The E-Book Show Down: Part Three

E-books are emerging as the latest battleground between writers and print publishers seeking to monetize online content. In this “reset” moment, writers need to be sure they set a fair precedent early on. Read Part One and Part Two of this three-part series. 

 

By Derek Finkle

 

The Walrus

In late October, The Walrus approached one of our writers about including a piece she’d written for the magazine in an e-book humour anthology it planned to publish to coincide with its upcoming tenth anniversary. The anthology was to contain the work of six Walrus writers.

The contract disclosed that Coach House Books in Toronto was publishing the e-book. The royalty structure worked as follows: First the e-book retailers  (i.e. the Kobos and Amazons) took their percentage (usually about 30 percent); next, Coach House Books would take its portion of the sale. (The contract did not disclose what Coach House Books’ percentage share would be). After those two shares had been deducted, the Walrus would then take 75 percent of whatever amount net revenue remained. Collectively, the six authors would then receive the remaining 25 percent, to be divided among them, resulting in about a 4 percent share per author.

The first question the agency wanted answered was the percentage share that Coach House Books would take, as that figure was essential information. Without it, the author had no way of knowing what her net royalty would be.

When we asked that question, Nic Boshart, Manager, Digital Initiatives, advised us that that when The Walrus Foundation had signed its contract with Coach House Books, the book publisher had asked the Walrus not to mention its percentage share in their author contract. He said he would check with Coach House Books to see if the publisher was comfortable with him sharing that number.

A few days later, he informed us that Coach House Books would take 20 percent of the net in exchange for “[e-book] conversion, data, sales reports and distribution to all of their channels.” What this meant was that after the e-book retailers had taken their cut, the net revenue would break down as follows: 20 percent to Coach House, 60 percent to the Walrus (or 75 percent of what was left after Coach House had taken its cut), and 20 percent to the six authors (again, 25 percent after Coach House).

Most traditional book publishers today are offering authors a 75/25 split on net e-book revenues (that’s not to say that all authors are agreeing to that split). It should be noted, however, that traditional book deals often involve an advance against royalties on both print and digital sales.

It should also be noted that with e-books only one party (i.e. the publisher) is generally standing in line ahead of the author to collect on the net revenues once the e-book retailer has taken a cut. In this case, there are two middlemen that have to be paid off first: a magazine (the Walrus) and a book publisher (Coach House Books) the magazine is using to market the e-book. As a result, the author stands to earn substantially less than what would be forthcoming in a standard 75/25 split with a book publisher.

The Walrus-Coach House Books deal raises several questions: Is the Walrus obliged to disclose Coach House Books’ percentage in its author contract? Is a 75/25 split fair to authors in this circumstance? And why does a web-savvy magazine like the Walrus need Coach House Books to produce an e-book?

The Canadian Writers Group is a much smaller operation than the Walrus, and we have produced e-books without the assistance of a book publisher. E-book platforms such as Kobo Writing Life and Kindle Direct Publishing provide authors and small publishers e-book conversion, data, sales reports, and distribution, in exchange, in part, for the 30 percent of gross revenues the retailers collect. If the Walrus published e-books directly, it could transfer Coach House’s 20 percent of net revenue to its writers, thus bringing the split between magazine and writers closer to 50/50.

Walrus publisher Shelley Ambrose did point out that Coach House Books will also help get their e-books into libraries. This is a fair point, although there are other services available that perform that service. They would take a comparable share to Coach House, but it would only apply to e-books disseminated to libraries, not all e-books.

In an email exchange I had with Ambrose, she said the deal allows the Walrus “to support an amazing and historic small publisher that, in turn, supports us and authors.” We have great respect and admiration for Coach House Books, but we’d argue that if the Walrus wants to support Coach House, itself and writers, a fairer way to do so would be to split its percentage with Coach House.

Ambrose further argues that the 75/25 royalty split between the Walrus and authors is based on the fact that the magazine has already paid for the right to publish the work in print and in digital form on the magazine’s web site. She pointed out in an email that the standard Walrus contract includes “all electronic rights, the right to store, reproduce, and distribute the work in whole or in part by any electronic means now known or in the future discovered.” She continued: “I guess we could have tried to take advantage of that by putting out the e-books without checking with, informing, or sharing revenue with anybody. But we didn’t (wouldn’t).”

Although Ambrose is saying that the Walrus wouldn’t release e-books without additional compensation to its authors, she is also suggesting that the Walrus could go that route if it chose to do so. In other words, she is arguing that the Walrus owns the right to disseminate writers’ work in any digital format (website, e-book etc.). By extension, Ambrose is also asserting that the fee the Walrus pays to a writer for his or her work at the front end of the process is a type of advance against the publication of an e-book. As Boshart wrote in an email: “Having already paid for the piece, if we split the net of the ebook sale, we would not be able to afford to edit and design them, curate the anthologies, keep up with admin or market the ebooks.

The Walrus also argued that Byliner and The Atavist pay a 50/50 split on new work only, and that no writer is paid 50 percent of net for repurposed work. I replied that in June, when our agencyreleased Patricia Pearson’s award-winning 1995 Saturday Night piece about Karla Homolka, “Behind Every Successful Psychopath,” we paid for the design, e-book creation, and marketing, and still split the net 50/50 with Pearson.

This summer, New York magazine produced an e-book anthology of its best feature writing over the previous five years. New York had, of course, purchased digital rights to the works, and all of the features had been on the magazine’s web site. Still, the magazine paid an additional fee to all of the writers whose work appeared in the e-book collection. Byliner, the publisher of the collection, provided the writers royalties on top of that. Furthermore, all of these writers would have been paid much more than is typical in Canada for the initial print and web rights.

Finally, Ambrose took the position in one of her e-mails that since the magazine owns non-exclusive rights to authors’ work, nothing is stopping them from “creating their OWN ebooks using self-publishing tools and retain[ing] 100% of the profits”. The notion makes no sense, however. What author would invest in creating an e-book for sale based on a Walrus story when that content is sitting on the Walrus’ website for free?

Since the original founders of the Walrus, Ken Alexander and David Berlin (neither of whom has been involved in the magazine for about four years), went public with their idea for a Harper’s-style Canadian publication in the spring of 2003, it has always been positioned as a friend to writers, if not a saviour of sorts. Alexander and Berlin generated a lot of buzz when they promised to pay writers $2 to $2.50 per word prior to the launch, as reported in this Globe and Mail article at the time:

“Alexander and Berlin want to [pay this much] not because they’re good guys, but because they want to see Canadian magazine writing take the proverbial quantum leap in erudition, style and content. ‘Can you properly put writers through their paces if you’re not paying them?’ asked Berlin recently. ‘With reasonable payment, you can be more demanding editorially.’”

Despite the best of intentions on their part, it was really only a matter of months after the arrival of the Walrus’ premiere issue in the fall of 2003 that complaints began to surface from many writers (and even editors on staff) about an erratic editorial process and extremely delayed payments to writers (the $2.50 per word rate also quickly dissolved into the ether). By late 2006, when Ambrose became publisher, I knew of a few writers who’d been waiting on invoices between six months to a year.

Ambrose told writers and other contributors that she had no choice but to pay those who could shut the magazine down – the gas company, the landlord etc – before writers got their share. Most writers were understanding and patient as possible (considering many had their own rent to pay), and eventually, after being granted charitable status and shoring up donors (editor and co-publisher John Macfarlane said that donations covered about 50 percent of the costs of producing the magazine as recently as 2010), the Walrus was able to shorten payment terms, though they’re still often three times longer than the norm. Again, many writers are agreeable because the Walrus is one of just a few forums for long-form journalism in Canada, it pays rates generally at about $1 per word and it has an educational mandate that promotes positive discourse both in print and through public forums and debates.

Where writers tend to struggle in their relationship with the Walrus, however, is that in pursuit of quality, award-winning content, the magazine has expectations that occasionally exceed its means. Similarly, the magazine has a tendency not to show writers the same level of flexibility, patience and sense of partnership that writers have granted to it. Not long ago, for instance, the Walrus asked a Toronto-based writer to profile a recently elected MP in Ottawa. When we inquired about travel to Ottawa – the writer felt he was going to have to interview a number of people in the nation’s capital to get the story – the managing editor said the magazine only had a couple of hundred dollars in its travel budget. How was the required trip to Ottawa going to work on that kind of money? The managing editor suggested a “super saver” train that went overnight to Ottawa and returned to Toronto the next night.

This arrangement didn’t really appeal to the writer, so we suggested reporting the piece from Toronto, as this seemed to be what the magazine could afford. The answer? No, that won’t work for us.

In early 2011, CWG writer Paul Wilson, a former editor of the Walrus in its pre-Ambrose days, published “The Archivist”, an award-winning piece for the magazine about Millennium Trilogy author Stieg Larsson.

Wilson had flown to Sweden on his own dime and, while there, did the reporting on what eventually became the Walrus piece. While he was writing it, the agency had interest from a major American magazine that wanted Wilson to write a piece about Larsson and journalism in Sweden from an American viewpoint. Wilson’s feature for the Walrus compared journalism practices in Sweden and Canada; for the American publication, the comparisons would focus on journalism issues south of the border. The two pieces would have some similarities and many differences.

There was one catch: The US publication was only interested if the Walrus kept their story off the Internet. We figured this wouldn’t be an issue, especially considering that Wilson had paid his own way to Sweden from Toronto. We were wrong.

Then managing editor Jared Bland told me that his hands were tied because the Walrus’ policy stated that it was part of the magazine’s educational mandate (the underpinning of its charitable status) to publish all of its content on its web site. Walrus editor, John Macfarlane, wouldn’t move on the matter, either. He asked Wilson to honour the contract he’d signed with the Walrus, which Wilson ultimately decided to do. In doing so, he lost an opportunity to write for a major American publication.

(One of the organizations that provides financial support to the Walrus, The Writers’ Trust, has, as part of its mission, the goal “to improve the status of writers.” I’m not sure how the Walrus’s rigidity in this scenario improved Wilson’s status as a writer –either with respect to his profile or his financial well-being.)

I am recounting the Paul Wilson story here because it raises a question about the Walrus’ current e-book initiative. If the Walrus’ policy regarding publishing writers’ work on its website is indeed a carved-in-stone policy flowing from its educational and charitable mandate, then how is it that the magazine can now suddenly remove content from its website because it has decided to sell it in e-book form?  I asked Ambrose for an answer to this question, but have yet to receive a reply.

Whether one thinks that the 75/25 split that the Walrus is offering its contributors on e-books is fair – Ambrose told me she won’t budge – it is certainly better for writers than having their work sit on the Walrus’ website for free. But the issue that authors should really be concentrating on now is how their digital rights will be treated at the Walrus moving forward. I say this because, a few months ago, the Walrus added the following clause to its standard freelance agreement:

“The Publisher agrees to remit to the Writer 25 percent of the actual net monies remitted to the Publisher from the sale of the Work as an ebook, or otherwise made available for sale in an electronic format. In the case of the Work being used with other materials to make an ebook, such as an anthology, or otherwise made available for sale in a collection by the Publisher, the writer will receive royalty based on a portion of the percentage equally distributed between all contributors to the collection.”

The clause is in addition to the Walrus’ usual clause granting the magazine general digital rights – i.e. the right to publish the author’s work on its website. What it means, basically, is that in addition to being able to publish a writer’s work for free on its web site, the Walrus can publish the work in e-book form whenever it wishes and the writers of that e-book, if it’s an anthology, will collectively get 25 percent of the money once the e-book retailers and Coach House, if involved, have taken their pieces of the pie.

Writers who don’t believe that this 75/25 split is fair – or writers who wish to hold onto digital rights to their work in order to produce their own e-books – will need to negotiate and navigate such clauses carefully. Whether the Walrus continues to maintain the inflexibility writers have grown accustomed to from much larger corporate, for-profit entities remains to be seen.

 

Conclusion

When all is said and done, I still believe that there is a place for good, old-fashioned stand-alone magazine features, but my experience with e-books leads me to believe that given this new opportunity, writers should be vigilant about refusing to give rights away that could make them money – and continue to make them money for quite a long time. Much has been written about the “long tail” potential of e-books. While books eventually get bumped from the shelves at your local bookstore, they don’t get bumped off Kindle or Kobo. At CWG, we have seen this phenomenon first-hand. Russell Smith’s e-book, Blindsided, published eight months ago, still gets purchased pretty much every day.

While not all e-books – in single or full-length format – are going to be as successful as Blindsided or Finding Karla – and e-book retailers still have plenty of growing to do (there is no Canadian version of Kindle Singles, for example), the time has come for writers to feel a little less fatalistic about the loss of e-rights. I am not saying that writers should never grant e-rights to print publications but I am saying this: when it comes to certain types of stories memoirs, true crime, investigative journalism or any work that has unique research and a distinct narrative – independent journalists would be well-advised to think seriously about hanging on to their digital rights and offering their work to newspapers and magazines on a print-only basis.

 

 

Posted on December 6, 2012 at 9:15 am by story board · · Tagged with: , , , ,

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