Sunday, January 03, 1999 11:14 AM
The electronic book is finally here to stay. As you may know, three new electronic book readers have come on the market this year, the best known being the Rocket eBook from NuvoMedia, Inc. The consensus is that these new products will last, and I agree. Indeed, it is possible that they will drop in price and grow in popularity faster than we can imagine.
This is an exciting development; one full of potential benefits for authors and consumers alike. At the same time, the new electronic landscape is fraught with dangers to authors, their rights, their income and our industry.
eBook sales will also profoundly change international publishing. It is not going to far to say that the viability of British publishing—and, by extension, the very health of British literature—is endangered.
We must think very carefully before we rush into this new frontier. The precedents we set now—and we are being pressed to set them even as you read this message—will last for many years to come.
So, what is my position?
First, let me reassure everyone on one point: The new eBooks cannot be easily copied and shared. By contrast, electronic texts sold online for reading on PC’s are highly vulnerable to copying. That is one reason that I have urged caution to my clients who wish to license their work to any of the many start-up companies in this area. For out-of-print works it may be a way to achieve new life, or at least availability, but even so I feel that the tiny revenues involved do not outweigh the possibility of losing control of one’s work.
The new eBooks, on the other hand, are heavily encrypted and can only be read by the purchaser on their personal eBook reader. eBooks cannot be loaned; that is, not unless you loan the reader itself. (At the current price of $499 for the Rocket eBook, that would be like loaning someone your stereo system so they can listen to one CD.)
Another point of reassurance: We do not have to leap on to the bandwagon. There is still plenty of time to decide what we want out of the new eBooks licenses. No one is losing serious, or even sizeable, money by holding back. Only a few hundred titles are currently available for the Rocket eBook, and at a recent presentation to the agents’ association (AAR) executives from NuvoMedia admitted that monthly sales of all available titles are running “in the low four figures.” So relax. You are not missing out. Not yet.
The next point to understand is that authors are not licensing their titles directly to Rocket eBooks. Publishers are granting the licenses. And in some cases I, on your behalf , am being asked to approve these licenses and agree now to the terms on which royalties eventually will be paid to you on eBook sales.
Why not license titles directly? First, in most cases we do not control electronic text rights. Why not? Back in 1984, when CD-ROMs looked like the coming thing, a huge battle was fought over electronic rights. Publishers tried to grab everything forever and set absurdly low rates of compensation. The battle was settled when a position paper issued by the AAR separated electronic “text” rights from electronic “multimedia” rights. Texts were deemed just another form of the book, and control was ceded to publishers. Multimedia products were deemed adaptions, as with a movie, and control was (generally) retained by authors.
The second reason that we cannot yet license directly is that for individuals the cost of entry is too high. Printed books or electronic files must be converted to the eBooks format. The eBooks must then be maintained on a server (computer) to which Rocket eBooks has 24hour access. Fees for administration must also be paid to Rocket eBooks. Authors’ groups may someday form to make direct licensing possible, but for now Rocket eBooks is dealing only with publishers.
So, what about these licenses that publishers are asking us to approve? What’s in it for us?
First l must explain how Rocket eBooks are distributed, and what is the real cost to publishers. Currently, publishers generate the eBook, adapting existing electronic files and creating a “new” electronic editions for the Rocket eBook. Consumers then order titles online through barnesandnoble.com. The title, encrypted, is downloaded on to the consumer’s PC. From the PC, the title is transferred to the Rocket eBook via a cradle connected to the PC. Simple no?
Now, costs: of the retail price the consumer pays (which is generally the same as the lowest available print price) is currently split three ways: Rocket eBooks keeps 20%, Barnes and Noble keeps 40% and the publisher gets 40%. Are you with me so far?
The author’s share comes out of the publisher’s share. Thus, the maximum royalty currently would be 40%. That, of course, is not being offered. Instead, we are currently being offered in one case the “regular [i.e. lowest existing] trade book royalty” or in another case “ten percent of the publisher’s net receipts”. Do the math. 10% of the publisher’s 40% is 4% of the retail price. Not much, especially when you consider that the publisher’s costs are far lower than for a printed edition (on which you already receive higher royalties). And by the way, we know a great deal about publishers’ costs. Both I an other AAR agents have extensively researched the issue, and the results were candidly discussed at that same recent AAR meeting. Suffice it to say, publishers are salivating over a potential bonanza.
So what is fair for authors to receive? Not yet. We still have to consider the issue of territory.
Since eBooks are sold online, they can be ordered from anywhere in the world. That includes London, and everywhere else that there are electricity, computers and telephone lines. Now, suppose you have a British edition of your book...suddenly, British consumers can bypass that edition and buy the American edition at lower cost. Good for them, bad for you. And bad for British publishing in general.
That is not to mention the contract issues! Your British contract grants your British publisher exclusivity in their territory. By making the eBook available worldwide, you will breach that contract. On top of that, the pre-existence of an eBook edition will make it harder for your to sell your British rights to a publisher in the U.K. British publishers are already working on razor thin margins, and often say they must be the first to bring a book to Australia, New Zealand and continental Europe; otherwise, it is not worth even bothering to publish it. A pre-existing eBook will undoubtedly prove another easy reason for them to “pass” when they are offered a U.S. title. Perhaps you do not care. Perhaps you, like most big businesses and governments, see the future in worldwide open markets. Maybe you believe in the benefits of competition, or maybe even just want to make a buck any way you can. What’s wrong with that?
Here’s what’s wrong: Commerce may grow in open markets, but culture draws its strength from diversity. We need a healthy and separate British literature. And that, in turns, means that we need a healthy and separate British publishing industry. eBooks are a big threat to that.
To be fair, British authors and publishers may soon be able to undercut we Americans through online eBook sales, too. The barriers will go down on both sides of the ocean.
Considering all these points, I have formulated on a position for the Donald Maass Literary Agency and its clients. Here it is:
1) Where there is an existing license for British publication, we cannot authorize the license of eBooks.
2) Where there is the possibility of obtaining a British license, we cannot yet authorize the license of eBooks.
3) We can, however, contemplate such a license when a British sale no longer seems likely; generally, that will be at the time of first U.S. publication.
4) The fair royalty for authors is 20% of the retail price; alternately, we might accept 50% of the publisher’s net receipts, provided that the publisher is receiving 40% of retail.
5) Because retail arrangements and revenue splits on eBook sales are subject to change, all eBook licenses must be subject to renewal and renegotiation every five years.
So, there you have it. That is the position I will be bringing to publishers who are requesting approval of eBook licenses. We will see what happens!
By all means, please share this email with your friends in the writing community. I would also be interested in hearing your comments on the five points of my position. (Please reply by email only!)
Clients and friends, the future of publishing is going to be different and the change is beginning right now. The issues facing us are real and profound. They deserve our most careful consideration.
Thanks for your attention.
Your agent,
Don Maass
Guests: 246
Hidden: 0
Users: 0
D-Day
