“When Amazon’s sales reps call for an appointment to pitch their list,” we pointed out, “they may find the owners’ phones turned off.” (See Please Shut Off Your Cellphones. This is a Bookshop)”

They did. Barnes & Noble will not carry books published by Amazon’s publishing imprints.

“In a sharp answer to Amazon and its expanding publishing efforts,” writes the New York Times‘ Julie Bosman, “Barnes & Noble said on Tuesday that it would not sell books released by Amazon Publishing in its bookstores. The ban includes books released by New Harvest, a new imprint of Houghton Mifflin Harcourt that recently struck a deal to publish and distribute books released by Amazon Publishing’s unit based in New York.

“’Barnes & Noble has made a decision not to stock Amazon published titles in our store showrooms,’ Jaime Carey, the company’s chief merchandising officer, said in a statement. ‘Our decision is based on Amazon’s continued push for exclusivity with publishers, agents and the authors they represent. These exclusives have prohibited us from offering certain e-books to our customers. Their actions have undermined the industry as a whole and have prevented millions of customers from having access to content. It’s clear to us that Amazon has proven they would not be a good publishing partner to Barnes & Noble as they continue to pull content off the market for their own self interest.’”

B&N’s decision may impact negatively on the authors and their agents contemplating selling their authors to Amazon Publishing.

Though some publishing executives may take a measure of satisfaction that B&N, now the victim of Amazon’s aggressive marketing strategies, is paying dearly for its own predatory practices when it was the ruthlessly dominant bookseller of the twentieth century, consumers will rally around it and its more helpless independent bookstore cousins. Publishing industry old-timers like to say “What goes around comes around” and for Amazon it has come around.  We hope however that Amazon Publishing will itself come around – to an open policy of mutual cooperation in the fragile ecology called publishing.

Details in Barnes & Noble Won’t Sell Books From Amazon Publishing

Richard Curtis

Bills currently being written in House of Representatives committees are aimed at curbing search engines like Google and Yahoo that link to illegal file sharing and bitTorrent websites, and stopping payment facilitators like PayPal that enable transactions for unauthorized books, movies and music. (In fact, you can use Google to link to free versions of Clash of the Titans here, but we urge you to be very careful  clicking on links to free downloads as they may be phishing for your bank account information.)

Among the parties lobbying for passage of a tough law are the movie and music business, the US Chamber of Commerce, and the book industry (see Authors Guild President Scott Turow’s testimony before Congress). Even big unions like the AFL-CIO are pushing for passage, because piracy, particularly the offshore brand, steals American jobs.

On the other side of the issue are Yahoo, Google, Mozilla, the Tea Party and a lobby-full of freeists including, predictably, the Civil Liberties Union, all rallying under the banner of Down With Censorship. “Naturally,” writes Edward Wyatt in the New York Times (Lines Drawn on Antipiracy Bills), “the howls of protest have been loud and lavishly financed, not only from Silicon Valley companies but also from public-interest groups, free-speech advocates and even venture capital investors. They argue — in TV and newspaper ads — that the bills are so broad and heavy-handed that they threaten to close Web sites and broadband service providers and stifle free speech, while setting a bad example of American censorship.”

“Google itself,” Wyatt informs us,  “has hired at least 15 lobbying firms to fight the bills; Mozilla has included on its Firefox browser home page a link to a petition with the warning, ‘Congress is trying to censor the Internet.’” Texas representative Lamar Smith takes a different view of the Silicon Valley pressure groups: “They’ve made large profits by promoting rogue sites to U.S. consumers,” he contends.

Last May, when Google’s executive chairman Eric Schmidt declared in unequivocal terms that he opposed any effort to curtail Google’s right to link to piracy websites like Pirate Bay, we declared “Game Over.“  Now, with US lawmakers taking up the issue, there’s a glimmer of hope that the game is back on.

But it’s only a glimmer, and if our legislators are true to form, the Right-to-Information promoters will either kill the bill or water it down to the same kind of joke that is the Digital Millennium Copyright Act. That piece of legislation is ostensibly designed to punish pirates, but the Silicon Mafia prevailed on the lawmakers to create a “Safe Harbor” provision that gives accused infringers a period of time in which to respond to accusations. Safe Harbor also puts the burden of proof on rights holders, causing them to go through  hoops of flame to prove they are the true owners of the stolen content.

We have been criticized for supporting tough antipiracy measures because they might lead to government censorship. The chances of the pendulum swinging from its current position to state censorship are so absurdly long they are not worth discussing.  Meanwhile, the pirates continue to screw legitimate copyright owners while the search engines hold down their arms and legs.

Richard Curtis

If you said Down the Crapper, go back to Prophecy 101 and relearn the first two principles: #1, Never Give a Specific Time Line. And #2, The Odds That a Prediction Will Be Correct are 50-50.  Julie Bosman, covering the book beat for the New York Times, reports that “The initial weeks of Christmas shopping, a boom time for the book business, have yielded surprisingly strong sales for many bookstores, which report that they have been lifted by an unusually vibrant selection; customers who seem undeterred by pricier titles; and new business from people who used to shop at Borders, the chain that went out of business this year.” Sales are up as much as 16% over the same period in 2010.

One of the biggest surprises is that “glossy, expensive hardcover books have emerged as sleeper successes,” says Bosman. There’s a brisk trade in books of $75 and more. To what can we attribute this counterintuitive if not perverse surge in consumer commitment to print?  Our guess is that now that consumers have had a few years of e-books, they are starting to distinguish between books they merely want to read but not own, and those they want to read and own.

But that raises another question: why aren’t they buying them on Amazon and BN.com to take advantage of heavy discounts? Many book lovers we’ve spoken to have said they would rather pay list price and support their local bookstore than get a high discount that may lead to the demise of that store.  If you thought writers were strange, what can you say about readers?

One book we think you will want to read and own is The Oxford Companion to Beer by Garrett Oliver, arguably the world’s authority on the beverage.

Here is Oxford University Press’s product description for the book:

For millennia, beer has been a favorite beverage in cultures across the globe. After water and tea, it is the most popular drink in the world, and it is at the center of a $450 billion industry.

The first major reference work to investigate the history and vast scope of beer, The Oxford Companion to Beer features more than 1,100 A-Z entries written by 166 of the world’s most prominent beer experts. Attractively illustrated with over 140 images, the book covers everything from the agricultural makeup of various beers to the technical elements of the brewing process, local effects of brewing on regions around the world, and the social and political implications of sharing a beer.

Garrett Oliver is the Brewmaster of the Brooklyn Brewery and author of The Brewmaster’s Table: Discovering the Pleasures of Real Beer with Real Food. He has won many awards for his beers, is a frequent judge for international beer competitions, and has made numerous radio and television appearances as a spokesperson for craft brewing.

RC

“Bookstore owners everywhere have a lurking suspicion,” writes Julie Bosman in the New York Times. “that customers who type into their smartphones while browsing in the store, and then leave, are planning to buy the books online later — probably at a steep discount from the bookstores’ archrival, Amazon.com.

“Now a survey has confirmed that the practice, known among booksellers as showrooming, is not a figment of their imaginations,” she adds, citing a survey confirming that a quarter of those who’d bought a book from an online store had scouted it while browsing in a physical shop.

As if that isn’t upsetting enough to the shops’ proprietors, Tricia Duryee, writing in AllthingsD.com, tells us that brazen showrooming is actually being incentivized: “Amazon is offering consumers up to $5 off on purchases if they compare prices using the online giant’s mobile phone application in a store.” The offer is for all kinds of products but it feels aimed particularly at bookstore owners. “While Amazon’s applications and its $5 incentive can be viewed as friendly to consumers, physical retailers will see it only one way — as an attack,” says Duryee.

Amazon’s strategy could backfire, however.  The company’s recently created publishing imprints will need the good will of bookstore owners. But when Amazon’s sales reps call for an appointment to pitch their list, they may find the owners’ phones turned off.

See Book Shopping in Stores, Then Buying Online.

Richard Curtis

Jennifer Weltz

If, at any time after the effective date of this Agreement, US trade publishing industry electronic media royalties paid to authors are a higher percentage of the amount received by Publisher than those paid to Author under the terms of this Agreement, upon written request from Author this subparagraph will be deemed amended to such higher percentage.

The above text is an amalgam of boilerplate provisions found in the contracts of many publishers. It is a compromise reached in negotiations between publishers and agents as they hammered out a modus vivendi between the former’s wish to lock in a low e-book royalty and the latter’s insistence on a higher one. With such language installed into contracts, agents can monitor royalty rates in the book industry and, if it appears they are rising above the current threshold of 25% of net receipts, invoke the language entitling authors to the higher royalty promised in the contract.

Jennifer Weltz, a leading agent, thinks the time has come to invoke that provision and gives her reasons on AARdvark, an online forum of the Association of Authors’ Representatives.  She has kindly agreed to let us reprint it here.

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Alert – E-Book Industry Standards have Changed!

Dear Colleagues in the industry, remember all of those clauses we have in our contracts regarding e-books? The ones that say that when Industry standards change we will all be renegotiating new e-book rights? Well that time is now. E-book industry standards have changed.

Why have we not heard this news from our publishers?

Think of the number of contracts you have with that clause and then multiply it by x. This is the number of clauses that would have to be modified by publishers if they admitted to this obvious change. From a publisher’s perspective, the only possible change they would concede would be one where they would be raising the 25% royalty rate and overnight their profits would plummet. As you can imagine, this is not an attractive prospect.

Have industry standards changed? Yes

Will we first hear this from the publishers? No

What are these changes?

Well, there are, of course, the many emerging publishers doing business in the publishing world who offer much more lucrative e-book royalties. But they offer low advances or no advances. However we are starting to see that when publishers want a project enough, they find workable solutions with agents that are not the straight 25% we were given to believe was the 11th commandment. We are even seeing, the big publishers, developing creative e-book royalty solutions where rights were not clearly delineated in the original contract. And we are seeing authors make drastic choices, especially if they know that their books perform well in the e-book format – jumping ship, and working with the new publishers on the block who offer them a fairer piece of the pie.

What else has changed?

We are now often at 50% or more of total books sold for a particular title. When e-book royalties were first set at 25%, e-books were a fraction of the market (please refer to the many analyses that have been done over the years on the growth of the e-book industry). E-books are no longer a fringe subsidiary right but an essential format, just like print paperback and hardcover. I would even argue that e-book is the predominant format in the US, because, regardless of whether a book is published in hard cover, soft cover or in print at all, you can bet that practically every single US publisher acquiring rights to a new book today, will be releasing it as an e-book. The e-book format is the one guaranteed format for all of our future books. It has arguably swallowed up the custom of multiple print formats. In other words, whatever the print format for your first publication of a book may be, the future will see e-book as your second and possibly the only other format for your book. This is a major industry shift that has happened this year and publishers are now debating how best to handle it. Does this mean that we should only publish in Hard Cover and E-books or just Trade paperback and e-books? Forget about mass market! What we are seeing here is clearly an industry shift. This is a changed industry. Industry standards have changed.

Now what about the problems our publishers face if they admit to this change? Should we care?

I say yes, because, when we all agreed to these delightful industry standard clauses, we neglected to realize how we were painting ourselves into a corner. As Paul Aiken from The Author’s Guild pointed out in his article “Inertia, unfortunately, is embedded in the contractual landscape. If the publisher were to offer more equitable e-royalties in new contracts, it would ripple through much of the publisher’s catalog: most major trade publishers have thousands of contracts that require an automatic adjustment or renegotiation of e-book royalties if the publisher starts offering better terms… Given these substantial collateral costs, publishers will continue to strongly resist changes to their e-book royalties for new books.”

Should we then accept the status quo and abandon hope of ever effecting change with the big publishers?

This is not a solution because, by not demanding change, we not only create an unfair structure for our authors, we also allow authors to more easily abandon traditional publishers when we know this means losing out on the editorial, marketing and publishing help that these professionals do so well when they try.

Many have examined the e-book royalty math extensively and so I will only say that we must look at the origins of the Hard Cover 15% of list royalty. How did publishers, agents and authors come up with this percentage? Well, when you deduct the discount given to booksellers off the list price and the cost of producing a print book, half of the remaining proceeds roughly comes to 15% list. In other words, 50% net.

Consequently, the concept of offering 50% of the revenue is a long standing industry standard for Hard Cover royalties.

What is the solution?

Let’s take another look at Hard Cover royalties. While the lucky few are able to get a straight 15% hard cover royalty for their authors, this has not become the industry standard. Escalators are the standard and it is in escalators that we find the solution to the e-book royalty dilemma. With escalators, we can at last accommodate books whose sales do not justify a big piece of the pie and should stay at 25% as well as rewarding those authors whose major sales are happening in e-books. Escalators would allow everyone, including the authors and creators of the work, to share in success once the justified overhead costs are amortized.

This should be our new industry standard for e-books and it should not cause a massive shift in revenue for our publishers except for books that have earned it.

Now is the time to call our publishers and let them know. Remember that clause about e-book industry standards changing? Well now they have. That time is now.

Let me know what you think. Send me a Tweet at either @jvnla or @digitaar

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As Vice President of JVNLA [Jean V. Naggar Literary Agency], Jennifer Weltz has sold books domestically, internationally, and for film for nearly two decades. Coming from a mediation background, Jennifer sees herself as a liaison between her author and the editor and publishing house that acquire her author’s work. This role takes on a myriad of forms — business manager, confidant, task master, preliminary editor, and matchmaker — to name a few. Since Jennifer takes up an author’s career and not just a project, she is very careful and selective about signing on new authors.

The first shot was fired when Amazon acquired e-book rights to a trove of superhero graphic novels from DC Comics. Some one hundred volumes featuring Superman, Batman, Green Lantern, Watchmen and Neil Gaiman’s Sandman were secured to promote Amazon’s newly released tablet, the Kindle Fire.

All well and good – except that Amazon’s e-book rights were exclusive. Meaning that rival Barnes & Noble would be deprived of the right to carry the titles on its Nook e-reader.  B&N could still sell the print editions, however. But that’s a big however. B&N told DC that if they couldn’t have e-book rights they didn’t want anything. Whereupon they pulled the print editions of those DC graphic novels from 1300 stores.

The result was a lose-lose-lose-lose-win situation.  DC lost sales – as well as face for “placing greed over its fans.” in the words of New York Times‘s David Streitfeld. Barnes & Noble lost bookstore and Nook sales too, plus the nose it lost to spite its face.  Customers and fans lost access to the books in Nook (and Sony and Kobo and Apple iPad). And at least one author is unhappy – Neil Gaiman, who was blindsided by Amazon’s ploy. ““I was very excited when I heard that Sandman was coming out as an e-book, but was heartbroken when it was announced that I and my kids won’t have it on our readers.”

It will come as no surprise that the lone winner was Amazon, which nailed the exclusive and got a boost from B&N’s abandonment of the print edition.

This is just the first of many such battles. Says Streitfeld: “As Amazon seeks over the next few years to expand its tablet line, these collisions over content are likely to become routine.”

Details in In a Battle of the E-Readers, Booksellers Spurn Superheroes

Richard Curtis

That observation served as my slogan when I launched a campaign in the 1980s to make royalty statements more transparent.  Authors today take for granted that their publishers’ royalty statements will provide vital details such as the number of copies returned or royalties withheld as a reserve against returns.

But thirty years ago that information was not provided unless an author or his agent or lawyer made a colossal pest of himself. A typical statement simply reported that you had sold, say, 1000 copies and here’s a check for $1,000.  When you asked how the publisher arrived at that figure you were given no explanation.  I likened it to being told that a baseball player had 150 hits without being told how many times he had been at bat.

After other agents joined in the assault on publishers’ accounting practices the barriers finally crumbled and publishers at last started telling authors what they needed to know in order to assess the performance of their books.

I am telling you this because we are about to enter a new phase of transparency in royalty reporting.  To their great credit, Simon & Schuster,Random House and Hachette Book Group announced initiatives to open their sales database to authors and agents, who will be able to access the publishers’ websites and view recent and cumulative activity in their account.

You would imagine that I greet this new as the fulfillment of a lifelong dream. Yet I wonder if it’s such a hot idea. I’m thinking of the burden it puts on the publishers.

Authors as a whole are more enlightened about royalty accounting than the mushroom people of a few decades ago.  Nevertheless there is a great deal of data to understand, and if an author cannot penetrate such mysteries as reserves against returns, net-price versus list-price royalty rates, or the effects of high discounts on royalty calculations, he or she is going to  hit the phones or emails and demand answers.  Multiply that by hundreds if not thousands of perplexed authors and you can imagine that the bookkeeping departments of publishers could be besieged.

This is a Law of Unintended Consequences just waiting to happen.

Publishers should not be punished for the good deed of offering transparency, but before they lift the veil on their accounting they must make sure that their statements are crystal-clear and every term unambiguously defined. That said, we wish Simon & Schuster Random House and Hachette the very best of success in this commendable initiative.

Read Authors to Get Sales Data Online From 3 Big Publishers by Julie Bosman in the New York Times.

Richard Curtis

This observation found support in Andrew Wilkins’s coverage of what sounds like the quintessentially boring event of all time, the world’s first convention on metadata.  For those who are drawing a blank, metadata is all the stuff that goes into an e-book that is not the book itself.  It includes such tedium-inducing items as the ISBN, jacket copy, cover image, publisher information, territorial rights, country codes, suggested retail prices in US and foreign currencies, BISAC code, and a host of other data.

Before you click out of this essay there is one more thing you need to know about metadata: without it the e-book industry would vanish off the face of the earth.  For unless your publisher provides it to Amazon, Barnes & Noble, Sony, Kobo Apple and other retailers, they will not carry your e-book.

“Good data isn’t just nice to have,” writes Andrew Wilkins of Publishing Perspectives, “these days, there can be serious commercial consequences if your book information isn’t correct.” Wilkins cites a Nielsen executive who notes that “those titles in Nielsen’s top-selling 85,000 with complete data records sold 70% more copies on average than those with incomplete metadata.”

Enough publishing people felt the subject vitally interesting enough to convene a conference about it at last week’s Frankfurt Book Fair. One attendee went so far as to declare “Managing data needs to be a strategic priority.” Maybe it would become one if we called it something else.  Wilkins nailed it when he lamented “Can’t we just choose another more sexy term?”

Now that we have your rapt attention, you can follow up by reading All About BISAC Codes, Mastering the Mysteries of Metadata and Looking for Tedium? E-Books Are Your Medium.

Richard Curtis

But after extolling the zero returnability of e-books I am slightly abashed to report that -  at one venue at least -  e-books are indeed returnable for full refund, no questions asked.

How abashed am I? 1.15330021291%  That happens to be the rate of returns viewed on the retailer record of one publisher’s  sales database over a one month period.  The retailer was Amazon Kindle.

A 1+% return rate is infinitesimal compared to that of the conventional trade book industry, where returns of 50% are not uncommon and even 75% is not unheard of. So we are definitely not complaining.  But we’re curious to know how e-book returnability works and who besides Amazon offers it.

To answer the second question first, it is not easy to ascertain the returns policy of Amazon’s rivals, but from what I have been able to ascertain, Barnes & Noble, Random House, Wiley and Simon & Schuster explicitly prohibit return of e-books. The policies of Kobo, Sony and Apple are not clear.

Amazon’s policy is stated clearly on its website:

Content you purchase from the Kindle Store is eligible for return and refund if we receive your request within 7 days of the date of purchase. Once a refund is issued, you will no longer have access to the item. To request a refund and return, click the Customer Service button in the Contact Us box in the right-hand column of this page to reach us via phone or e-mail. Please make sure to include the title of the item you wish to return in your request.

No strings seem to be attached to Amazon’s policy,  But I wondered why anyone would return an e-book.  Fantasy author Lindsay Buroker speculates that customers simply order the wrong book. “It’s very easy to buy ebooks (one-click) straight from your device,” she writes. “The Kindle also promptly asks you if it was a mistake and you want to return the ebook. My guess, based on the fact that my returns usually pop up simultaneously with corresponding new sales, is this is what happens most of the time.”

Other reasons include excessive typos, formatting issues, and the old standby: someone just didn’t like the book. The latter may not be as prevalent as you would imagine because of look-inside-the-book sampling that helps consumers judge a book before clicking the Buy button.

And of course, some people may download the book, read it before the seven day deadline expires, and return it.  The low returns rate suggests either that only a tiny percentage of Amazon customers are moochers, or more of them would be if they could only read faster.

However negligible Kindle returns may be, accepting them is good policy and another example of Amazon’s customer-friendly approach to retailing.

Richard Curtis

For instance, should a store charge more for an appearance by Charlaine Harris or Lee Child than it does for Joe or Jane Shmoe? How much more?  Is a Janet Evanovich event worth more than a Jody Picault or an Ann Patchett?  How much more?

The New York Times article by Julie Bosman and Matt Richtel explains the reasons for making attendees pay to hear an author speak in a book store. “Too many people regularly come to events having already bought a book online or planning to do so later,” the reporters explain. “Consumers now see the bookstore merely as another library — a place to browse, do informal research and pick up staff recommendations. ‘They type titles into their iPhones and go home,’” says one store manager. Another one says “We don’t like to have events where people can’t come for free, but we also can’t host big free events that cost us a lot money and everyone is buying books everywhere else.”

How does this in-store admission deal work? One California bookstores makes customers buy a gift card that admits them to the author appearance.  They can apply the card towards the purchase of the author’s book.

If you are outraged that stores are starting to charge admission for activities that up to now have been as free as the air, you’re probably unaware of how much those activities cost. A typical one for a reasonably well known author breaks even for the store and loses money for the publisher, according to The economics of bookstore events, an eye-opening analysis published a few years ago by Penguin’s Colleen Lindsay. So making customers pay is by no means off the wall.

Ostensibly, an appearance by a megastar like Harris or Evanovich is worth far more than one by an anonymous struggling newbie. But because those two authors guarantee a profitable event that will sell lots and lots of copies, doesn’t it stand to reason that an admission charge is unnecessary?

Does that mean the store should charge for Mr. or Ms. Unknown Author?  That doesn’t make sense either. Why would anybody pay to see someone they’ve never heard of?

In short, charging admission to author appearances, famous or otherwise, is a lousy idea.  But it’s a lousy idea whose time has come. Bookstores have seized on admission as a potential source of income and nothing is going to roll the practice back.  So look look for it to come to a bookstore near you.

Join the debate.  Read Come Meet the Author, but Open Your Wallet

Richard Curtis

The company issued its announcement in two parts. One was for series titles, raising the rate to 15% of net, the other for single titles, raising it to 25% of net.

Even better news is that the changes are retroactive.

Here’s the key text from the single title announcement.

Effective January 1, 2012, single title authors who are actively writing for Harlequin will receive a digital royalty rate of 25% of net digital receipts for each digital unit sold in the English language, United States and Canada, frontlist and single title backlist.

Given that these are more favorable terms than those in your existing contract(s), this notification will be considered the amendment to those contract(s).

The full text of both announcements may be seen here.

Richard Curtis