S&S Royalty Statements - Before

S&S Royalty Statements - After

In September of last year we took Simon & Schuster to task for its overweight and excessively detailed royalty statements. “Bloated” was the term we used. “The weight of the package has been known to induce hernias in even the stoutest of mail room clerks,” we observed, urging the publisher to reform its profligate ways. (See Simon & Schuster’s War on Trees)

What a difference one semi-annual royalty period makes. Our criticisms, reinforced by those of authors and literary agents including a committee of the Association of Authors’ Representatives, inspired Simon & Schuster to review its reporting practices and overhaul them from top to bottom. In the first week of March the publisher has opened its “Author Portal,” a dedicated, password-activated website containing PDFs of all statements and offering download and printing options. Furthermore, the statements have been “substantially redesigned” and streamlined.

One author’s statement shrank from 41 pages to 8, and an agent praised the new format as “concise, comprehensive, uncluttered, and easy to understand.” Our agency’s own statements slimmed down from 977 pages – two reams of paper – to 323. But we now have the option to print out any given page or produce a compact digital file to archive and/or email to authors. And because so many of those statements have had zero activity for years, the savings on our resources – and the environment – are tremendous.

Credit should be given where credit is due, and we take our hats off to Simon & Schuster for responding so thoroughly and swiftly to our challenge.

Richard Curtis

Note to readers: Digital Book World has invited me to post my blogs initially on its website before releasing them on E-Reads, and this content is re-published with DBW’s permission. Click here to view the original posting.

“Authors are like mushrooms,” a writer once told me. “They’re fed a lot of horseshit and kept in the dark”

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

Simon & Schuster has announced a new service for its company’s authors that will enable them – and their agents – to view recent sales, monitor the performance of their books, and create blogs, videos and news bulletins about their books.

Publishers Weekly Reports: “In addition to providing sales data–information which many in the industry say has become murkier as e-books sales increase but an outside player, like BookScan, has yet to release tracking information on e-books–Author Portal allows for the creation of everything from blogs to videos to news about books. The Web site also features tips on how authors can use things like Twitter and Facbook to gain more readers, and better interact with their existing readers.”

The royalty information service, free to authors of S&S, Pocket Books and other S&S imprints, is called MySales. Password-authorized content owners will be able to see sales aggregated by channel (such as print, e-books etc.).  We recently reported on S&S’s cumbersome royalty reporting procedures but we know they have earnestly been working with agents and authors to improve reporting, and hopefully the MySales initiative will contribute to that goal.

For details see this page on the S&S website.

Richard Curtis

Latest batch of S&S royalty statements weighs in at 15 pounds (less half a pound for agent Richard Curtis's nose) (Photo by Andy Ross)

Twice every year authors and agents gird their loins in anticipation of the arrival of Simon & Schuster’s royalty statements. This is no fanciful metaphor: some literally gird their loins, for the weight of the package has been known to induce hernias in even the stoutest of mail room clerks.

The welter of detail elaborated in tiny print is numbing. The bloated statements are badly organized and repetitious and, in this age of environmental concern, appallingly wasteful. The practice has been going on for approximately two decades, but after our office manager suggested we lease a dedicated storage facility for them at $400 a month I decided the time had come to speak out.

Having opened the latest parcel the approximate bulk and weight of a giant schnauzer, I am inviting my agent and author colleagues to join me in an appeal to Simon & Schuster to review its accounting procedures, study the clear and economical statements issued by many other publishers, and reform its profligate ways. I would be happy to provide examples that render in one or two pages what Simon & Schuster does in a dozen or more.

Here are the components of a typical statement for one book:

• Payee Summary - A cumulative synopsis of royalty and rights revenues less advances and other deductions, and the net amount (if any) payable for this royalty period. This summary covers all editions. 
• Title Summary – Prior balance, current activity, and cumulative balance for all editions of the title. This is a detailed reiteration of the Payee Summary.
  
• Royalty Earnings per edition. This is a detailed breakdown of prior, current and cumulative earnings and returns for each edition of the book. One collection of statements covers the hardcover, another the trade paperback, another the mass market edition. If the first edition of the hardcover was priced, say, at $25.99, the second $26.99, the third $29.99, each printing’s activity is detailed and totaled. 
• Royalty Deductions - Prior and current deductions are detailed. 
• Title Balance - thumbnail summary of prior, current and cumulative statement balance with net royalty if any due to the author.

For each format of the same book there is a new set of statements. For a typical novel published in hardcover, paperback and electronic formats the royalty statement totaled 14 pages. For one author of a popular series the royalty package totaled more than 500 pages – a ream of paper – and weighed in at five pounds. And that’s just for one author. And by the way, we have to make a copy of this package to send to every client, so double those numbers.

Let me make it clear that I have no objection to receiving checks that may accompany the statements. But I would feel a great deal better depositing them if I knew that an acre of trees had not died just so that I could report to clients that their books had earned $0.00 for the twelfth year in a row.

For years I was a strident campaigner for clarity in royalty statements, and I’m happy to say that as a result of pressure from author and agent organizations publishers at last began providing such vital statistics as returns and reserves against returns.  So it is ironic that I am complaining about excessive data. But the fact is that too much of it can obscure rather than illuminate a book’s performance.

TMI, Simon & Schuster! Time to go green.

Richard Curtis

“We will never acquire a book unless e-book rights are included.”

That is the prevailing doctrine governing the Big Six book business and it is as unshakeably rigid as the Credo of the Catechism. For a publisher to buy “P” without “E”  is to all but succumb to the status of printer, to become the dog wagged by the tail of e-books.

To make an exception, to acquire just the print rights and allow the author to retain e-book, sets such a treacherous precedent for the rest of the publishing industry that it would take an extraordinary author to move a publisher off that position.

Enter John Locke.

For those who confuse him with the 17th century philosopher (and no mean author himself), a visit to his website will quickly set you straight. No one will confuse A Girl Like You or The Love You Crave with his namesake’s Essay on Human Understanding.  The 21st century Locke is the phenomenal indie writer whose self-published Amazon thrillers have launched him into the rarefied stratosphere of the world’s most successful authors.  Above the stratosphere, actually, because to many fellow writers he resides on Olympus.

If he doesn’t reside there he has just moved a little closer, for Simon & Schuster has made him an exception to the aforesaid doctrine. Next winter S&S will commence print-only distribution of his books. which Locke himself will package.

One reason why publishers have resisted print-only deals is simple economics: it’s hard to imagine how to make a profit competing against cheaper e-book editions of the same titles. That goes in spades for John Locke whose Kindle editions sell for $.99, compared to a mass market or trade paperback in the vicinity of $7.99 or $16.99 respectively. But when you have a blockbuster author jamming bandwidth with downloads of his e-books, it stands to reason that a profitable percentage of that audience will want to own a hard copy.  For Simon & Schuster it absolutely stands to reason.  Which occasioned Locke to tip his hat to S&S and declare “I applaud Simon & Schuster’s incredible vision.”

So do we. Simon & Schuster’s publishing establishment allies may complain that S&S has betrayed them by opening the gates to the invading hordes of the self-published.  But there’s an even more important military lesson in the Locke deal: If you can’t lick ‘em, join ‘em.

Richard Curtis

Enhanced e-books.  Here today, gone tomorrow?

In a recent interview with Michael Healy, Director of Google’s Book Rights Registry, Simon & Schuster President and CEO Carolyn Reidy offered many cogent observations about the e-book business including the fact that e-books represent as much as 60% of the initial sales of a newly released book.  You can read it all on Teleread. However, many who read the dialogue may have missed this significant comment by Reidy (obviously condensed by the transcriber):

“Enhanced ebook market is not very strong and some of the biggest sellers have still been less than 2,000 copies. Still experimenting doesn’t appear that public is enthused by the concept. Don’t do any apps any more because are very expensive to make and get lost in the App Store, don’t know how to get them recognized in the mass of stuff in the store. Can’t put apps into the bookstore which makes it harder for them to be found.”

“Enhanced” has been the hot byword in publishing for the last year or two and has even been the cause of friction between publishers and film companies. Movie people feel that if a publisher makes a book that looks like a movie and sounds like a movie, it’s a movie and the publisher is infringing on the moviemaker’s territory.  If other publishers come to the same conclusion as Reidy – that it’s just too expensive, time-consuming and unprofitable – the enhanced e-book may die aborning and we will all wonder one day what the fuss was about.  Then you’ll remember that you heard it here first. (See One-Word Explanation of Why Enhanced E-Books Won’t Work.)

Richard Curtis

If you’re a sales rep for a publishing company, you can be replaced by a telemarketer. At least that seems to be the message communicated by Simon & Schuster.

Michael Cader reports in Publishers Lunch that S&S has cut nine field representatives, leaving but seven to service the book buying needs of a nation. An adjunct to this action is the establishment of a telemarketing group that will presumably service the needs of far-flung independent bookstores around the country.

S&S justifies its decision on “the changing nature of the market place.” That phrase should be nominated for the Understatement of the Year Award. The marketplace served by publisher field reps twenty or even ten years ago is all but unrecognizable, and what’s left of it is melting away like an ice cube in a teapot.

Up until the mid-1990s rural bookshops and paperback outlets like drugstores were serviced by traveling sales reps or independent distributors. These people not only understood the reading tastes of the communities on their routes but knew many of the readers personally. They knew that this bookshop catered to lovers of western fiction and that one to historical romance.

The system worked wonderfully well, but it suffered a major hammer blow in 1996 when several influential paperback distribution agencies let go of most of the independent driver/rack jobbers that covered all those rural bookstores. The reason was that the growing power of computers enabled these agencies to stock stores by remote control instead of employing human beings driving vans and station wagons. It wasn’t long before stores in Tuscaloosa or Paducah were being stocked from agencies in Chicago or Toronto who knew little if anything about what they liked to read. And actually it didn’t matter, because Chicago and Toronto simply shipped those stores the top fifteen or twenty New York Times bestselling titles anyway. (I’ve detailed this crucial moment in publishing history in The Rise and Fall of the Mass Market Paperback, Part 1 and Part 2.)

So much for mass market paperbacks. But there were still hardcover books being sold in mall bookstores, right? Wrong. As the 1990s progressed, closing of mall stores reached epidemic proportions as the major chains, especially Barnes & Noble, realized that store traffic simply didn’t justify keeping them open. At the same time the rise of Amazon shifted book buying patterns from the car to the armchair. Why drive into town when you could handle the transaction at home?

Given the withering of the rural bookstore market, why should we be surprised to hear S&S declare that “new field sales team will focus on the geographic regions where our sales are strongest–urban areas with a large base of key independent retail, wholesale, and educational accounts“?

The fact that it makes perfect economic sense doesn’t palliate the pain that independent bookshop owners and their customers feel to have one more tie to the publishing community severed. One store owner said it all in a tweet: “SO pissed to see my rep go. My one link to you is now someone who has NO idea about my store.”

In fairness to Simon & Schuster, this erosion of bookstore culture outside of the big cities is reflected in strategies pursued by every trade publisher. But that will not mitigate the sense among our country cousins that they’re having a lot of undesirable and inappropriate books shoved down their throats by (to use Dave Barry’s phrase) a bunch of “godless unpatriotic pierced-nose Volvo-driving France-loving left-wing communist latte-sucking tofu-chomping holistic-wacko neurotic vegan weenie perverts.”

Richard Curtis

Caroline Reidy (right), publisher of Simon & Schuster, has e-circulated a policy statement about online piracy. Notable is a description of S&S’s relationship with Scribd, which she described as “a location where pirated works were easily found.” Scribd has made an earnest effort to become respectable, occasioning Reidy to say “Our decision to sell ebooks at Scribd came only when we were satisfied that they would both make our works more available to online consumers and also diligently and innovatively combat piracy on their site.”

S&S’s anti-piracy initiative follows on the heels of one recently announced by Hachette, which has gone so far as to engage a company to monitor instances of piracy of its books. See Hachette Hires Anti-Piracy Hammer.

We don’t think S&S will complain if we pirate its statement in full, reprinted below, but from here on in we’ll be very careful about using S&S text. We don’t want to walk the plank with Caroline Reidy’s sword at our backs.

Richard Curtis
*****************************
SIMON & SCHUSTER STATEMENT CONCERNING ONLINE PIRACY

Online piracy of digital books is a matter of growing concern. Even as Simon & Schuster explores and partakes in the many new and exciting opportunities presented by the digital world, at the forefront of our digital strategy is a firm commitment to battling piracy.

Since Simon & Schuster began publishing ebooks more than ten years ago, the security of our authors’ copyrights has been a primary concern in every digital partnership or project we have undertaken. Unquestionably, however, as the digital world has expanded and ebooks have become more popular, the rise of peer-to-peer file sharing and sites that feature user-posted content has led to a higher level of unauthorized posting and sharing of our copyrighted content. Responding to these evolving threats requires vigilance and innovation.

We work to stop online piracy as promptly as we can. The Simon & Schuster legal department acts quickly to notify site operators and Internet Service Providers (ISPs) where piracy occurs, by issuing copyright infringement notices both for electronic versions of our books and for the sale of unauthorized physical editions at online booksellers. These notices generally have the desired result with respect to materials posted and hosted on third-party sites. Peer-to-peer file sharing presents more difficult challenges, but we are working to take advantage of evolving strategies to deter this kind of piracy as well.

More broadly, we seek to combat this situation with the wide range of tools at our command, including doing everything we can to create a robust marketplace where consumers can legally purchase the books they want in electronic formats. We have, for example, recently entered into an arrangement with Scribd, an online document site, to sell Simon & Schuster ebooks at their site. This follows a period in which Scribd attracted much negative publicity as a location where pirated works were easily found. Our decision to sell ebooks at Scribd came only when we were satisfied that they would both make our works more available to online consumers and also diligently and innovatively combat piracy on their site.

We are also working with our colleagues at other publishing houses, via the Association of American Publishers’ Online Piracy Working Group, to share information and best practices on an industry-wide basis.

As long as there have been publishers, there have been scofflaws who see fit to deprive authors of their livelihood. Enforcement is by its very nature an imperfect science. But as the potential for this kind of behavior is amplified in the digital world, keeping our content secure, enforcing our copyrights, and creating a robust marketplace for easily accessible, reasonably priced content will be the pillars upon which we build our future as a digital publisher.

As we move forward in these endeavors, the help of readers, authors, booksellers and concerned citizens will be critical. We ask that if you see Simon & Schuster books illegally posted online, you please bring this to our attention and we will review the matter and take prompt and appropriate action. We will need certain specific information in order to act effectively, and have provided an online form that may be used to notify us of any instances of abuse or infringement.

We hope you find this information helpful and thank you in advance for your help.

Ms. Mary Matalin
Threshold Editions
c/o Simon & Schuster

Dear Mary Matalin:

Richard Curtis here, CEO of E-Reads, the publishing company that made what we thought was an irresistible offer to Dick Cheney to publish his book. In case you missed our proposal you may read it here.

But I don’t want to sound like a sore loser. If I had to lose a bidding war, I’m relieved it’s to you. I was terrified it might end up with Harper, who would probably do the same kind of trashy treatment they did for Peggy Noonan’s The Case Against Hillary Clinton, with those made-up internal monologues and transcriptions of speeches Hillary never made. At least I can be confident that your approach to the Cheney book will be utterly responsible, something along the lines of your superb editorial job on Jerome Corsi’s The Obama Nation.

You described that book as “a piece of scholarship, and a good one at that,” and I could not agree more. Your impeccable vetting of Barack Obama’s extensive connections with Islam and radical politics, his Communist and socialist mentors, his close associations with members of the Weather Underground, his involvement in the slum-landlord empire of a notorious Chicago political fixer – well, Mary (if I may), reading that meticulously documented work was an inspiring reminder of why I went into the publishing business.

Nevertheless, I hope you will not be afraid to be stern in your dealings with Cheney. If there’s one thing I know about him, it’s that he has the utmost respect for those who hold people’s feet to the fire.

I realize that my role as underbidder for the Cheney book does not entitle me to any special consideration. Nevertheless, I am happy to share with you some of the suggestions I made to Mr. Cheney in my original pitch to him, and I hope you’ll adopt them. For what it’s worth, here’s what I think Cheney needs to discuss to make this book a blockbuster international bestseller:

• How he helped President Bush to deceive Congress and the American people into buying into a connection between Al Qaeda and the Iraq government under Saddam Hussein
• How he misrepresented available intelligence
• How he outed covert intelligence officer Valerie Plame and got his Chief of Staff Scooter Libby to take the fall
• How he steered no-bid government contracts to Halliburton, a company in which he has a multimillion dollar interest that has appreciated by thousands of percent since the war began
• How he undermined the Constitution
• How he suspended the right of Habeas Corpus
• How he subverted the rule of law
• How he instituted secret wiretapping and email monitoring of American citizens
• How he scammed America’s allies with Saddam’s “weapons of mass destruction”
• How he created a secret cabal of oil and other energy lobbyists
• How he sent thousands of young men and women to death and maiming in the prosecution of a “phony” war whose real goal was to exploit Middle East oil
• How he leveraged his office to create a policy of torture and brutality

Do these correspond to your own ideas? Have I missed anything?

Also, since it’s no longer of any use to us, I might as well give you the title that we’d planned to put on the book had we won the auction:

GO FUCK YOURSELF
My Life in High Crimes and Misdemeanors
by Dick Cheney

What do you think, Mary? Is that a winning title or what?

I invite you to reply to this open letter and I promise to promote your response in the widest public forum.

Yours truly,

Richard Curtis
President and CEO
E-Reads