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The Zharmae Publishing Press

Bicyclefish

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There's an updated boilerplate contract -- Imprint Standard Publishing Agreement (UPDATED 10 August 2013) -- on their TRGM Holdings site:

2. Grant of Rights. Author, on behalf of himself and his heirs, exclusively grants, to Publisher and its licensees and/or successors, rights to the Work. This Exclusive Grant of Rights is for the full term of those copyrights (and any and all extensions and renewals thereof) as granted in Exhibits 2 & 3.
3. Territory. The rights granted to Publisher in this Agreement may be exploited throughout the universe.
4. Term. The rights granted to Publisher in this Agreement may be exploited for the life of the copyright.

[...]

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 50% (fifty 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.
6.3.1 Costs of Goods are defined as: Retailer Freight (Distribution Charges), Copyright Registration, International Standard Book Number (ISBN), and Barcode.
6.3.2 Costs of Services and Production are defined as: Managing Editorial, Copy Edit, Proofing, Review, Cover and Interior Design and Typography, Editorial, Marketing, Research, and Sales.
6.3.3 The Costs of Services and Production will not exceed 50% of Gross Revenue after the Costs of Goods have been satisfied.​
I'm not as contract savvy as some but that doesn't sound good to me.
 

thothguard51

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1...Clause #3, Why does this publisher need the term Universe in the rights grant? Are they selling off world copies? Who translates those books? I would feel better if the territory rights were clearer, you know; North America, South America, Europe, Asia, Africa, etc, etc. After all, this is publishing on Earth and not the manufacturing of universal widgets...

2...Clause #4, Exploited for life of Copyright? Copyright goes to the author, right? Copyright is what, 70 years? I don't understand why the clause is not listed as term of contract.

The term exploited may be somewhat correct but it makes me feel like the author is going to get used...

3...Still not happy with clause 6 and its subclauses. The author has no way of knowing what these cost may be prior to signing a contract. I have seen/read too many accounts that after these profit sharing cost are deducted, the authors share of royalties was pennies on the dollar, if anything at all. As Victoria said, it will take a long time for the author to earn out, not to mention the artist, designers, and editors to also earn out.

From what I am reading, management is the only one who will earn a steady profit, based on the number of authors it signs up and books published.

To me, this implies that the publisher has no confidence they will be able to sell more than the minimum sales per title needed to break even.

To me, this reeks more and more of an author mill, even if the publisher is turning authors down. Why? The more genres they represent, the more authors they can sign, and thus management is the one making a profit on minimum sales.

Nothing wrong with management making a profit. If not they would not be in the business. I am just not comfortable with this profit sharing model with this type of contract. But that is me...

Good luck to those who do sign. Let us know in about a years time how sales are going how the profit sharing is working...
 

victoriastrauss

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Hm. Zharmae seems to have made some changes to its Imprint Contract. The Agency clause has been re-worded so that it doesn't hand the author's agent extra representation rights, and the reversion clause has been slightly amended:
39.3 Reversion by Author Request. If sales of the Work fall below one hundred (100) units for the fiscal operating year of the Publisher, Author may request that Publisher revert the rights of the work to the Author, not to be withheld by Publisher.
It's still a trifle vague for my taste, but it does suggest that if sales fall below 100, and the author makes a reversion request, the publisher won't withhold it.

These are good changes. But IMO, there are still problems, including an overly sweeping claim on subsidiary rights, net profit royalties (for me, that alone would be a deal-breaker), and the option clause that binds the option book to the same terms and conditions.

- Victoria
 

victoriastrauss

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1...Clause #3, Why does this publisher need the term Universe in the rights grant?
It's stupid, but you do see this kind of wording in publishing contracts. Really, what they're asking for is world rights--that's all they need to say.
2...Clause #4, Exploited for life of Copyright? Copyright goes to the author, right? Copyright is what, 70 years? I don't understand why the clause is not listed as term of contract.
Because life of copyright is the term of the contract.

A fixed-term contract is preferable if you're going with a small press, IMO--if only because so many small presses stay in business for such a short time, and if you have a fixed-term contract and your publisher goes belly-up without returning your rights, the contract expiration will eventually set you free. Again IMO, a reasonable fixed term is 3 to 5 years.

But life-of-copyright, which is the norm in the big publisher world, and common as well in the small press world, is not a problem as long as there's a detailed reversion clause that ensures that rights return to the author once the book stops selling. If rights automatically return to the author when sales fall below (for instance) 100 copies sold in the previous 12 months, the publisher can't sit on a book it's doing nothing to promote, and the author will be able to regain his/her rights and do something else with them.
The term exploited may be somewhat correct but it makes me feel like the author is going to get used...
It does have unfortunate connotations, but this is standard publisher-speak.
3...Still not happy with clause 6 and its subclauses.
I'm with you there.

- Victoria
 

Torgo

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But life-of-copyright, which is the norm in the big publisher world, and common as well in the small press world, is not a problem as long as there's a detailed reversion clause that ensures that rights return to the author once the book stops selling.

Requoting for emphasis. Life-of-copyright is not unusual or exploitative so long as there's a good reversion clause.
 

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Requoting for emphasis. Life-of-copyright is not unusual or exploitative so long as there's a good reversion clause.

Which there isn't.

Exactly.

Even if there were no other problems with this press, this one issue is enough to make them a very poor choice.
 

traveo2343

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Hello All,

I'm glad to see everyone is as active as normal. I did want to say that I very much enjoy chatting with you all, my personal thoughts about TZPP contract aside >> I of course think it's too author friendly - but I wouldn't be a good business man if I thought otherwise :) << I do like the frankness with which you play Devil's Advocate.

I do hope that you will all eventually learn to love TZPP - and our contract, just the way we are. I do think that we are now in a wait and see mode. Much to my chagrin, and due in large part to our on-going discussions several of our most promising authors have decided to wait 3-6 moths while our first onslaught of title publications launch this year beginning in early November. I'm confident that come February we will be able to show significantly stronger sales as we fully implement our marketing program.

I would like to note, that any authors who do choose to publicly discuss their Royalties earnings, won't be in a position to do so until May/June 2014 after we pay royalties and conduct our audit.

For all who have issues with the words universe and exploit: Universe technically give us the legal right to sell books on Mars, and alleviates the need to renegotiate such rights should they become active in the near future :) -- It is in effect World Rights, and when asked we will reduce the grant from Universe to World Rights. And as far as exploit, this is a legal term of art which means to sell, not in any way meant to be negative -- you want your work to be exploited, it means larger royalties for you.

+++

hothguard51: I'm not entirely sure how you (or Victoria) figures that there is not enough information for an author to determine what the hard value of the Costs of Goods will be prior to signing the contract.

We did discuss the hard costs of COGS -- all of which are publically available at third party locations as far as cost:

Retailer Freight (Distribution Charges): https://kdp.amazon.com/self-publishing/help?topicId=A29FL26OKE7R7B
Copyright Registration: http://www.copyright.gov/help/faq/faq-register.html#fee
International Standard Book Number (ISBN) https://www.myidentifiers.com/isbn/main
and Barcode: https://www.myidentifiers.com/barcode/main

These would give you higher end numbers that don't take into account our direct relationships and capabilities which we can leverage often times to reduce those costs.

We have also detailed minimal price points at which we would sell a book - to keep the numbers simple - in eBook format or USD$4.99 -- you could extrapolate that over contractual minimal numbers of 100 units per year and begin running through the math To give you absolute minimal and rough guesstimates. I have said before that for our purposes an author will begin to earn royalties on their work after 19 units have been sold.

So, please forgive my ignorance, but I fail to see how this too vague for an author to make an informed decision, unless of course an author had a lingering concern about their work's ability to sell 19 units...

+++

Victoria: A pleasure as always, I do hope that you noted the limitation on Secondary Rights in Exhibit 3 which, as written, does in fact, limit TZPP to a 5 year exclusivity, which the author has to grant a renewal of.

I will say publicly that Exhibit 2 does represent items that TZPP has the direct relationships currently in place, or which will be solidified in the next 6-12 months, to exploit on our author's behalf. I gather that you have often criticized my asking for such rights when I have not sold such rights, but my counter is always the same, I can ask for the rights, and without being granted such rights, I have no means of pursuing the licensing of those rights to the author's benefit. So I will continue to ask for the rights, and in my quest to make the boilerplate as author-friendly as possible, I have place limitations on certain aspects of the general grant.

+++

Torgo, veinglory, and Old Hack: >> I hope you are well Old Hack ahd enjoying a British Summer :) << The reversion clause as re-written was based on your feedback and does in fact place a minimal sales requirement on TZPP of at least 100 units per year, so that at a minimum an author has a gaurunteed royalty they can expect so long as we meet the annual contractual sales level. Further the reversion clause is one which is available to the author every year. And much to the vocal opinion of my investors is not something, contractually, that I can withhold if asked for by the author.

I imagine that you would prefer the reversion be a auto-revert clause should the sales fall below the pre-determined threshhold, but that would be counter to TZPP Author Relations intent which is to work exclusively with the author over the duration of their career. The onus is thus placed on the Author to sever the relationship.

+++

All in all, I do think that this is a decent contract that most authors would enjoy working under, obviously for some it will be far to onerous, but for most, especially those that do work with us, they enjoy working with us.

As I mentioned previously we are really in a wait and see mode, I will not be changing this version of the contract until mid-2014 at the earliest, if and when I do, I will most certainly come here for feedback in modifying the terms of our contracts.

I do hope that everyone is having a wonderful start to their Labor Day Holiday weekend.

Best,

Travis
 

Round Two

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Hello All,

Much to my chagrin, and due in large part to our on-going discussions several of our most promising authors have decided to wait 3-6 moths while our first onslaught of title publications launch this year beginning in early November.

Have you received any pre-pub reviews/promises of placement from trade and/or national publications for the November titles?
 

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In Post #53, I commented that I submitted to Luthando Coeur, and they asked for a full. I got a response about 10 minutes ago. It sounds like a R&R, but I just want say that James Crewe provided amazing, thought provoking critique, feedback, and suggestions. In my limited correspondence with Mr. Crewe I found him to be pleasant, knowledgeable (in mythology anyway) and enthusiastic.

So, that's one notch in the company's favour.
 

triceretops

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On the positive side, I also noticed that they were thoroush in explaining any plot problems or changes that might enhance the manuscript. There was no doubt that every word had been read of the full, along with serious and specific notes to various/many areas. I'll give them an A+ for enthusiasm. But I sure wish the advance option was reinstated somehow, which was my initial attraction to them.

tri
 

Jo Zebedee

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So, if needed I could track the cost of goods, but how do I find out the costs of services?

Is there a ballpark figure that, if I asked the question how much of a 4.99 cover price would come to the author, could be indicated? It's a bit confusing for those of us who aren't contract aware?
 

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I'm glad to see everyone is as active as normal. I did want to say that I very much enjoy chatting with you all, my personal thoughts about TZPP contract aside >> I of course think it's too author friendly - but I wouldn't be a good business man if I thought otherwise :) << I do like the frankness with which you play Devil's Advocate.

Travis, I have no idea who said what here, or what you're responding to.

If you'd use the "quote" feature it would be much easier for us to follow: just click on the "quote" button in the bottom right-hand corner of the post you want to quote, and the post will appear in your "reply" box wrapped in quote-tags.

If you want to split that quote up into smaller parts, as I'm going to do with this, just highlight each section in turn and then click the "quote" icon in the bar at the top of your reply box: it's the one that looks like a slightly yellowed speech bubble. Or you could type in your quote-tags manually: just put in {quote} at the beginning of the text you want to quote and {/quote} after it, only instead of using curly brackets {} use square brackets [].

It would make your comments here much easier for us all to understand, and I'm sure we'd all appreciate it.

I do hope that you will all eventually learn to love TZPP - and our contract, just the way we are.

So long as the various problems still exist, that's not going to happen.

I do think that we are now in a wait and see mode. Much to my chagrin, and due in large part to our on-going discussions several of our most promising authors have decided to wait 3-6 moths while our first onslaught of title publications launch this year beginning in early November. I'm confident that come February we will be able to show significantly stronger sales as we fully implement our marketing program.

If you're publishing books in early November, why are you going to wait until February before you "fully implement [your] marketing program"?

hothguard51 [sic]: I'm not entirely sure how you (or Victoria) figures that there is not enough information for an author to determine what the hard value of the Costs of Goods will be prior to signing the contract.

We did discuss the hard costs of COGS -- all of which are publically available at third party locations as far as cost:

Retailer Freight (Distribution Charges): https://kdp.amazon.com/self-publishing/help?topicId=A29FL26OKE7R7B
Copyright Registration: http://www.copyright.gov/help/faq/faq-register.html#fee
International Standard Book Number (ISBN) https://www.myidentifiers.com/isbn/main
and Barcode: https://www.myidentifiers.com/barcode/main

These would give you higher end numbers that don't take into account our direct relationships and capabilities which we can leverage often times to reduce those costs.

We have also detailed minimal price points at which we would sell a book - to keep the numbers simple - in eBook format or USD$4.99 -- you could extrapolate that over contractual minimal numbers of 100 units per year and begin running through the math To give you absolute minimal and rough guesstimates. I have said before that for our purposes an author will begin to earn royalties on their work after 19 units have been sold.

So, please forgive my ignorance, but I fail to see how this too vague for an author to make an informed decision, unless of course an author had a lingering concern about their work's ability to sell 19 units...

My bold.

Implying that our reservations about Zharmae are caused by our concerns over the sales potential of our own work is low, Travis.

The issue here isn't about whether or not "an author had a lingering concern about their work's ability to sell 19 units...". The problem is that you're not showing all the costs involved in publishing a book, but saying that authors' royalties will be directly affected by those costs.

For example, I assume you'd also include editing, design, layout, typesetting, formatting, distribution, sales, and marketing and so on, in your costings. As far as I can tell you've not provided any information on those costs, so how are authors to know what these amount to, in order to calculate the royalties they would actually earn?

I imagine that you would prefer the reversion be a auto-revert clause should the sales fall below the pre-determined threshhold, but that would be counter to TZPP Author Relations intent which is to work exclusively with the author over the duration of their career. The onus is thus placed on the Author to sever the relationship.

You could have an auto-reversion at such a point unless the author chooses to renew the contract. Opt-ins are often more helpful than opt-outs.

All in all, I do think that this is a decent contract that most authors would enjoy working under, obviously for some it will be far to onerous, but for most, especially those that do work with us, they enjoy working with us.

You might think it's a decent contract but I doubt that "most authors would enjoy working under" it. There's a lot of work to be done on it yet. As for "those that do work with us": how many of them have had their books published yet? How many have been delighted with the sales you've achieved for them? There's a lot more to being published well than enjoying your publisher's company, and appreciating the friendly emails he sends you.

As I mentioned previously we are really in a wait and see mode, I will not be changing this version of the contract until mid-2014 at the earliest, if and when I do, I will most certainly come here for feedback in modifying the terms of our contracts.

You might do better to take some professional advice on your contracts, and the sooner the better. Victoria is especially good at dissecting contracts: but she's not an attorney, and it's in your company's interests to have the best contract possible. The one you've got at the moment is not good enough, I'm afraid.
 

traveo2343

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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 50% (fifty 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.
6.3.1 Costs of Goods are defined as: Retailer Freight (Distribution Charges), Copyright Registration, International Standard Book Number (ISBN), and Barcode.
6.3.2 Costs of Services and Production are defined as: Managing Editorial, Copy Edit, Proofing, Review, Cover and Interior Design and Typography, Editorial, Marketing, Research, and Sales.
6.3.3 The Costs of Services and Production will not exceed 50% of Gross Revenue after the Costs of Goods have been satisfied.


First, from this section the author can deduce several things:
#6 - We account following Net Revenues, the definition of which is given by GAAP.

#6.1/2 - To emphasize the partnership in sharing of the risk, the author is paid 50% royalties on both Print and Electronic versions (#8 details 50% for all other rights which are licensed.)

#6.3 - Gives the definition of GAAP accounting for the benefit of the author.

#6.3.1 - Defines COGS which as I noted above all have independently verifiable costs. I gather this is not so much of a concern for you.

#6.3.2 - Defines COSS, I also gather that the definition is expected and not what bothers you.

#6.3.3 - If I am following correctly, then this is the point that you are having difficulties with. This means that COGS are re-paid first (this is a set amount that an author can calculate based on sales volume). Following GAAP, Services and Production IS paid before we get to a Net Revenue. Because of this, I contractually limited what can be accounted (paid) to COSS to 50% of what is left after COGS have been re-paid.

Thus COSS is an independently verifiable number (it does fluctuate the same way that a

The costs of staff associated with COSS are a percentage of the total COSS. Meaning that Editors are paid a percent of the total COSS, designers are paid a different percent of the COSS and so on. Thus the author need not be concerned with what my staff is paid, just that the total amount that my staff is paid, will not exceed 50% of Gross After Cost of Goods. Does this make sense?

Let's run the numbers given Sales price of $4.99 and assume 3,000 unit sales, with no returns (eBooks for simplicity):

Gross Rev: $15,000
Total COGS: $4,600
Gross After COGS= $10,400
COSS: $5,200
Net Rev = $5,200
Author 50%: $2,600
Artists 15%: $780
Publisher 35%: $1,820

(I used $5.00 round-up for ease of numbers)

+++

Implying that our reservations about Zharmae are caused by our concerns over the sales potential of our own work is low, Travis.

Please forgive me, I was not meaning to be rude.

But we are coming back to economics at this point. In such terms, if you are unwilling to take part in the risk of a project, that is often due to a lingering concern or question over it's earning potential.

You might do better to take some professional advice on your contracts, and the sooner the better. Victoria is especially good at dissecting contracts: but she's not an attorney, and it's in your company's interests to have the best contract possible. The one you've got at the moment is not good enough, I'm afraid.

The contract is sound and legally equitable, under Washington state law about the only point of concern might be due consideration, which would be satisfied by paying a token of $1.00. Now given the fact that this contract would be viewed as a the formation of a partnership (type of business), and the majority risk and undertaking of execution is with the publisher, the fact that the Author would earn 50% and the publisher only 35-40%, the issue of consideration is null.

I come here and discuss the contract with you out of courtesy, not of any legal concerns. I have had this contract reviewed many times and all in all, this contract is good. Where you're coming into a notion of it being bad are points that you consider to be not good.

That being said, the language and form of Exhibit 3 is fine. You just don't like, and do not think, that I should ask for Theatre, Film, Radio, and Merchandising rights.
 

Round Two

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Let's run the numbers given Sales price of $4.99 and assume 3,000 unit sales, with no returns (eBooks for simplicity):

Gross Rev: $15,000
Total COGS: $4,600
Gross After COGS= $10,400
COSS: $5,200
Net Rev = $5,200
Author 50%: $2,600
Artists 15%: $780
Publisher 35%: $1,820

(I used $5.00 round-up for ease of numbers)

Why is the Total COGS so high for the ebook in question? The ISBN and copyright registration are legit expenses, but there'd be no reason for a barcode. How would "distribution" in that case be defined? There isn't any freight associated with an ebook.

Is that $4.99 the digital list price? If it is, and you're going to sell on all of the standard channels (Amazon, B&N, Kobo, Sony, etc.), there's no indication you're taking into account the percentage realized by the vendor.

If you're selling straight from your site at $4.99, then I wish you the best of luck, but that 3,000 unit number might be a lot harder for you to attain than you think.
 

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So, maths was never my strong point, and all these COGGs and what not are confusing my gears. But 2300 for 3000 units means 77 cents per copy sold to the author. So that's about 50 pence, UK, right. And then Amazon take their chunk from the costs, so what is the author down to? About 40p? Is that in the ballpark for a $4.99 book?

Is this in line with other publishers? That's what I don't know and find hard to figure out, and -- I'm sure I'm not alone in this -- it's the simple terminology I can understand.
 
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ironmikezero

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Typo?

Thus COSS is an independently verifiable number (it does fluctuate the same way that a

Travis, we sincerely appreciate your continued willing communication with the authors on this site. We truly value a publisher's contribution to an open and enlightening dialog.

May we assume that, as you have earlier stated, that all contracts offered by TZPP are open to negotiation, and the contract discussed here (your most recent version) is TZPP's baseline position?
 

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Is this in line with other publishers? That's what I don't know and find hard to figure out, and -- I'm sure I'm not alone in this -- it's the simple terminology I can understand.

No, it's not in line. Most publishers, small or large, define net as money they receive from the vendor, not money received minus myriad other costs. And most larger publishers give royalties on cover price.
 

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Typically artists who do the cover are paid a flat fee, not a percentage. That's just one point where I have to shake my head and wonder what is going on with this press.

Cost of Goods? On an ebook? There is no paper or printing cost so why is that even listed? ISBNs in lots of 100 come out to around $5.75 each. In larger numbers they are even cheaper. Barcodes do not need to be purchased, they can be generated with a special font style tool. (I know this as fact.)

Also, for the record, the cost of doing business is supposed to be coming out of the publisher's portion of the sale price which is how most presses operate.

Add to this the fact that the distributor's cut does not seem to be fully taken into account--unless that's part of your 'cost of goods' which I doubt from your examples--and I'm seeing a disaster in the making.
 
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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 50% (fifty 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.

6.3.1 Costs of Goods are defined as: Retailer Freight (Distribution Charges), Copyright Registration, International Standard Book Number (ISBN), and Barcode.

6.3.2 Costs of Services and Production are defined as: Managing Editorial, Copy Edit, Proofing, Review, Cover and Interior Design and Typography, Editorial, Marketing, Research, and Sales.

6.3.3 The Costs of Services and Production will not exceed 50% of Gross Revenue after the Costs of Goods have been satisfied.

First, from this section the author can deduce several things:
#6 - We account following Net Revenues, the definition of which is given by GAAP.

#6.1/2 - To emphasize the partnership in sharing of the risk, the author is paid 50% royalties on both Print and Electronic versions (#8 details 50% for all other rights which are licensed.)

#6.3 - Gives the definition of GAAP accounting for the benefit of the author.

#6.3.1 - Defines COGS which as I noted above all have independently verifiable costs. I gather this is not so much of a concern for you.

#6.3.2 - Defines COSS, I also gather that the definition is expected and not what bothers you.

#6.3.3 - If I am following correctly, then this is the point that you are having difficulties with. This means that COGS are re-paid first (this is a set amount that an author can calculate based on sales volume). Following GAAP, Services and Production IS paid before we get to a Net Revenue. Because of this, I contractually limited what can be accounted (paid) to COSS to 50% of what is left after COGS have been re-paid.

I assume the section in the inside quote-box is from your contract: is that right, Travis?

I note that you define all the various costs which will be deducted from gross amounts; but you don't specify what those costs will amount to, and this is what troubles me.

It means that writers won't know how much they'll earn, in real terms, per copy sold.

In order to clarify, you'll have to tell us specifically what a writer can expect to earn per copy sold.

For example, in a contract where (examples simplified for ease) the writer earns 12% of cover price per print copy sold, and 25% of cover price per electronic copy sold, and the cover prices are £10 and £5 respectively, the writer would earn £1.20 per print copy sold and £1.25 for every electronic copy sold.

In a contract where an author would earn 50% of net revenues per electronic book sold, where "net" is defined as the cost of distribution to Amazon, which is set at (I think) 30% of cover price and the book is priced at £5, the author will earn £1.75 per copy sold (which I think is half of what's left after you take 30% off £5--someone please shout if I've done that wrong).

In your contract the author doesn't know what they'll earn because despite all your various complex definitions and explanations, you don't specify the amounts which are deducted under costs.

Thus COSS is an independently verifiable number (it does fluctuate the same way that a

The costs of staff associated with COSS are a percentage of the total COSS. Meaning that Editors are paid a percent of the total COSS, designers are paid a different percent of the COSS and so on. Thus the author need not be concerned with what my staff is paid, just that the total amount that my staff is paid, will not exceed 50% of Gross After Cost of Goods. Does this make sense?

That first para doesn't, because it's not complete.

The rest might just as well be nonsense because you don't provide any specific cost amounts.

Your statement that "the total amount that my staff is paid, will not exceed 50% of Gross After Cost of Goods" does not reassure me: if it's significantly less than 50% of gross after the COGs has been deducted, how will anyone know? How can you be certain it won't exceed that 50%? What will you do if it does? Where will you find that extra money from, and what will happen to your writers' payments if you can't find it?

This is all far too complex, and to be honest it shouldn't be part of your contract with writers. It's your business, not your writers'.

The issue isn't how you define COGS or COSS, or how small or large a percentage of anything either of them are: I want to know how much a writer who you publish will earn per copy sold. That's all.

Let's run the numbers given Sales price of $4.99 and assume 3,000 unit sales, with no returns (eBooks for simplicity):

Gross Rev: $15,000
Total COGS: $4,600
Gross After COGS= $10,400
COSS: $5,200
Net Rev = $5,200
Author 50%: $2,600
Artists 15%: $780
Publisher 35%: $1,820

(I used $5.00 round-up for ease of numbers)

The problem I have with this model is that you, the publisher, are getting all your costs paid first; and then you're splitting what's left between you, the writer, and the artist. So you're covering your own bases before you pay the talent, and at that point you're taking a cut too.

In other words, you're expecting the writers and artists you work with to cover the risk you take in publishing the book without acknowledging the risk they've already taken in writing the book or drawing/designing it.

Please forgive me, I was not meaning to be rude.

Whether you intended to be rude or not, you were.

But we are coming back to economics at this point. In such terms, if you are unwilling to take part in the risk of a project, that is often due to a lingering concern or question over it's earning potential.

Writers take their risk when they write books.

Publishers take their risk when they publish books.

Writers don't expect publishers to cover the costs they incur while writing their books; publishers shouldn't expect writers to cover the costs publishers incur when publishing. But that's exactly what you're doing here, and your repeated implications that writers who aren't prepared to take this risk is because they know in their hearts that their work isn't good enough is patronising, manipulative, and insulting.

The contract is sound and legally equitable, under Washington state law about the only point of concern might be due consideration, which would be satisfied by paying a token of $1.00. Now given the fact that this contract would be viewed as a the formation of a partnership (type of business), and the majority risk and undertaking of execution is with the publisher, the fact that the Author would earn 50% and the publisher only 35-40%, the issue of consideration is null.

Just because your contract is "sound and legally equitable, under Washington state law" it's not automatically also fair to the writers you publish.

The majority risk does not lie with the publisher because you've not taken into account the risk the writer takes by writing the book.

The split isn't 50% to the writer and 35-40% to the publisher because you get your 35-40% in addition to all your costs of doing business, while expecting the writer to fund all his or her costs out of their 50%.

If you factor in the costs that you take out of the gross revenues, you're getting paid far more than the writers you publish.

Let's go back to this part of your post where you provided that revenue split:

Let's run the numbers given Sales price of $4.99 and assume 3,000 unit sales, with no returns (eBooks for simplicity):

Gross Rev: $15,000
Total COGS: $4,600
Gross After COGS= $10,400
COSS: $5,200
Net Rev = $5,200
Author 50%: $2,600
Artists 15%: $780
Publisher 35%: $1,820

(I used $5.00 round-up for ease of numbers)

In that text, three people earn money: the writer, the artist, and the publisher.

Out of a total income for the book of $15k, the author of the book gets paid $2,600; the artist gets paid $780; and the publisher gets paid the rest of the money, which comes to $11,620--not $1,820. Your authors don't get paid 50% of revenue while you only get 35-40%: the truth is, you take 77.5% of income while your authors get 17.3% and your artists get 5.2%.

Yes, I realise you have to pay for the cost of publishing the books out of your 77.5%; but your authors have to pay for the cost of writing their books out of their 17.3%, and your artists have to pay for the cost of designing and illustrating the books out of their 5.2%.

Now do you see why the risk is not equitable here, you're not splitting the profits with your writers, and you're not getting a smaller percentage of the income than your writers?

I come here and discuss the contract with you out of courtesy, not of any legal concerns. I have had this contract reviewed many times and all in all, this contract is good. Where you're coming into a notion of it being bad are points that you consider to be not good.

Your contract might be legally sound, and it might be good for you, but it's not good for the writers who sign it.

That being said, the language and form of Exhibit 3 is fine. You just don't like, and do not think, that I should ask for Theatre, Film, Radio, and Merchandising rights.

Travis, while I really appreciate your repeated efforts to clarify things for us here, and I am grateful that you have remained courteous and engaged throughout, I don't like your contract, and I don't like your business model.

I don't think you have bad intentions--not at all--but with all due respect I don't think you know enough about publishing to realise where you're going wrong, I don't think your terms are at all writer-friendly, and you're not being nearly as generous as you seem to think you are.

I still cannot recommend that any writers sign with your publishing house.
 

traveo2343

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Why is the Total COGS so high for the ebook in question? The ISBN and copyright registration are legit expenses, but there'd be no reason for a barcode. How would "distribution" in that case be defined? There isn't any freight associated with an ebook.

Is that $4.99 the digital list price? If it is, and you're going to sell on all of the standard channels (Amazon, B&N, Kobo, Sony, etc.), there's no indication you're taking into account the percentage realized by the vendor.

If you're selling straight from your site at $4.99, then I wish you the best of luck, but that 3,000 unit number might be a lot harder for you to attain than you think.

We have world English Language distribution, so we do sell through standard outlets including: Amazon, B&N, Kobo, Google, Sony, iTunes, Powells, etc. Distribution/Freight is what those retailers take which averages about 30% which is why the COGS is so high. I believe that I had mentioned this previously, but we always produce finished titles for Print, so a Barcode ($25) would also be included in that price tag.


So, maths was never my strong point, and all these COGGs and what not are confusing my gears. But 2300 for 3000 units means 77 cents per copy sold to the author. So that's about 50 pence, UK, right. And then Amazon take their chunk from the costs, so what is the author down to? About 40p? Is that in the ballpark for a $4.99 book?

Is this in line with other publishers? That's what I don't know and find hard to figure out, and -- I'm sure I'm not alone in this -- it's the simple terminology I can understand.

Please go here: http://trgmholdings.files.wordpress.com/2013/06/quick-view-pubs.pdf This will probably give you guys the easiest method to visually see how we account, and you can compare these numbers.

Typo?

Thus COSS is an independently verifiable number (it does fluctuate the same way that a

Travis, we sincerely appreciate your continued willing communication with the authors on this site. We truly value a publisher's contribution to an open and enlightening dialog.

May we assume that, as you have earlier stated, that all contracts offered by TZPP are open to negotiation, and the contract discussed here (your most recent version) is TZPP's baseline position?

Yes, with the exception of #51 all points in our contract are negotiable. I just concluded a contract this morning for one of the imprints: The hindrance to signing was a difference of opinion in how we view the word "series". Ever the enterprising and zealous individual, I do view a series as a simple continuation of the original work, which is one of the reasons why as a policy I try to signed series under the same contract, I'm not partial to peicemealing much of anything. The author was concerned that due the vagueness of the word there was a potential that should the work develop into 10 books that he would still be bound by the original terms of this, his first agreement. Obviously my view is that would be the case, and would not be such an issue if there were only 2 or 3 books in the series, and they were already written, however because the works are still in progress and the author has left the idea of continuation open we decided to limit the contract to specifically the first book. In this case, the author was not so concerned with earnings as he writes because he truly enjoys doing so, and would write even without the prospects of earnings, for him, the concern was the relationship. What happens when he sign the entire series, and it sells fabulously, but the relationship, personally sours?

So yes, this has tought me how important it is for my editors and authors to have a good working relationship, becasue even if all the numbers make sense, sometimes the people don't. I would reiterate again, that TZPP is not for everyone, and that is one of the major reasons why I make a point (and puysh my editors to do the same) of being accessible to our authors and readers. When you get into bed with someone after a few martini's you gotta like what you see in the morning, otherwise it's a bad thing.

No, it's not in line. Most publishers, small or large, define net as money they receive from the vendor, not money received minus myriad other costs. And most larger publishers give royalties on cover price.

This is a flaw in traditional accounting in the industry. I don't come from books, and that is not how you do accounting in any other industry. I don't see the point in acquiescing to a serious flaw. So we follow GAAP.
 

traveo2343

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Thus COSS is an independently verifiable number (it does fluctuate the same way that a

Sorry, yes, unfinished thought:

Thus COSS is an independently verifiable number - it does fluctuate the same way that as distribution/freight does inline with the number of unit sales.

ie. the Nominal amount will increase or decrease as sales do, but the Percent amount will remain constant.
 

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I just concluded a contract this morning for one of the imprints: The hindrance to signing was a difference of opinion in how we view the word "series". Ever the enterprising and zealous individual, I do view a series as a simple continuation of the original work, which is one of the reasons why as a policy I try to signed series under the same contract, I'm not partial to peicemealing much of anything. The author was concerned that due the vagueness of the word there was a potential that should the work develop into 10 books that he would still be bound by the original terms of this, his first agreement. Obviously my view is that would be the case, and would not be such an issue if there were only 2 or 3 books in the series, and they were already written, however because the works are still in progress and the author has left the idea of continuation open we decided to limit the contract to specifically the first book. In this case, the author was not so concerned with earnings as he writes because he truly enjoys doing so, and would write even without the prospects of earnings, for him, the concern was the relationship. What happens when he sign the entire series, and it sells fabulously, but the relationship, personally sours?

This is why publishing contracts usually specify the number of books they cover, and include clauses which give the publisher a right of first refusal to subsequent books in the series.

This is a flaw in traditional accounting in the industry. I don't come from books, and that is not how you do accounting in any other industry. I don't see the point in acquiescing to a serious flaw. So we follow GAAP.

I think it's your lack of any publishing background which makes you see this as a flaw, rather than any real problem in the system: it not only works ok for most of the trade publishers I know, it works very well indeed for them--and for the authors who are under contract to them.

Better, I suspect, than your contract is going to work in the long term.