Thursday, May 12th at 11: 30 A.M.
Macmillan Booth #1958
Tickets for the event will be dropped in the
booth at 9 A.M., first come first served.
Author photo © Jean-François Bérubé
#1 NEW YORK TIMES
Is a Flat Royalty Rate
Although the members of a panel discussing possible changes to standard
publishing contracts didn’t agree on all points, there was one idea that
gained support from all four panelists yesterday morning—the possibility
of eliminating different royalty rates for different formats in favor of a flat
rate that would cover all book formats.
The panel, moderated by Authors Guild executive director Mary
Rasenberger, came one year after the guild began its Fair Contract
Initiative, aimed at opening up discussions about how authors can become
more like true partners with publishers.
Rasenberger noted that the most recent guild survey of author income
found a decline in earnings in recent years, especially since the advent of
e-books. Morgan Entrekin, president and publisher of Grove/Atlantic, said
his authors receive more of the revenue pie than before, a fact reinforced
by Hachette Book Group CEO Michael Pietsch, who noted that HBG’s
author costs have risen by 50% over the past 15 years, driven in large part
by higher advances. Both publishers agreed that those having the most difficult time are midlist authors. Entrekin guestimated that “brand” authors
probably have the leverage to get 60% or 70% of all revenue of their book
The idea for the flat royalty came in a debate about whether the e-book
royalty rate should move from the current 25%, to 50%, as advocated by the
guild. Entrekin and Pietsch were against the idea, and Pietsch pushed back
against the contention that the 25% rate is unfair. He noted that while the
guild likes to compare the 25% e-book royalty rate to the roughly 30% rate
for hardcovers, the e-book rate is much higher than the royalty rate paid on
trade paperbacks and mass market paperbacks. Pietsch said he would be
happy to talk to authors about a flat rate across all formats that would cover
the lifetime of a book. Entrekin said he is always doing a variety of deals,
including a flat royalty rate, as well as profit sharing. “I am open to anything
at any time,” Entrekin said, adding that being flexible on contracts is one
advantage he has over his larger competitors.
Jonathan Lyons, a literary agent and lawyer, said he, too, would be inter-
ested in talking about a flat royalty rate or profit sharing with publishers.
One point of contention between the two publishers and the guild was
over the length of contracts and the reversion clause. Entrekin said
between one-third to one-half of the books he publishes lose money, and he
needs to be able to depend on revenue from longtime sellers to balance his
books. Pietsch also said HBG loses money on many of its books, and that a
clause forcing publishers to renegotiate with authors of good sellers after
seven to 10 years would put the entire financial dynamic of publishing in
question. He said he is willing to discuss a renegotiation with successful
authors, but is opposed to being forced to open up discussions by a contract
clause that could put the book up for competitive bidding.
Pietsch and Entrekin also said they are willing to talk to authors who are
looking to get their rights back on a case-by-case basis. Entrekin said pub-
lishers “don’t want to sit on things” that aren’t selling. Lyons said that at a
minimum, authors should be able to get rights back in an area that publish-
ers are not interested in exploring any more, such as translation rights.
The session ended with Rasenberger noting that since the guild released
the 11 points in its Fair Contract Initiative earlier this year, it has begun
talking to publishers about altering the standard contract. “We have got
pushback from some, cooperation from others,” she said. “We know this will
be a long process.” —Jim Milliot
The possibility of a flat royalty rate across all book formats was discussed at a panel
yesterday featuring, l.–r., Hachette Book Group CEO Michael Pietsch; Morgan Entrekin,
president and publisher of Grove/Atlantic; Authors Guild executive director Mary
Rasenberger; Jonathan Lyons, literary agent and lawyer.