BOOKS
03/08/2013 01:22 pm ET

Random House Digital Imprints Offer Controversial Writer Contracts

This week, Random House generated controversy among writers over the terms of their contracts for two of their new digital-only imprints: Hydra, which focuses on science-fiction/fantasy genre and Alibi, which focuses on the mystery and thriller genres. These imprints were launched last November, along with Flirt, which publishes college-age stories. Loveswept, an ebook-only romance imprint, was already in existence.

The controversy became more widely discussed when leading professional organization Science Fiction & Fantasy Writers of America (SFWA) declared that works published by Hydra (which is not to be confused with Hydra Publications) would not be considered eligible as credentials for membership.

SWFA announced on its website yesterday:

"Hydra fails to pay authors an advance against royalties, as SFWA requires, and has contract terms that are onerous and unconscionable.

Hydra contracts also require authors to pay – through deductions from royalties due the authors – for the normal costs of doing business that should be borne by the publisher.

Hydra contracts are also for the life-of-copyright and include both primary and subsidiary rights. Such provisions are unacceptable."

On the highly respected Writer Beware blog, which focuses on literary scams usually reserved for the world of vanity presses, Victoria Strauss last week described the contracts as "second-class," saying that

"If Random House indeed intends to reach out to self-publishers with these new imprints, it may want to re-think its contract terms. It's hard for me to imagine even moderately successful self-publishers finding a deal like this attractive."

Random House responded to the criticism in an open letter, stating that:

"Hydra offers a different-- but potentially lucrative--publishing model for authors: a profit share. In the more traditional advance- plus-royalty model, the publisher takes all the financial risk up front, and recoups the advance before the author earns any cash royalties. With a profit-share model, there is no advance. Instead, the author and publisher share equally in the profits from each and every sale. In effect, we partner with the author for each book.

As with every business partnership, there are specific costs associated with bringing a book successfully to market... These costs could be much higher--and certainly be more stressful and labor-intensive to undertake--for an author with a self-publishing model. Profits are generated once those costs are subtracted from the sales revenue...

Our authors provide the storytelling, and we at Hydra support their creativity with best-in-class services throughout the publishing process."

This kind of thinking is much more in line with the lower end of the music industry, where artists are expected to pay for what is known as "recoupable expenses," which Knowthemusicbiz.com describes as including

"the artist’s advance, recording & producing costs, the costs of promoting, marketing and advertising the record, tour support, video production, packaging, manufacturing, shipping, warehousing expenses and mechanical royalties paid to songwriters."

However, music artists usually receive an advance to cover these costs, something that Hydra and the other imprints don't apparently offer to most authors.

Author and publishing expert Cory Doctorow said that the contract had "all the downsides of a DIY press, and all the downsides of a traditional press, and the upsides of neither."

Bestselling author John Scalzi on Wednesday described an Alibi contract he had seen as "A HORRIBLE AWFUL TERRIBLE APPALLING DISGUSTING CONTRACT WHICH IS BAD AND NO WRITER SHOULD SIGN IT EVER."

In a follow-up post, he said that the imprints were

"testing the fences, looking for weaknesses... if they can get away with it, why wouldn’t other publishers follow their lead, using the excuse of “this is how the business is these days”?

This is why authors and readers have to keep the fence electrified. Authors have to say, “no, this is bullshit” and refuse to deal with imprints offering these sorts of terms, and they have to tell other authors — including and especially aspiring ones, who are the most vulnerable to crap like this — that it’s bullshit, and explain why."

Today, anybody can self publish their own books on the same digital platforms (Kindle, Nook, iBooks) as these imprints. In doing so, they retain full rights to their work - but are also completely responsible for editing, cover design, marketing and more.

In return for signing one of these contracts, the imprints offer expertise in editing, marketing and potential print deals, among other areas - albeit with those costs shared by the author themselves, plus signing over the rights to their work for the length of the copyright term (currently 70 years after the author's death in the United States), an unusually onerous length of time for a professional deal.

One thing is for certain: as book sales fall and the publishing industry increasingly has to fight with other media for people's attention, discussions over the value and terms of book contracts are only going to become more fraught.

Are these terms too restrictive, or are we seeing the beginning of a new kind of publishing contract that will become 'the new normal'? Would you accept one of these contracts? Let us know in the comments!

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