Allison R. Dobson, Digital Publishing Director of Random House, has written an open letter to the Science Fiction Writers of America responding to the warning it published about Hydra, a new imprint with a no-advance, author-pays-expenses contract that SFWA (and I) characterize as being totally unacceptable. Dobson's letter doesn't do much to change my view on that:
When we acquire a title in the Hydra program, it is an all-encompassing collaboration. Our authors provide the storytelling, and we at Hydra support their creativity with best-in-class services throughout the publishing process: from dedicated editorial, cover design, copy editing and production, to publicity, digital marketing and social media tools, trade sales, academic and library sales, piracy protection, negotiating and selling of subsidiary rights, as well as access to Random House coop and merchandising programs. Together, we deliver the best science fiction, fantasy and horror books to the widest possible readership, thus giving authors maximum earning potential.
There are other options for doing the same: Lulu, BookBaby and CreateSpace will all let you pay freelancers to do any and all of that stuff (and given that so much of publishing is now outsourced, they're likely to be some of the same people doing the job at a Big Five publisher), but none of them demand all your rights and subsidiary rights for the length of copyright, and none of them reserve the right to charge arbitrary sums to your account before they pay you any royalties.
As Munger points out, costs-plus-percentage-of-costs contracts are a moral hazard (that's why it's a felony for the US military to issue them), and they have no place in publishing.
Random House Responds to SFWA Slamming Its Hydra Imprint
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