costs.

    And I’m betting that’s why P&E, Absolute Write, and many other well respected venues where authors gather to share information and wisdom red flag entities that offer payment on net. And I hope they will continue to do so. Payments on the net are easily manipulated in favor of the business and not the employee.

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  188. Kassia Krozser
    Sep 12, 2009 @ 22:59:18

    I am a bit bemused by all these definitions of net and gross and sorta net but sorta gross. If you’ve known me for more than five minutes, you know my professional career involved all manner of royalty calculations, from the very simple to the extremely complex. I joke about the fact that I carry my calculator everywhere I go, but, hey, it does nested calculations. Plus I feel naked without it.

    First, of course, we are talking about royalties, which are generally not defined in accordance with GAAP, so while Denise’s definitions are useful (they are!), they include cost of sales, which are COGS or direct costs, and rarely included in the calculation of royalties. If we were talking about a participation, as suggested in the recent deal for Glenn Beck (I believe it was him), then they would applicable. We’re essentially talking about a percentage of receipts/revenues.

    Generally, the calculation of royalties, as several have noted, is clearly defined in the agreement, and those definitions are negotiable to a degree, which makes them all that much more fun. Still let’s try some simple examples, and I’m basing them on the QP contract. Your publisher may vary.

    Example One — Direct Sales (via website):
    Customer pays $5.99 to publisher. Author receives 35% of that amount. That’s about $2.10.

    Example Two — Third Party Sales (pick your poison):
    Customer pays $5.99 to third party. Third party remits 50% to publisher. Publisher pays 35% of that amount to author. Approximately $1.05 is paid to the author.

    Not included in these calculations (and should never be included in a royalty calculations as they are generally absorbed in the amounts retained by the publisher): editorial/overhead, distribution, storage, marketing, and any other costs, though there may be an exception for commissions or certain taxes. These are also missing print-related deductions like reserves for returns, bad debt, etc.

    The first example is best for the author and publisher. However, the second is a growing segment of the market, and needs to be factored into financial models. It also needs to be considered by authors, because as several have noted, retailers are aggressive and there is little room for negotiation on the part of publishers. However, you have to be where customers shop, and any publisher who expects readers to find their website and buy books is taking a chance. So one more example, using Amazon’s DTP program to illustrate why paying on the “cover price” isn’t necessarily optimal in the digital marketplace:

    Example Amazon DTP:
    Customer pays $5.99 to Amazon. Amazon remits 35% to publisher, approximately $2.10. Publisher pays 35% based on “cover price”, approximately $2.10. Net to publisher, zero.

    Kirsten, in various comments, has basically broken down my example two to specific percentages (35% of 50%), and while I agree that spelling out specifics in an agreement would be lovely, it’s also messy, from a contractual perspective. The publisher would have a) include all third party retailers and then b) issue amendments for any subsequent deals while c) amending for any changed terms.

    For the record, while we’re throwing around terms, many publishers define the calculations I’ve done above as “net sales” or “net receipts”. Still no costs being taken, but that’s the terminology used. I prefer “actual amounts received” (which is what is outlined in the examples above, and accurate as the retailers do not deduct any manner of distribution expenses), rather than trying to guess what each listener/reader’s definition of gross, adjusted gross, net, net receipts, net sales might be. I think I’ve been consistent in my phrasing.

    So yes, when someone says “net”, I say define your terms. I did this stuff for far too long, and if I ever said “It’s a standard net calculation”, it was only because the other party involved had a clear understanding of what was meant that phrasing. So far today, I’ve seen many different definitions of what might be meant by a term I never used (anyone who knows me knows it’s like pulling teeth to get me to use the word “net” all by itself). People have “heard” that we intended to pay on net, but from whom? And what did that person mean?

    It’s moot from my perspective, but perhaps highlights a bigger issue: anytime someone says “net”, it should be clearly defined. There are publishers who charge expenses before calculating royalties, and maybe that’s cool for you. It’s your career. But you should know what someone means when they use these terms.

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  189. kirsten saell
    Sep 13, 2009 @ 01:34:10

    I think every digital publisher pays more for sales direct from their website than they do on those from other retailers. Samhain’s percentages are 40% of list price on MBaM sales and 30% of list price on all other retailers’ sales.

    This does mean a publisher like Samhain will earn less on sales from retailers like Amazon who demand a 65% discount than they will on those who demand a much more reasonable (but still, ouch!) 50%. And yes, that sucks for the publisher. It sucks to put in all that work and make a measly 5% while the retailer rakes in 13 times that amount.

    However, publishers are the ones who negotiate with retailers. Publishers (and yes, Amazon’s got them by the short and curlies) are the ones who decide “will we or will we not hand over 65% of our money to these assholes?”.

    And the more you give them what they want, the more they’ll take it and grow fat on what they take directly from your plate–both in the form of those discounts, and in your own decreased direct sales as retailers bite the hand that feeds them and undersell the very people supplying them with those books.

    And as they get stronger, the publisher gets weaker and weaker. The authors are helpless. They have no negotiating power (real or theoretical) with these retailers. They have no power to make the decision, “Will I make my book available to these assholes?” So why should they take the same hit the publisher does?

    Here’s a scenario for net I might be able to live with:

    35% on net from the pub’s site: Customer pays $5.99 to publisher, author gets 35% of that amount, about $2.10.

    50% on net from retailers:

    Customer pays $5.99 to third party, third party remits 50% of that ($3.00) to publisher, author gets 50% of that ($1.50) (better than a buck-five)

    Customer pays $5.99 to Amazon, Amazon pays publisher 35% of that ($2.10), author makes 50% of that ($1.05) (better than $.73)

    But I’ve gotta say, after all this discussion of net royalties and retailer discounts, I’m seriously starting to think about sending flowers to Crissy Brashear. Or chocolate. Or wine. Or my firstborn. Because 30% on gross in this industry is freaking blammo. Maybe I’m spoiled, but I’d like to stay that way…

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  190. Anonymous111
    Sep 13, 2009 @ 05:53:05

    Wow! Stop monitoring this discussion for less than 24 hours and an author will come back broke! And out of business!

    I’ve never seen so much confusion over net and gross. Authors are independent contractors and should not have to endure the cost of doing business. Sure, they are in partnership with publishers, but in so far as one cannot exist without the other and that’s it.

    If a publisher promises an author a 40% royalty and the book costs $6.99, the author should expect to see $2.80 for every book sold from that publisher’s site. When a publisher receives a check for whatever amount earned from each distributor for that same book, the author should expect that publisher to cut h/her a check for 40% right off the top. Yeah, there are negotiations with distributors and greed is working overtime, but an author is not an accountant and not a publisher, should not need to carry a calculator with them and not want to. Sure, they can do the math if need be, but should not have to. It’s not an author’s responsibility and whatever amount the distributor charges is the cost of doing business with the publisher.

    But all that is just too simple, isn’t it?

    The problem with all this net vs. gross is that too many people are trying to find too many ways to pay authors less. Publishers can’t squeeze anything out of distributors, so they squeeze it out of authors. And distributors don’t give a damn. Someone said we needed a professional organization to intercede on our behalf and also said it would not happen (paraphrasing here). I agree. We have organizations in place already that could do this, but won’t. They worry more over big splashy conventions than anything else.

    But at the end of the day, net and gross meant the same thing it did yesterday. Distributors and publishers are just muddying the waters.

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  191. Oh Em Gee
    Sep 13, 2009 @ 08:51:45

    Massive speculation about this is inevitable, no matter what. If there are aspects that can’t be discussed, then perhaps radio silence is better than shadowy explanations that, frankly, most people aren’t buying.

    Constant revisions of a financial plan are smart and necessary. But to suddenly shut down operations two weeks before the grand opening and to blame the financial plan…let’s just say there’s something fishy in the water and we all smell it.

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  192. Annie Mullin
    Sep 13, 2009 @ 14:09:50

    @Mora:

    but I haven't found many non-erotic romances through other epublishers that work for me. There are only three companies I can think of that even offer them-Samhain, Wild Rose Press, and Cerridwen.

    Dancing Fools Press does. :) The first book we released this summer is a non-explicit m/m mystery/romantic suspense and we have two (also non-explicit) romance anthologies (m/f and m/m) coming out later this year.

    Annie Mullin
    Publisher
    Dancing Fools Press

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  193. Robin
    Sep 13, 2009 @ 14:45:01

    Re. non-erotic epresses that do Romance, try Drollerie. I recently read the novella “Over Her Head” — definitely a sweet Rom — and need to write my review (I liked it!). But their cover art is beautiful, they offer a multitude of formats, the books I’ve seen from them have been well-written AND edited, and, drum roll please, NO DRM!!!

    They’ve even published a novel by Michael Boatman, who played Carter on “Spin City.”

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  194. GrowlyCub
    Sep 13, 2009 @ 16:30:32

    Kassia,

    nice try aiming to deflect from the issue at hand by implying those of us not happy with the so-called ‘explanations’ are looking for sensational scandal.

    I repeat: You got lots of hype from respected people, you expected us to be wowed and trust you and now it’s ‘sorry, no can do’ with some bullshit vague blah blah.

    Let’s just say, I sincerely hope none of you ever try your hand at e-publishing again. And what I’m the most annoyed about is that this unprofessional behavior has now made it harder for any other e-pub start up that might want to try to do a good job for readers and authors.

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  195. Robin
    Sep 13, 2009 @ 22:11:04

    I repeat: You got lots of hype from respected people, you expected us to be wowed and trust you and now it's 'sorry, no can do' with some bullshit vague blah blah.

    I was one of the people cheering very loudly for QP, but I don’t ever remember them going around trumpeting themselves as the latest and greatest. I was incredibly excited when I heard about QP, because I’ve been reading Kassia’s Booksquare for as long as I can remember, and that led me to Kirk Biglione’s Medialoper, and between them there is so much knowledge and intelligence about digital technologies and publishing in general. And I retain my respect for the talent represented among the QP principals.

    That doesn’t mean anyone else should automatically trust or respect them, or that hard questions aren’t going to be asked (I had several online conversations about transparency with Don Linn, so I certainly understand and share the curiosity about why it didn’t work), but I also don’t think it’s completely fair to indict the QP folks for the praise I, for example (I won’t speak on behalf of anyone else), publicly heaped on them.

    I've never seen so much confusion over net and gross. Authors are independent contractors and should not have to endure the cost of doing business. Sure, they are in partnership with publishers, but in so far as one cannot exist without the other and that's it.

    More specifically, though, authors are giving control of rights they would otherwise own to publishers in exchange for monetary compensation. At the most basic level, authors can publish their own work autonomously, but publishers cannot produce and distribute work they do not have the rights to. So the party who, theoretically, should be in the power position, has, in many cases, come to see themselves as powerless and at the mercy of publishers. IMO, the more authors know about how publishers calculate royalties, that is, the more they understand how the publishers are valuing the rights authors grant them, the more negotiating power you will have in the long run. Or, in the short run, the more incentive to band together in some kind of engaged advocacy for your own interests.

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  196. EditorWoman
    Sep 19, 2009 @ 05:07:34

    Don Linn quote: I've also been active making sure the company is adequately funded for both good times and bad (it is).

    http://quartetpress.com/blog/about-quartet-press/another-look-under-the-hood-of-the-startup-more-than-a-feeling-edition/

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  197. Anonymous111
    Sep 22, 2009 @ 09:43:39

    I remember that blog. Just read it again. It was all systems go, full steam ahead
    on August 21, and plenty of money to fuel the process. And on September 9, the propulsion jets came to a grinding halt. Nineteen days later?

    Wonder why anyone questions why so many people have questions? Or why
    anyone would think this does not damage others who want to go into DP.

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