Hello Again,
Quick replies before an afternoon meeting I have...
thothguard51: This should be taken as meaning that I as the publisher will put up the funds or coordinate the talent to be sure that all Cost of Goods and Services are performed properly.
For TZPP on the profit share model, everyone is on the model from the artist to the editor.
We define Cost of Goods as: eBook retailer "distribution" which is currently 30%, ISBN x3, Copyright registration, and Barcode. There items create a 19 unit break-even benchmark at which point everyone else begins to earn.
We define Cost of Services as: Managing Editorial (Registration, Production, Design, Copy Edits, Proofing, Galley Review, Backmatter, and Indexing if needed, etc), Editorial, Marketing, Research (our panel readers), and Sub-Rights Sales. All of my staff are on contracts that pay them a percentage of sales ranging from 1-20%. The qualifier is that COSS is limited to a max of 50% of the Gross After COGS. So there is a limitation on this, the staff members aren't billing a fee or something like that.
Royalties are based on net sales after COGS and COSS are paid. This is paid to the Artist at 10-15% and Author at 50%, and Publisher at 35-40%.
So using KISS: Assume eBook priced at 7.99 with sales of 250 units -- At 7.99 break-even is 12 units sold
Gross Revenue: 1997.50
(Total COGS): (663.25)
Gross after COGS: 1334.25
(Total COSS @ 50%): (667.13) -- split between 11-12 staff
Net after COSS: 667.13
Artist Royalties @10%: 66.71
Author Royalties @50%: 333.56 -- $1.34/unit sold in royalty.
Gross Profit (Loss): 266.85
This is how we account under the PS model. >> No coffee and beverage service, but it you think I can get away with adding that in let me know. <<
You can take a look see at the full contract at http://trgmholdings.com/contract-boilerplate/ and read through all of the provisions, but there is a provision that allows an Author to terminate and revert rights back if sales fall below 25 units on an annual basis is they would so like, we frequently increase this to 100 units at the Authors request. The Grant of Rights is for the life of the copyright. Again this reflects our view of working with an author over the long term.
>> I would rather not publish a full length work that I was not the exclusive publisher of.<<
As far as the rights go. The only way we can help build our reputation, and that of our authors is by doing good work and hopefully making some books sales, and by licensing any other rights that they have given us. If we don't have them, we can't even attempt to do that. In my experience thus far, authors seem to be mostly of two minds, they either have no problem with giving full rights, or they only want to give US English hardback & trade paperback print rights and try to fight me tooth and nail about eBook rights. There are a few who are more cautious about their rights and have suggested a time limit on when TZPP has to have licensed or be in talks to license their rights, usually we negotiate that term to 3-5 years after publication with option to re-evaluate whether to renew that portion of the contract at that time.
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Round Two: We were under the impression that if you pay a professional advance that it should conform to the SFWA/MWA/HWA/RWA standards for author payments, which is $0.05 per word. That is why and how we make our assumptions where advances are concerned.
>> This is not an unreasonable payment schedule to me, and I really don't have qualms paying it. We've paid as high as $0.10 per word for work. But committing to that model is expensive. <<
I also think that you and I work off of different models and this can be a result of who we work with in the industry, which would account for our differing numbers.
+++
Hi Old Hack: Are my charms working yet?
My investors have no qualms funding the Bonus for making the bestsellers list The marketing usefulness of making the list in their eyes, and in mine, far outweigh the cost in the long term, again we work on the assumption that the author will be with us exclusively, or non-exclusively for years. We purposely left that definition of format undefined, but we do interpret this as a "If your name appears period, it triggers this provision" We would not account for each format separately, and one would not be able trigger this clause more than once for the contract, that is once for 5.1 and once for 5.2. Originally it was written as an Advance Against Royalties, but we changed it to a strict Bonus after significant criticism from Authors and Agents who have reviewed the contract.
We don't pay for reviews, but we could pay for reviews by professional review services.
I fully appreciate the cost in getting books into bookstores, my head hurts every time I think about the logistics. But yes, I have asked Michael to push with Ingram/B&T for the right relationship which would be of most benefit to us, as well as trying to locate a publishing partner or agent in the UK over the next 6-9 months.
>> I think that under-capitalization is a serious concern for any publisher, it certainly is for me. The profit share model is one that made the most sense to me and that I was able to get past my investors. I also think that a lot of how we arrive at the numbers that we do comes from who we work with and what their experience has been. My investors absolutely color my views and focus, and the numbers that we arrive at. But this form and how we account for it, was the most "fair" situation that we could develop. The break-even is low enough that we can see tangible results, and the areas where costs could be horrendous are contained. I suppose it is possible that accounting numbers and limits could be added into the contract to legally insure the Author that we were limited in how much is accounted for COSS....but even then would that be a viable answer for you? <<
+++
kaitie: Our original contract had scaling royalties from 5% - 15% on All formats under our Advance model. The flat model reduces accounting costs and makes audits simpler. My goal is to be transparent with how we operate, a flat rate makes that a reality. >> One of the reasons I am here. <<
Quick replies before an afternoon meeting I have...
thothguard51: This should be taken as meaning that I as the publisher will put up the funds or coordinate the talent to be sure that all Cost of Goods and Services are performed properly.
For TZPP on the profit share model, everyone is on the model from the artist to the editor.
We define Cost of Goods as: eBook retailer "distribution" which is currently 30%, ISBN x3, Copyright registration, and Barcode. There items create a 19 unit break-even benchmark at which point everyone else begins to earn.
We define Cost of Services as: Managing Editorial (Registration, Production, Design, Copy Edits, Proofing, Galley Review, Backmatter, and Indexing if needed, etc), Editorial, Marketing, Research (our panel readers), and Sub-Rights Sales. All of my staff are on contracts that pay them a percentage of sales ranging from 1-20%. The qualifier is that COSS is limited to a max of 50% of the Gross After COGS. So there is a limitation on this, the staff members aren't billing a fee or something like that.
Royalties are based on net sales after COGS and COSS are paid. This is paid to the Artist at 10-15% and Author at 50%, and Publisher at 35-40%.
So using KISS: Assume eBook priced at 7.99 with sales of 250 units -- At 7.99 break-even is 12 units sold
Gross Revenue: 1997.50
(Total COGS): (663.25)
Gross after COGS: 1334.25
(Total COSS @ 50%): (667.13) -- split between 11-12 staff
Net after COSS: 667.13
Artist Royalties @10%: 66.71
Author Royalties @50%: 333.56 -- $1.34/unit sold in royalty.
Gross Profit (Loss): 266.85
This is how we account under the PS model. >> No coffee and beverage service, but it you think I can get away with adding that in let me know. <<
You can take a look see at the full contract at http://trgmholdings.com/contract-boilerplate/ and read through all of the provisions, but there is a provision that allows an Author to terminate and revert rights back if sales fall below 25 units on an annual basis is they would so like, we frequently increase this to 100 units at the Authors request. The Grant of Rights is for the life of the copyright. Again this reflects our view of working with an author over the long term.
>> I would rather not publish a full length work that I was not the exclusive publisher of.<<
As far as the rights go. The only way we can help build our reputation, and that of our authors is by doing good work and hopefully making some books sales, and by licensing any other rights that they have given us. If we don't have them, we can't even attempt to do that. In my experience thus far, authors seem to be mostly of two minds, they either have no problem with giving full rights, or they only want to give US English hardback & trade paperback print rights and try to fight me tooth and nail about eBook rights. There are a few who are more cautious about their rights and have suggested a time limit on when TZPP has to have licensed or be in talks to license their rights, usually we negotiate that term to 3-5 years after publication with option to re-evaluate whether to renew that portion of the contract at that time.
+++
Round Two: We were under the impression that if you pay a professional advance that it should conform to the SFWA/MWA/HWA/RWA standards for author payments, which is $0.05 per word. That is why and how we make our assumptions where advances are concerned.
>> This is not an unreasonable payment schedule to me, and I really don't have qualms paying it. We've paid as high as $0.10 per word for work. But committing to that model is expensive. <<
I also think that you and I work off of different models and this can be a result of who we work with in the industry, which would account for our differing numbers.
+++
Hi Old Hack: Are my charms working yet?
My investors have no qualms funding the Bonus for making the bestsellers list The marketing usefulness of making the list in their eyes, and in mine, far outweigh the cost in the long term, again we work on the assumption that the author will be with us exclusively, or non-exclusively for years. We purposely left that definition of format undefined, but we do interpret this as a "If your name appears period, it triggers this provision" We would not account for each format separately, and one would not be able trigger this clause more than once for the contract, that is once for 5.1 and once for 5.2. Originally it was written as an Advance Against Royalties, but we changed it to a strict Bonus after significant criticism from Authors and Agents who have reviewed the contract.
We don't pay for reviews, but we could pay for reviews by professional review services.
I fully appreciate the cost in getting books into bookstores, my head hurts every time I think about the logistics. But yes, I have asked Michael to push with Ingram/B&T for the right relationship which would be of most benefit to us, as well as trying to locate a publishing partner or agent in the UK over the next 6-9 months.
>> I think that under-capitalization is a serious concern for any publisher, it certainly is for me. The profit share model is one that made the most sense to me and that I was able to get past my investors. I also think that a lot of how we arrive at the numbers that we do comes from who we work with and what their experience has been. My investors absolutely color my views and focus, and the numbers that we arrive at. But this form and how we account for it, was the most "fair" situation that we could develop. The break-even is low enough that we can see tangible results, and the areas where costs could be horrendous are contained. I suppose it is possible that accounting numbers and limits could be added into the contract to legally insure the Author that we were limited in how much is accounted for COSS....but even then would that be a viable answer for you? <<
+++
kaitie: Our original contract had scaling royalties from 5% - 15% on All formats under our Advance model. The flat model reduces accounting costs and makes audits simpler. My goal is to be transparent with how we operate, a flat rate makes that a reality. >> One of the reasons I am here. <<
