Random House 'Hydra' Imprint Publishing Terms

[Steerpike]

Well, at least the terms from one of their agreements. Looks like an imprint to avoid. There are a number of sites online where people are commenting on this. This one is from John Scalzi:

Note to SF/F Writers: Random House’s Hydra Imprint Has Appallingly Bad Contract Terms

 

[CupofJoe]

I don't agree with it and I hate to say it but that all sounds like fairly standard stuff in the "new economy".
and they wonder why people self-publish...

 

[Devor]

Wow that looks bad. Self-Publish over that God-awful contract, for sure.

 

[Kevin O. McLaughlin]

The funny thing is...some of the stuff Scalzi mentions in those essays (he wrote another one about one of RH's other new vanity epub operations, using an actual contract he had in hand) are staples in modern NYC publishing contracts. Things like clauses which give the publisher rights for duration of copyright are normal. And far from agents telling writers to run away, most agents are telling their writers to sign those contracts.

Admittedly, they're not generally as bad as the Hydra ones - that's TRULY a "worst in breed" example. There are some absolutely horrific contracts out there from "big five" imprints that agents are telling writers to sign, though. As much as I like John's writing and think he's been a great SFWA president, I think it's alarming that he's so out of touch with what's actually being offered in contracts over the last few years for writers of less stature than himself.

 

[Steerpike]

Random House / Hydra Responds:

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

 

[Steerpike]

SFWA Responds to the response

Dear Ms. Dobson:Thank you for your letter regarding Random House and Hydra, and your interest in speaking with us.
Unfortunately, there is very little to discuss. SFWA has determined to its own satisfaction that Hydra does not meet our minimum standards for a qualifying market, as its contract does not offer an advance. Additionally, your attempt to shift to the author costs customarily borne by the publisher is, simply, outrageous and egregious. The first of these things alone would disqualify Hydra as a qualifying market. It is the second of these things, however, that causes us to believe that Hydra intends to act in a predatory manner towards authors, and in particular toward newer authors who may not have the experience to recognize the extent to which your contract is beyond the pale of standard publishing practices.
You extol your business model as “different”; the more accurate description, we believe, is “exploitative.” We are particularly disappointed to see it arising out of Random House, a well-regarded, long-standing publishing firm. Bluntly put, Random House should know better.
If Hydra is willing to assume the costs long assumed by publishers rather than attempting to shift those costs to authors, and is willing to pay advances in line with SFWA minimum rates at the very least, we will be willing to reconsider it as a qualifying market, and as a suitable home for writers. Until that time, however, we cannot do either, and will warn writers about Hydra.
Additionally: Our president has seen a contract for Alibi, the sibling imprint of Hydra, and has noted that it features the same worrying lack of advances and attempts to set the costs of publication onto the author, to the advantage of the publisher. For that reason, the board has voted to keep Alibi from being considered a qualifying market for SFWA membership. If we learn that the standard contracts for Flirt and Loveswept, Random House’s two other eBook-only imprints, feature similar language and actions, they will also be excluded.
The contracts of these imprints mean that SFWA will now be watching Random House very closely. If the egregious features of Hydra and Alibi’s contracts begin to make their way into the contracts of Random House’s other imprints, particularly Del Rey and Spectra, we will be required to act, up to and including delisting Random House as a whole as a qualifying market for SFWA.
We urge you to reconsider your business model for Hydra and Alibi. It is bad for authors, it is bad for the publishing industry, and it is extraordinarily bad for the reputation of Random House as an equitable partner for writers.
Yours,
The Board of the Science Fiction and Fantasy Writers of America

 

[Benjamin Clayborne]

I notice in the Random House response that she says:

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.

How are there profits on the very first sale if there's all these up-front costs to pay back? There can only be profit on the very first sale if there's no up-front costs. There's revenue from the very first sale, but there can't possibly be any profits yet.

I haven't seen the contract myself (it appears neither Scalzi or Writer Beware link to it) but it's hard to imagine that they're both completely wrong.

 

[Devor]

Admittedly, they transfer both risk and profits to the author, but they do so knowing that the vast majority of books under this contract won't succeed. Instead of never collecting royalties because they don't pay out their advance, many authors will never collect royalties because they won't pay out the upfront costs. And only a handful of heavy sellers will do better under this contract than otherwise, but Hydra clearly thinks there's little chance of that any individual book.

The worst, though, is that since these are ebook-only deals, they actually have relatively little to offer by way of promotions and marketing. The big advantage of a mainstream publisher is the chance to be on shelves, and that isn't here. So there isn't much they can do to promote you that you can't do yourself.

 

[MichaelSullivan]

The funny thing is...some of the stuff Scalzi mentions in those essays (he wrote another one about one of RH's other new vanity epub operations, using an actual contract he had in hand) are staples in modern NYC publishing contracts. Things like clauses which give the publisher rights for duration of copyright are normal. And far from agents telling writers to run away, most agents are telling their writers to sign those contracts.

I love your posts Kevin - I was thinking EXACTLY the same thing!! Why isn't Scalzi complaining about that toward traditional publishers?

Admittedly, they're not generally as bad as the Hydra ones - that's TRULY a "worst in breed" example. There are some absolutely horrific contracts out there from "big five" imprints that agents are telling writers to sign, though. As much as I like John's writing and think he's been a great SFWA president, I think it's alarming that he's so out of touch with what's actually being offered in contracts over the last few years for writers of less stature than himself.

I don't think he's out of touch...I think he's "in the system" and signs them and thinks "that's just the way it is." I tried to get a fixed length term on my last contract - no way to get that to budge. In my next book I demanded a fixed length term - and that was a "deal breaker." So I'm going to self-publish Hollow World.

Four authors have gotten print-only deals...so there is some chipping away...but each of them sell in the 500,000+ range. Part of the problem is authors are perpetuating the system because so many sign rather than saying, "Hell no!"

 

[Benjamin Clayborne]

Four authors have gotten print-only deals...so there is some chipping away...but each of them sell in the 500,000+ range. Part of the problem is authors are perpetuating the system because so many sign rather than saying, "Hell no!"

It's easy to understand why it happens, though. The supply of writers far exceeds the demand, I think. People will spend their whole lives writing just for a chance at success. So anything that looks remotely like success, a writer (one who has not yet had actual success) will likely leap at.

 

[Telcontar]

The same is true for many creative endeavors. I used to pursue acting professionally, and learned quickly that even successful area actors - who've been making their living on the stage for decades - make extremely little income. I met a 60 year old woman who says she averages maybe 20k a year. She does shows year-round (time investment probably equates to a 50 or 60-hour work week).

There are so many people chasing the dream that it pushes down the value of any one of us, and our work. The new age of the artist-entrepreneur (with self-publishing) will hopefully help the situation both by offering another option to artists AND by forcing some business sense into our gestalt culture.

 

[MichaelSullivan]

It's easy to understand why it happens, though. The supply of writers far exceeds the demand, I think. People will spend their whole lives writing just for a chance at success. So anything that looks remotely like success, a writer (one who has not yet had actual success) will likely leap at.

Oh without a doubt, not to mention that there are some things that unless you do have sales at astronomical levels, you just won't be able to do anything about. I always love it when I see aspiring authors say, "I'll only sell my ebook rights." or "I'll only take a limited term contract" and "Everything is negotiable." These are all great ideals but they have little foundation in the reality that is traditional publishing.

 

[MichaelSullivan]

The new age of the artist-entrepreneur (with self-publishing) will hopefully help the situation both by offering another option to artists AND by forcing some business sense into our gestalt culture.

That is certainly my hope, as well.

 

[Graylorne]

That is certainly my hope, as well.

Mine also, that's why I am glad I retained the international rights to my Revenaunt-series and sold only the Dutch ones. Now I can selfpub them under my own imprint. I am, at this moment at least, not even interested in a regular publisher's contract. I'm not at all fond of all the restrictions. Let's see were this brings me, first.
And your succes is quite inspirational, Michael.

 

[MichaelSullivan]

Mine also, that's why I am glad I retained the international rights to my Revenaunt-series and sold only the Dutch ones. Now I can selfpub them under my own imprint. I am, at this moment at least, not even interested in a regular publisher's contract. I'm not at all fond of all the restrictions. Let's see were this brings me, first.

I'm always happy when an author doesn't sell "World rights." I've made a TON of money through selling foreign language deals (14 so far). Unfortunately I couldn't get "North American English" rights so all English language rights are Orbit's. In the future I hope/plan to do NA only.

And your succes is quite inspirational, Michael.

Thanks - I'm glad to be of assistance anyway I can.

 

[BWFoster78]

As the CEO of a publishing company...

(OK, that's tongue firmly planted in cheek since I formed a company just to publish my books.)

Is this a horrible deal for an author?

I'm self-pubbing. My expenses are going to run well over $1500 total. That's not a huge deal for me (though not insignificant by any means), but, for some, that's quite a chunk of change. In exchange for someone fronting those costs, you give up half the future profits of your book.

Sounds like a decent deal if you don't have the upfront money to spend. I'd say that this is preferable to trying to make a go of it without editing and a good cover.

 

[MichaelSullivan]

As the CEO of a publishing company...

(OK, that's tongue firmly planted in cheek since I formed a company just to publish my books.)

Is this a horrible deal for an author?

I'm self-pubbing. My expenses are going to run well over $1500 total. That's not a huge deal for me (though not insignificant by any means), but, for some, that's quite a chunk of change. In exchange for someone fronting those costs, you give up half the future profits of your book.

Sounds like a decent deal if you don't have the upfront money to spend. I'd say that this is preferable to trying to make a go of it without editing and a good cover.

Yes it is horrible because there is more at stake. You are losing 50% of the money made by what they put out...but they have tied up all kinds of rights - possibly until 70 years past your life and you can't do anything. The book is "essentially dead" to you.

Consider this...

• I made twice as much as my six-figure advance on foreign sales than I got for my English rights
• Your fans will probably be cut off from paperback book forever - they have the rights and the chances of them exercising them is slim to none
• Similarly with audio rights.

Saving u $1,500 isn't that hard. Cut out going out to eat for a while, or drink less beer, or any other "luxury item." Do a "Kickstarter campaign" to earn the "up front money." Work on a shoe string budget - If you shop hard you can get a cover for $150 and editing for $350. Start off small - and reinvest for more editing and better covers as the income flows in.

 

[BWFoster78]

Yes it is horrible because there is more at stake. You are losing 50% of the money made by what they put out...but they have tied up all kinds of rights - possibly until 70 years past your life and you can't do anything. The book is "essentially dead" to you.

Consider this...

• I made twice as much as my six-figure advance on foreign sales than I got for my English rights
• Your fans will probably be cut off from paperback book forever - they have the rights and the chances of them exercising them is slim to none
• Similarly with audio rights.

Saving u $1,500 isn't that hard. Cut out going out to eat for a while, or drink less beer, or any other "luxury item." Do a "Kickstarter campaign" to earn the "up front money." Work on a shoe string budget - If you shop hard you can get a cover for $150 and editing for $350. Start off small - and reinvest for more editing and better covers as the income flows in.

Michael,

I get your point. I really do. I'm looking at this from a very different perspective, however.

First, I've read a lot of posts on these forums from people saying that there is absolutely no way for them to come up with that kind of money regardless of the necessity. It's hard for me to say that I know their financial situation better than them, so I tend to believe them.

Second. most people self publishing, especially for a first book, aren't going to sell all that many copies. The first book is a huge learning experience. This seems like an okay way to test the waters without devoting many of your own resources.

That being said, I would never do this. I have confidence in my ability to produce something that will eventually earn much more than the $1500 I'm going to spend and I can easily come up with that money to invest in myself.

If I were having money troubles or didn't have that confidence, I could see using a service like this.

 

[MichaelSullivan]

I find two parties involved in the mistreatment of authors.

1. Publishers who write incredibly lopsided contracts that take all the power from the author and gives it themselves.
2. Authors who are so desperate that let emotion trump logic.

The following quote by Bob Mayer is in relationship too Harlequin Romance, and their lousy contract, but you can insert just about any "name brand" publisher you want.

The problem is, HQ has a legion of wanna-bes who will sign a contract with HQ with their own arterial blood regardless of what's written in it.

Personally, I think the brand is tainted and it's probably not a logo you want on your book to begin with.

 

[Devor]

BWFoster:

The typical fair contract would have the publisher putting up something like:

$1,500 in cost
$5,000 advance

This contract has the publisher giving half the royalties to the author after that same $1,500 is covered. This means that the book has to raise $11,500 for the author to break even with the typical "fair" contract.

Consider the following:

- The publisher thinks you're going to fail, so they're not putting up much money to begin with.

- The publisher hedges this bet by claiming extra rights to the book, meaning that if you're a success, they've got you committed to their terms for the rest of the contract instead of taking the risk of negotiating a new contract later.

- We're assuming that $1,500 is the cost, but that's the publisher's decision, and they have considerations to consider outside the success of your book, like keeping cover artists and editors on call. If they expect your book to sell over $1,500, what's to stop them from blowing that on cover art or editing or ancillary costs that are more elaborate than you even need?

Under what circumstance is this a better deal than the typical "fair" contract? Only if the book is more successful than $10,000 + costs, but not successful enough to do anything else with it. But even in that case, I'm not really sure what you need the publisher for - they're not really very good at promoting ebooks at the moment.