recent controversy over deal terms at Hydra, Alibi, Loveswept, and Flirt.
Based on strong criticism from writers' groups, authors, and agents, Random House has decided to make major changes in its digital contract. Allison was kind enough to share these changes with me. She asked me to keep them confidential until they could be officially posted on the Random House website, which is why you didn't see this post yesterday.
A pdf of the announcement is here. Briefly, here are the changes:
- Authors will now be offered their choice of two options: a re-worked profit-sharing arrangement and a traditional advance-and-royalties deal.
For the profit-sharing arrangement, there's still no advance. But Random House has eliminated all chargebacks for digital editions, so the split between author and publisher is 50/50 of net revenue (actual sales income) from the first copy sold. In other words: no setup costs, no 10% deduction for sales and marketing. For print editions, if they are produced (and this won't be frequent; these are primarily ebook imprints), there will still be a chargeback for actual production and shipping costs (these costs will be fully broken out for the author ahead of time if a print edition is planned). Random House will cover general publicity costs for the imprint, and up to $10,000 of book-specific publicity. Any book-specific PR above that amount will be borne by the author and deducted from net revenue before the profit split--but such expenditures will be optional.
For the advance-and-royalty deal, authors will receive a traditional publishing contract, with the publisher covering 100% of costs. There will be an advance, and royalties will be paid at Random House's standard ebook royalty rate of 25% of net.
- The contract will still be life-of-copyright, but the reversion clause has been improved. As I've explained on this blog and elsewhere, I don't have a problem with life-of-copyright, as long as it's balanced by precise reversion language. That is now the case. Three years after publication, the author can demand reversion if sales fall below 300 copies over the 12 months preceding the demand.
- Random House will still take both primary publishing rights and subsidiary rights, but performance rights and transformative digital edition rights are no longer included. If Random House wants to acquire these, it will negotiate separately. Random House is also open to negotiation on other subrights.
Overall, I think this represents a significant improvement. I was impressed with Allison's openness to discussion, and with what seemed to me like a sincere commitment to responding to criticism and making the digital imprints' contracts more author-friendly.