Closer look at the scammy, awful contracts from Random House's new ebook imprints

Yesterday, I blogged about the awful contracts on offer from Random House's new Hydra imprint, which runs like a scam vanity-press, paying no advances, seizing all rights and charging normal publisher's operating costs to the author. John Scalzi's gotten ahold of the (presumably identical) contract for Alibi, the mystery/crime-book version of Hydra, and it really is awful.

The fact that Alibi is shifting those costs to the author is hugely significant, for reasons noted in the previous entry (i.e., Alibi is shifting an extraordinary portion of the risk of publishing onto the author’s back). But it’s also worrying to the author for two other reasons:

One, it puts the author in the hole to the Alibi for an amount which the author has almost no control over — it’s Alibi choosing how much to spend on the services and expenses which constitute the Net Billings. All the author is empowered to do (at least as I read the contract) is pay for them. It should be noted that Random House probably owns warehouses and printing presses (or has long-terms arrangements which represent sunk costs), so in effect the publisher will be charging the author for services it provides, i.e., it’s taking money from the author and putting it into its own pocket — payment for services publishers are supposed to provide as their part of the publishing equation. The contractual language does note that some expenses are to be “mutually-agreed” upon, but this just brings up another problem:

Two, it transfers the cost of these services onto the most ignorant partner in the contract — which is to say, the author. Yes, authors, I know. You are smart. But — can you tell me what “plant costs” mean? What about “conversion fees?” Can you give me a sum that you know with certainty to be in the ballpark, in terms of what those costs and fees should be? Do you know how much it costs to print and bind a book? Are you sure? Is Alibi printing them individually or in one large print run? How will that affect unit cost? What’s a reasonable sum for warehousing? You better know because the contract won’t tell you — or at least the one I have in front of me sure as hell doesn’t.

And here’s another thing to consider: When it’s the publisher fronting the costs for printing, warehousing, plant fees or whatever, it will, out of its own self-interest, they will try to lower the cost as much as possible, because not doing so will cut into its profits. But authors, when you are fronting the fees, the printing, warehousing, plant fees and everything else becomes a potential profit center for the publisher.

A Contract From Alibi


    1. A rock n roll band can at least do a live show and make extra money from the ticket sales and t-shirt sales.

      Hmm… imagine a world with sold out stadiums full of screaming fans, a lone author on stage, spotlight: “Chapter 1. It was a dark and stormy night…” Only $55 a ticket!

    2. Good comparison. It’s always irritated me when people equate conventional publishing with the recording industry. We’re nothing like them. We pay for everything. All the author risks is the book — and if we can’t make it pay, they get it back free and clear.

    3. This is precisely how a music company works. If you want to record a record, you do it in our studio’s for which you will pay for, and if you want to look good (and you will look how we tell you to look) you will do so on our credit card, that we will loan to you at your expense. Etc etc etc. You don’t make money on your first album, or for that matter your first contract, but you might on the second contract, until then you are in debt to the record company. Merchandise and gig’s are possible money earners, but only if you do enough of them, because the management need their cut first. 

      Get known, get big and perhaps you can alter the terms of the contract, if that debt was paid off quickly enough.

  1. It’s obviously evil and scammy either way; but it just seems insane to try to pull this on you digital imprint.

    The print vanity presses have the advantage of the suckers who crave the validation of a nice printed book with their name on it, have no idea how much printing a book costs, can be stuck with optimistic minimum orders that moulder away in their attics as they futily attempt to sell them, etc.

    Ebooks, though? The web is not exactly empty of people willing to programmatically convert your .doc to an epub and maybe slap an ISBN on it and check that the conversion process didn’t ruin the formatting too hard for a modest additional fee… 

    Unless the service includes absolutely gilt-edged digital typesetting and editorial services, along with comprehensive pushing and promotion on the sales side, it’s just a glorified file format conversion.

    I just don’t get it… Even from a purely practical perspective, unless it passes the ‘is this offer less evil than Amazon’s service?’ test, it’ll be a hard sell even to suckers.

    1. The proverb used to be that printing isn’t publishing. In the digital world, e-book conversion isn’t publishing either.

      What you’re calling “Amazon’s service” *is* a publishing operation — and it’s got real pitfalls of its own.

      As always, the writer’s only real defense is to do their research before entering into any agreements.

      1. I’m hardly saying that Amazon is good; just that it seems insane to even bother entering the market unless you are as evil, or less, than they are.

      1. Well, since it comes out of your royalties rather than our profits…. more than you might have expected…

      2. I could answer that at length, since it’s what I do, but just to keep this on target, the problem is – how would you know?  They determine what is overhead / cost…they determine how much to spend on it – then they take the money from the author’s royalties, assuming there are royalties.  You go into this OWING the publisher money, and with the publisher owning the rights to your creation for the life of the copyright.  To be clear, that’s your life, plus 70 years.

        1.  Although unless they try to argue that this constitutes a work made for hire (which is what the music industry tries to do) the author has a statutory right to terminate the assignment after 35 years.

  2. It should be kept in mind that the Random House Hydra imprint is NOT the same entity as the small press Hydra House Books. It’s an unfortunate similarity for the latter.

    1. Only if you don’t care about distribution and placement. If you want your book to be on sale at places where people shop, you need to go through a publisher.

      1. Wrong – I didn’t go through a publishing house and I’ve sold copies of my e-book on Amazon, B&N, Nook & iTunes. I’m not burning up the charts (yet) but I have achieved everything this lousy contract offers without any of the costs it imposes.

  3. The real problem is that when the author pays the costs, the publisher has no incentive to sell the work.

    In normal, commercial publishing, publishers make their money by selling copies of their books to the general public. Whatever costs they incur come out of that gross income.When the author covers the costs, the publisher’s incentive vanishes.

    You may be thinking that there’s still the incentive of making more money by selling more copies, but it doesn’t work that way. Finding good books, making them better, and making them known to the public, are difficult and expensive tasks, and there’s no guarantee that a given book will sell well enough to cover the additional costs.

    On the other hand, the cost of turning a manuscript into a book is knowable — and the less value the publisher adds, the more knowable the cost of publication becomes. Vanity publishers who hit the right price points and maintain tight control over a stripped-down production process can make a small but certain profit off every book.

    What you’re not going to see are mixed processes where hopeless books get perfunctory publication, and better ones get more attention. When a publisher runs a minimal-expense stripped-down process, every book gets tossed into the same meat grinder.

    1. Exactly. There is no impetus on the publisher to succeed.  If they get a hit, they reap the benefits, if they don’t, they build a huge list from which they make a little here and there, and on which they never have to pay out.

      1. I keep seeing this idea, but I think it’s wrong. As the contract is explained on the SFWA site, the publisher pays the initial costs up front and later recoups half from the author’s royalties. If, and I admit this is a big if, the fees are the publishers actual costs, then the publisher and author will make exactly the same amount of money. In fact the publisher would assume more risk since they would be the one to take the loss if the book doesn’t sell enough to cover costs.

        The extremely long term of the contract and extensive rights grab is the big problem.

  4. Now that I am seeing ads from Trafford self-publishing on BB, what are THEIR terms of publishing?

  5. How unintentionally revealing are these names: “Hydra”, a monster that tries to devour the valiant, and “Alibi” – an excuse given to attempt avoiding just punishment.

    Probably resulting from the same suppression-projection syndrome that caused the Bush administration to first name the Iraqi invastion Operation Iraqi Liberation (OIL).

  6. This sort of thing is completely normal in scientific article publishing.  The manuscript is read and corrected by other scientists who get nothing for their work (and it easily costs half a day to do that work right). After your manuscript is accepted you have to sign a paper that says you transfer all copyrights to the Editor, and then you have to pay US$ 100,- per page to publish the thing. The author pays everything, she even has to pay to read her own article online or in the library.

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