Random House RESPONDED

Random House Rip-off

UPDATE

Random House responded and now the SFWA is happy.  For more information on the resolution of this conflict, go to New Hydra Communique.  Below is the original post about the conflict.

Hydra

Random House recently started a new imprint called Hydra for science fiction and fantasy stories; this imprint has new and improved conditions for Random House, worsening contract terms for authors in the process.  Hydra came to the attention of Writer Beware, in itself not good news for Hydra’s public relations.  The SFWA (Science Fiction Writers of America) have decreed Hydra to be a vanity publisher with unusually harsh T&C’s (terms and conditions) for authors.  Random House’s response to this exposure has confirmed authors’ previous opinions.  For the details, read on…

Writer Beware‘s mission statement is to shine a bright light into the dark corners of the shadow-world of literary scams, schemes, and pitfalls.  Their self-description begins:

Writer Beware ® is the public face of the Science Fiction and Fantasy Writers of America’s Committee on Writing Scams. We also receive sponsorship from the Mystery Writers of America. Like many genre-focused writers’ groups, SFWA and MWA are concerned not just with issues that affect professional authors, but with the problems and pitfalls that face aspiring writers. Writer Beware, founded in 1998, reflects that concern.

In her post Second-Class Contracts? Deal Terms at Random House’s Hydra ImprintVictoria Strauss begins explaining why Hydra looks like a self-publishing venture at first glance.  She goes on to cite problematic contract terms:

– It’s a life-of-copyright contract that includes both primary and subsidiary rights.

– There’s no advance. Net proceeds (defined as net income plus subrights income less the deductions detailed below) are split 50/50 between author and publisher.

– Deductions for ebook edition: “one-time out of pocket title set up costs” (editing, cover art, design, etc.), plus a “sales, marketing, and publicity fee” of 10% of net sales revenue.

– Deductions for print edition, if there is one: “actual direct out-of-pocket paper, printing and binding costs,” plus 6% of gross sales revenue to cover freight and warehousing costs.

John Scalzi discusses these terms and conditions

Some of the issues he raises are

1) No advance – the advance is often all an author receives and is the investment a publisher makes.  That investment provides motivation to sell the book; I’ve (Nalini) heard the amount paid for an advance by a large publishing house directly impacts on the amount slated for publicity.  Large publishing houses don’t provide review copies for books unless they’ve factored this in to the publicity budget.  Usually unmet requests for review copies are just quietly forgotten but I have an email from a large publisher telling me there were no review copies allocated for a particular book.  Thus a book slips into oblivion due to insufficient motivation on the part of the publisher.  (Also see my upcoming series on publicity in publishing.)

2. The author is being charged costs previously borne by the publisher.

Scalzi said:

…it wouldn’t surprise me if Random House’s charges and fees just somehow manage to zero out an author’s earnings for a year or two and possibly even longer. It should be noted that most books sell nearly all they are going to sell within the first couple of years; after that they get lost in the pile of newer releases, including from the author. Hydra’s deal model has the marvelous potential of cutting out the economic heart of the book for the writer — but not, it should be noted, for the publisher, who will do just fine because its costs have been mitigated up front.

Scalzi goes on to talk about music and how music companies have screwed over musicians. My son can cite a list of artists who encourage their fans to pirate their music: these musicians don’t receive anything from sales so they’re encouraging their fans not to make their label wealthier.  Wouldn’t it be ironic if the same thing started happening in publishing?

3. The contract is for the length of copyright.

Thus there is no end date, no out, no nothin’ including no future loophole in the event of new technology.  I believe copyright lasts FIFTY YEARS in most situations.

Scalzi says, ‘Hydra is a vanity publisher, in sum.’  For those not in the know, self-publishing has greater kudos than vanity publishing while vanity publishing is almost a dirty word in the industry.

Scalzi sums up with this:

The Hydra deal sheet… [is] not a contract of partners, it’s a contract a parasite offers to a host. But the fact is that if Hydra likes your stuff enough to want it, then you can probably find a real publisher, who offers a real partnership, including the payment of advances and the assumption of risk. Or you can publish it yourself, pay your costs up front (hey, they’re business expenses!) and keep everything you make.

In short: You can do better than Hydra. So do better.

Scalzi goes on to review Alibi’s author contract: Alibi is Hydra’s sister imprint. This review confirms previous impressions of Random House’s new tactics.

SFWA decrees Hydra is a vanity publisher

Scalzi is president of the SFWA.  Publishing with a vanity publisher is not a valid publishing credential.  Scalzi and the SFWA believe Hydra to be a vanity publisher with draconian T&C’s, therefore publishing with Hydra is not a valid credential for membership of the SFWA.

Publishers Weekly says:

the Science Fiction Writers of America (SFWA) came out swinging on Wednesday, with its president saying that it would not allow authors publishing with Random House’s e-only science fiction imprint Hydra to use that achievement as a credential for membership… The SFWA said the main reason for its decision is that Hydra “fails to pay authors an advance against royalties, as SFWA requires, and has contract terms that are onerous and unconscionable.”

Publishers Weekly goes on to publish the entirety of Random House’s open letter response.

Cory Doctorow of BoingBoing discusses Random House’s response to the SFWA:

…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…

There are other options for doing the same [publishing your book sourcing external professional assistance]: 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. 

[emphasis mine – Nalini Haynes]

So, buyer beware.  Or in this case, seller beware.