Hello All,
Happy Friday! Anything in >> words << are my personal opinions. Please find your answers below:
Anarchic Q: This is the except of the contract that we are currently offering, I just made sure to update it on TRGMHoldings.com and this is the direct link:
http://trgmholdings.files.wordpress.com/2013/06/imprint-spa-20131.pdf
AUTHOR COMPENSATION
5. Publisher Commitment. Publisher agrees to fund the Costs of Goods, Services, and Production to allow for the proper and professional development of the Work in preparation for publication. This risk will be undertaken directly by Publisher on behalf of Author.
5.1 In the event the Work appears on the New York Times Bestseller List the Publisher shall pay to the Author, as a bonus, $5,000 USD for first appearance of the Work and $1,000 USD for each subsequent appearance of the Work up to a total of $10,000 USD.
5.2 In the event the Work appears on the Publisher’s Weekly Bestseller List the Publisher shall pay to the Author, as a bonus, $5,000 USD for first appearance of the Work and $1,000 USD for each subsequent appearance of the Work up to a total of $10,000 USD.
6. Royalties on Publisher’s Editions. For each Edition of the Work published by Publisher under this Agreement, Publisher shall credit Author’s account with the following royalties on Net Revenues (all revenues are paid in USD):
6.1 15% (fifteen percent) of the Net Revenues on Net Copies Sold of any Edition, not electronic.
6.2 50% (fifty percent) of the Net Revenues on sales of electronic Editions sold.
6.3 United States Generally Accepted Accounting Principles (US GAAP) defines Net Revenue as the Gross Revenue minus the Costs of Goods, Services, and Production.
7. Reduced Royalties on Publisher’s Editions. For any and all sales of the Work in any Publisher’s edition at discounts greater than 55% ; nonreturnable sales; and bulk, premium, and other special sales; Author’s royalty shall be 15% (fifteen percent) of net revenues paid in USD.
8. Author’s Share of Revenue from Licensing of Rights. Publisher shall credit Author’s account with a royalty equal to 50% (fifty percent) of all Net Revenues actually received by Publisher for the exploitation or disposition of any and all rights in the Work by third parties under license from the Publisher. All monies shall be paid in USD.
Because all of the imprints work off of the House Contract, if James for example feels that he would like to publish your work, he would bring me on, and I would offer you the contract and negotiate the terms with you directly or with your agent or attorney. But to clarify these terms in brief: #5 Says the Publisher will commit to the work, you will get a bonus if you make the Bestsellers list. #6 That royalties are 15% on print books, 50% on eBooks. #7 only comes into play if a retailer or other sales channel takes a discount greater than 55%. On print books, the discount is currently 55% at Amazon and the other major retailers. So not really a loss here at all. #8 lists the 50/50 split for any rights that are licensed.
It is important to note that All authors are signed to The Zharmae Publishing Press and that their contracts are with the House, the Imprints are merely DBA's. So all additional services are provided by TZPP to all the imprints equally.
I have always been upfront about the fact that we ask for full rights in our contracts. It doesn't mean that we always get them, but we will ask. And I always say that it is good to weigh the realities of your ability to license your own rights. If you don't have an agent, and you don't give us/anyone the opportunity to at least attempt to license them on your behalf, they basically sit there and go unused.
>> Which is a waste, especially as if you are doing your job as the author correctly you are networking yourself and your book, and writing your next book ALL the time. You don't have the time to worry about subsidiary rights. If you got an agent they would be signed over to them just the same. If you sold the options to a movie producer, they would OWN all of the rights. You got to get them doing something sooner or later.<<
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Round Two: The numbers that we work off of are $14.95 Trade Paperback, and $4.99 eBook on the low end (though most of our eBooks are front-listed at $7.99) and $0.05 per word when determining minimum advance -- often times an author or agent will have a number in mind that they want to see which can be as high as $0.10 or $0.15 per word for a mid-list author which solid sales. A 5,000 off-set print run is about $8,700, you have to take into account that at 75k-125 words, our books are much longer then some others who will publish 40k or 50k word manuscripts, and thus we are looking at 400-800 page print books which increases the price and if the book is not divisible by 16 will again increase the price per unit.
You also missed drop shipping charges as books usually have to go to a myriad of locations, from Ohio to almost anywhere in the US (not including Hawaii), a box of 40 will cost $20-30 in shipping charges. Not to mention the loss we take on free and review galleys sent to book reviewers and other, who are not obligated to review the book, and even if we pay for it, may not provide a favorable review.
Earning out the advance just means that the Author is paying back their debt to the Publisher. It is not meant to be applied to other costs, and when do the accounting it is paid back into an Author Advance fund, not to the publisher's coffers. When you get down the the real numbers via cost accounting and GAAP the advance will not earn out until the book has sold at least 5,000 units.
The $50,000 is a marketing/PR fund for the book and is not a part of the cost of production or distribution, but is a part of the accounting of the book. This the cost of the people that have access to the right contacts who can help move large quantities of books.
Dont' forget to add in Registraction, Returns, Artwork, Production, and Human Capital costs when you are looking at the full numbers and then you'll have a very clear understanding of why I have made the decision to move TZPP entirely onto the profit share model. It reduces everyone's risk.
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Hello Old Hack: Always a pleasure!
When I say distribution, I mean distributing our books directly into the main eBook retailers, and committing to small print runs and shipping (distributing) them from our offices in Los Angeles. Fullfilling orders direct to consumers and bookstores that order from us. With books, unless your monthly sales are at or above 100 units per month, a Distributor like BookMasters ends up charging you just enough that you loose money working with them. Which is the case for us, cause me to sever our relationship with them. Going this route allows us to better control the cost while still being able to provide the formats that consumers request and the psychological boost that an author gets from holding their print book in hand.
We already have Publisher accounts with Amazon, B&N, Kobo, Google, and Apple, and will be expanding into other areas over the next several months. We should be large enough in terms of back-list catalog by next year to open a direct account with Ingram and Baker & Taylor for our print books.
Right now under the profit Share model, an author whose book sells 250 units can anticipate a royalties check of around $335. Because of the need to bring my staff onto salary as soon as possible we are working up to an average goal of 2,500 units sold per book which would see an author net about $3,500 which is generally in-line with standard advances, now once we go beyond this, the author whose book does better will see an above average return on their work.
Regarding your notion that advances make a profit, they don't. Of the 200,000 books published in the English language annually, 10% will break-even, of that, less than 2,000 will earn anything over their total cost of production, anything ranging from a few penny's to millions. When I am able to produce a quality book for $5,000 and the largest cost of producing that book is the Advance and the Artwork, and a combined $4,500 I would suggest that the Advance is a significant portion of the cost of the book.
First an advance is negotiated on the assumption of $0.05 per word, then we factor in all of the cost of production and the assumed FRONT-LIST earnings of the book. The advance should never exceed 20%, but we try to negotiate that down to 8% max. When people mention that an advance motivates a publisher to sell more books, they may be thinking in terms of the publisher attempting to meet their production costs. You have to remember that GAAP allows a publisher to pay back their cost of production before ever accruing royalties to an author or profits to the publisher. I know this is why how a royalty structure is developed makes the difference.
Why, in your experience, has the profit share model not worked? We're not going away from this model, but I would like to be able to better understand your thoughts on this, perhaps take any insight for use.
That is your own view and I completely respect that. I hope that we will be in a better position going forward to prove you wrong, and perhaps one day to gain your approval.
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dondomat: One thing that we decided early on was that we would not engage in title auctions. That is the main benefit of simultaneous submissions, you the author are pushing a publisher to make a quick decision to buy, and then to offer an advance that will be high enough to be accepted by you over the offers of others. I'm more interested in developing a long relationship with an author who is good to amazing, and who can consistently produce quality work. And I would venture to say that our contracts reflect that philosophy. I cannot speak for other Houses and why why choose to operate as such.
>> I am well aware that much of work submitted to us is simultaneously submitted, but I won't be rushed in making an acquisition decision nor will I allow my editors to be rushed. An author who tells us they have done so is wished well and simply removed from our consideration submissions log. I don't care if you submit to 100 publishers and TZPP at the same time, just don't tell us. I have lost out on 6 authors because it wasn't until we offered a contract to them that they told us they had another pending offer and wanted to hear our counter offer. If you submit your work to a publisher, it really should be because you want to publish with them and develop a relationship with them. <<
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As always I look forward to feedback, and I will be back here in a bit. I hope that my answers have helped shed a little light on your concerns...or possibly caused more.
NOTE: The imprints are getting up and running and James has been very eager to connect with Fantasy Authors, so please forgive him if he is a little overzealous in his methods.
If you have any questions comments or concerns please feel free to email them to me at
[email protected] read my personal thoughts at
www.travisgrundy.com or send me questions on Twitter @traveo2343 OR @TZPPbooks -- If nothing else you can find and interact with me.