SFWA De-Lists Hydra; Random House Responds

Posted by Victoria Strauss for Writer Beware

Following on my post last week about unattractive deal terms at Random House’s new digital-only imprint, Hydra, the Science Fiction and Fantasy Writers of America has determined that Hydra will not be a qualifying market for SFWA membership.

SFWA has determined that works published by Random House’s electronic imprint Hydra can not be used as credentials for SFWA membership, and that Hydra is not an approved market. Hydra fails to pay authors an advance against royalties, as SFWA requires, and has contract terms that are onerous and unconscionable.

In a blistering blog post, SFWA President John Scalzi also criticized** Hydra’s terms:

This is a horrendously bad deal and if you are ever offered something like it, you should run away as fast as your legs or other conveyances will carry you.

Today, Random House responded to the critics, including me, in an open letter. As the letter requests, I’m posting it here in full, redacting only Ms. Dobson’s phone number.

Dear John, Victoria, Jaym and SFWA Members,

We read with interest your posts today about the new Random House digital imprints and our business model. While we respect your position, you’ll not be surprised to learn that we strongly disagree with it, and wish you had contacted us before you published your posts. We would appreciate you giving us an opportunity to share why we believe Hydra is an excellent publishing opportunity for the science fiction community by posting ours below to them.

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, and we state them very straightforwardly and transparently in our author agreements. 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. Hydra and the author split those profits equally from the very first sale.

When we acquire a title in the Hydra program, it is an all-encompassing collaboration. Our authors provide the storytelling, and we at Hydra support their creativity with best-in-class services throughout the publishing process: from dedicated editorial, cover design, copy editing and production, to publicity, digital marketing and social media tools, trade sales, academic and library sales, piracy protection, negotiating and selling of subsidiary rights, as well as access to Random House coop and merchandising programs. Together, we deliver the best science fiction, fantasy and horror books to the widest possible readership, thus giving authors maximum earning potential.

As a last point to the SFWA leadership, my colleagues and I would welcome the opportunity to meet with you at your earliest convenience to discuss the advantages of the Hydra business model, describe the program overall, and respond to any of your expressed concerns. Please let me know a good time for us to set up this meeting.

Many thanks and all the best,
Allison Dobson

Allison R. Dobson
V.P., Digital Publishing Director
Random House Publishing Group

I think we’ll have to wait for time to show whether Hydra really represents a lucrative business model for authors (I note RH’s careful pairing of “potentially” with “lucrative”). Hydra is speculative in more than just the genre it publishes: it, and digital-only imprints like it, are experiments, with authors as guinea pigs.

I also note that in an email I saw from Random House, ebook setup costs (editing, design, production) were estimated as “usually” amounting to “no more than a few hundred dollars”–so I can’t help wondering what level of services authors will actually receive.

In fairness, from what I’ve heard, Hydra is very willing to negotiate, and some authors seem to have been able to arrange considerably better terms for themselves. (I would love to be more precise, but I don’t want to inadvertently identify the people who’ve contacted me. If you’re curious, write to me and I’ll tell you.)

I’d welcome the chance to meet with Random House staff to discuss these issues. Hopefully this can be arranged in the near future.

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** While I agree with most of John’s points about Hydra’s deal terms, I don’t agree that life-of-copyright contracts are an automatic red flag. For one thing, they’re standard in the publishing industry (and that includes many smaller digital-only publishers). Is this fair? Does the publisher need it? Maybe not. But it’s a fact.

For another thing, as long as there’s precise reversion language that ensures a book goes out of print when sales fall below a reasonable minimum (“reasonable” being keyed to the publisher’s average sales expectations), life-of-copyright doesn’t have to be a problem. The publisher does not get to hold your rights indefinitely. When your book stops selling, you can demand reversion and get your rights back. I’ve done this, so I’m speaking from experience.

I have seen terrible life-of-copyright contracts where reversion was left entirely to the publisher’s discretion, or where there was no reversion clause at all. If a life-of-copyright rights grant is not offset by good reversion language, or if the publisher is unwilling to insert it at the author’s request, writers absolutely should run away. But in principle, life-of-copyright contracts do not have to be scary.

6 Responses

  1. Morgan Alreth

    With all respect. I have self-published several stories. I have even sold a few, although I admit not many as of yet. But as a potential “partner” under the Hydra imprint as described above, I’m going to share why I think this is a ripoff. No personal ofense to anyone is intended or implied.

    First, Ms. Dobson (who I am certain is a fine person, and totally honest in her intentions) is apparently confused about the actual cost of preparing and publishing an ebook. In effect, the only outlay is time and effort. Granted, this is time spent not creating. But I need to take a break sometimes anyway.

    Page layout software is easy to learn nowadays. Remarkably easy. Moreover, there are pre-designed templates literally all over the internet to fit every conceivable type of document. Anyone of normal intelligence who is capable of dealing with a word porcessor can readily learn page layout skills with minimal pain. After that, conversion software does the rest of it for you.

    Wherein lies the expense? Most writers already own a computer and word processing software. Page layout software is available for free. Many different programs are out there under the GPL license, or have been placed in the public domain.

    Regarding Print-On-Demand, the same thing holds true. If you are willing to do your own layout, there is no monetary cost at all.

    Cover art is a different matter. Some people can deal with making their own. For those who can’t, there are hordes and mobs and seething oceans of ambitious young people out there who are eager to make a name for themselves. These kids will gladly prepare a book cover for nominal expense. It might not be up to the standards that Random House would offer. Or then again, it might. I have seen some fairly unattractive book covers come out of major publishing houses.

    Editing services are available on free-lance basis. Prices are negotiable. Like anything else, quality control is up to the person in charge of production.

    My point is that any costs associated with preparing and publishing one’s own work range from nominal to moderate and, more to the point, are a one time thing. After that you take home 40% – 70% of your royalties. And no one has the right to tell you when, where, how, or with whom you can publish your work.

    Marketing? What marketing? I don’t see any marketing going on by the big houses, other than occasional ads popping up in my face on web pages when I am trying to browse. Those things either get clicked off, or cause me to move to another site by sheer reflex. I don’t read print magazines. Even if I did, an ad in a print mag or newspaper carries no weight with me when it comes to book buying. Nor does it seem to impress anyone else I know.

    From my research (granted, my research was independent and self-directed, and limited to publicly available sources) it seems that people buy books either because they were recommended, or because the title/cover caught their eye. Or sheer random impulse sometimes.

    I could easily be wrong of course. Even if I am totally wrong, I venture to doubt that Random House would be willing to put much effort into marketing my beginner’s efforts.

    The life of copyright clause may be standard. I don’t care. I’m sorry, but as someone who is coming into this business from outside, and looking at it with eyes that have been conditioned by the practices of other businesses, the whole life-of-coyright clause is appalling. Not gonna happen. Not with my stories. I don’t care how rough, amateurish, or downright poor my work might be. It’s *mine*.

    Again, no offense is intended. But then again, as a self-publisher I’m never going to qualify for SFWA membership anyway. I just read this site for the news and advice posts.

  2. cleve

    Hi,

    This or something like it may become the industry standard business model. The folks at Random House extended an invite to meet. Is anyone at Writer’s Beware taking them up on this offer?

    1. WriterBeware Post author

      I’ve indicated on the Writer Beware blog that I’d be very glad to meet with Random House staff. Hopefully this can be arranged.

    1. WriterBeware Post author

      Same as for any imprint. Editing, copy editing, cover and interior design, formatting (for numerous platforms), and marketing. Obviously there’s no cost for printing, binding, warehousing, and shipping. But that doesn’t mean it’s cheap to produce an ebook.

  3. Michael J. Sullivan

    I’m very opposed to life of copyright terms and I don’t know why SFWA, RWA, Author’s Guild, and agents aren’t doing anything to change this “industry standard.” As far as the amount f the “reasonable minimum” I think the publisher’s and the author’s assessment of what that number should be are not in the same ballpark. Why is “reasonable” being keyed to the publisher’s average sales expectations? Why isn’t “reasonable” keyed to the author’s expectation of income? I think mine is $250 a year which works out to about 1 book sold every 2-3 days. I’m confident that I can do better than that “on my own.” I transfer my right to the publisher in exchange for an income stream…when that stream is gone, they should cease to have the right.