Business Musings: Authors Guild 2016 Letter

On January 5, 2016, the Authors Guild released an open letter to “U.S. publishers—namely those who are members of the Association of American Publishers.” The letter, based on the fair contracts initiative that the Authors Guild started last year, informs publishers that they need to improve the standard contract model between writers and publishers.

Dozens of other writers’ organizations have signed onto this letter, and the Guild requests that writers’ organizations outside of the United States follow suit with their publishers in their countries.

The point of the letter is “to start a conversation within the industry about antiquated and unfair clauses in ‘standard’ book contracts.”

The letter is relatively short. You can read it here.

For those of you who don’t want to click away, here’s the meat of the letter:

What we demand is simple: Publishers need to revise many of their standard contract terms to make them more equitable. Authors should get at least 50% of net e-book income, not a mere 25%. They should not have their hands tied with non-compete and option clauses that can make it impossible for them to write new books without delay. They should not be forced to accept royalties that can decline by 50% when the publisher cuts its wholesale price by a single cent. They should be able to get the rights back when the publisher stops supporting a book.

And authors should be able to get a fair shake even if they don’t have powerful agents or lawyers. When negotiating with known agents, publishers often start from previously negotiated contracts that remove many of the most draconian provisions handed to unagented authors. Why not do the right thing by all authors and eliminate those provisions for everyone?

I agree with all of the points in these two paragraphs. Anyone who reads this blog regularly understands that I believe these “standard” book contracts are horrible. No writer should sign some of the clauses in these contracts, and no writer should ever consider licensing rights under many of these terms.

I wrote an entire book three years ago about contract terms writers should avoid. Unfortunately, the book needs updating—not because the terms I mentioned are gone now, but because even worse ones have joined them.

I believe writers should understand what they sign, and walk away from bad contracts. Simply knowing that publishers will negotiate many of these points will help writers in standing up for themselves—without agents, who make the problem worse, generally speaking.

(Agents, who are not lawyers, break the law when they practice law without a license. In some states, that’s a misdemeanor. In others, it’s a felony. But I digress.)

Writers can hire lawyers to negotiate for them, and believe me when I tell you that the lawyers will do a much better job for the writers who partner with them. Why do I use the word “partner”? Because I’ve seen some writers completely misunderstand what the lawyers tell them, and make matters worse. Writers need to understand that contracts are a unit, and changing one clause without changing another will sometimes not make a difference at all.

Most important of all, writers must understand that they are not selling their books to publishing companies. Writers are licensing pieces of the book’s copyright.

If you do not understand that, then get a copy of Nolo Press’s The Copyright Handbook, and read the dang thing. Then reread it and reread it and buy the updated version when it comes out, and read that one. When you work with a lawyer on contract negotiation, make sure you understand the advice you’re given, and make sure you agree with that advice before you take it.

Conversely, make sure your lawyer understands what you want, so they’re not simply doing what they think is best.

That was an important, but necessary, sidebar.

The sidebar does, however, show just one of the problems I have with the Authors Guild letter.

I want to support what the Authors Guild is doing here. I really do. I believe this “conversation” needs to commence. Writers—particularly writers of the Take Care of Me school—need to understand that their publishers and their agents are not their friends. Those two entities are in business for themselves and will devise contract terms to benefit them.

Most agents are vested in keeping their relationships with publishers smooth. If forced to choose between one of their authors and a Big Five Publisher, the agent will choose the Big Five Publisher, because that publisher provides more income and opportunity than the single author will (unless that author is a mega-bestseller a la James Patterson).

The Authors Guild letter will go a long way in educating Take Care of Me writers, who absolutely need to hear what the Guild is saying about contracts. The contracts are unfair. They’re ridiculously one sided, and I would wager that if some bestselling author with a bad contract went to Equity Court, the court would consider canceling the contract altogether. (However, you can never entirely predict what a court will do, which is why I’m hedging my bets here.)

So let me say: I’m glad that this conversation is happening. I’ve seen articles now on this letter in most of the mainstream media. Maybe writers will actually see it.

Unfortunately, the media so far has focused on the erroneous figures farther in the letter. To quote:

Authors’ income is down across all categories. According to a 2015 Authors Guild survey—our first since 2009—the writing-related income of full-time book authors dropped 30% over that time period, from $25,000 to $17,500. Part-time authors saw an even steeper slide: their writing income dropped 38%.

Let’s look at that money paragraph. “According to a 2015 Authors Guild survey…the writing-related income of full-time book authors dropped….”

So, the journalist in me, the one with many years experience and who used to run a newsroom, knows Journalism 101. Before a journalist takes theses statistics at face value, the journalist should ask exactly who the members are that the Authors Guild surveyed.

One click to the website provides a lot of answers.

The Authors Guild claims to be “the nation’s oldest and largest professional organization for writers.” It also claims to be “we have served as the collective voice of American authors.”

Let me categorically state right here that The Authors Guild does not—and never has—represented me. In the 1980s, when I was a brand-new nonfiction writer making about low five figures, I believed I should join the Authors Guild. (According to an online inflation calculator, low five figures then is the equivalent of $30-40,000 today.)

Back then, the Authors Guild dues were based on a percentage of my income. To join, I would have had to pay the Authors Guild more than I paid in monthly rent—and for that money, I would have received bupkis. Because the insurance the Guild offered was only available to New York residents (I lived in Wisconsin), and most of the other benefits were East-Coast based. However, I would have had the privilege of stating that I was a member. (Yippee!)

I’ve always been a bit of a value-for-my-dollar kinda girl, and frankly, paying more than my monthly rent for something that would bring me some kind of weird prestige with people I didn’t give a rats-ass about wasn’t worth the funds.

Now, as I poke around the website, I see that new memberships for the first year are $125. Now, it seems, that people who earn more are requested to pay more, but no longer required to. I have no idea when that change occurred, but it’s a sensible one that probably has expanded the membership from a prestige club to a—well, let’s say, a less prestigious club.

I’m not unusual, however, in my lack of an Authors Guild membership. I personally know hundreds, maybe thousands, of writers who earn a full-time living at their writing—and judging from a quick scan of the Authors Guild membership, only about 20 of the writers I personally know who are making a full-time living are Authors Guild members.

So who are these Authors Guild members?

Well, once I eliminated the names of old-time NYT bestsellers and writers who live in NY, a lot of the names I recognized were agents. Agents, and agent assistants. Agents are allowed to become “members at large” which is a non-voting category of membership, but clearly (clearly!) influential.

When I shut off my “know personally” filter and searched the list of member names. I recognized the bylines of many writers (most nonfiction), but found only the handful of New York Times bestsellers on the list.

Frankly, the paucity of New York Times bestselling fiction writers on that list startled me. (Most of the Big Names were once-every-five-years, research-heavy nonfiction writers.)

Some of the biggest New York Times bestsellers are not on the list. Nora Roberts, George R.R. Martin, and Stephenie Meyers aren’t here. Nor are James Patterson and John Grisham. Debbie Macomber isn’t there. Those six authors sell a lot of books, and make hundreds of millions (if not a billion) for traditional publishers. (Realize, however, that public declaration of membership is something the author can choose not to do, so I don’t know for a fact that these people are not members.)

Bestsellers who aren’t in the “mega” category aren’t on the list either. Lee Child isn’t there. Neither is Robert Crais or John Scalzi or Neil Gaiman. So when the Authors Guild says it represents “the collective voice of American authors,” it’s just representing the collective voice of a small handful of American authors, influential and non-influential alike.

The Authors Guild says it will accept self-published writers, which surprised me, because I didn’t see the name of a single major indie writer, like Marie Force or Hugh Howey.

So this “survey” of the membership doesn’t represent many of the very big name writers. Nor does the organization represent writers who do not make millions each year, but who are bringing in a respectable $500,000 to $900,000 per year.

Does this examination of the membership mean I doubt that full-time writers’ incomes are down 30% since 2009? Different question. I don’t think anyone has conducted that survey or poll. I suspect those results would be surprising.

I do know this: If you remove all hybrid, indie, and self-published authors from consideration (leaving only traditionally published authors), then writers’ income has declined in the past six years. I know for a fact that a lot of bestsellers are losing income because their sales have declined, but that decline won’t show up in most royalty statements until later this year. And a lot of the contracts of really big bestsellers don’t have the onerous contract terms that the Authors Guild lists.

But add the hybrid, indie, and self-published writers back into the mix, and I would wager that writers’ income has grown dramatically in the past six years. Author Earnings  provides more than enough information to allow me to make that statement with my wiggle-words attached. Why the wiggle-words? Because I don’t know how much traditionally published only writers’ incomes have declined. Enough to off-set many of the gains of the hybrid, indie, and self-published? I don’t know.

However, given the pool of writers that the Authors Guild represents, I absolutely believe that those writers have seen a drastic decline in income. Most of the writers in the visible list are mostly mainstream and literary, with very few genre names on board (except for a handful of mystery and children’s book writers that I saw). Almost all are traditionally published.

The traditionally published, bestselling nonfiction writers on the list seem to be people who’ve been in the business as long or longer than I have.

And as for the part-time writers, given how many Authors Guild members list themselves as “professor and professional writer,” or as “poet, educator, and consultant,” I completely believe the survey’s part-time statistic, that these people have lost 38% of their writing income in the past six years.

Most of the Authors Guild membership is traditionally published, trusted their agents to negotiate a good contract, and ended up with terrible terms that are even worse than they were a few years ago.

The fact that most of the successful genre writers (particularly from romance) aren’t on this list, the fact that there seem to be few to no successful self-published and/or hybrid writers on this list, and the fact that there are very few of the major bestsellers outside of a few categories on this list also skewed the numbers.

So that declarative paragraph about the drop in income, the one that has gotten quoted in Publishers Weekly and on NPR, is false. (NPR even got their damn headline wrong. This isn’t about writers’ wages, Lynn Neary. It’s about freelance writers, who are paid by the job. [Grumph])

If the Authors Guild letter had stated that the Authors Guild membership saw dramatic decreases, that letter would have been accurate. But the Authors Guild for some blind, ungodly reason, believes that it is “the collective voice of American authors” and doesn’t realize that it doesn’t even represent most of the successful authors in America.

I hate it when someone puts misleading information out into the public discussion. I hate it more when my colleagues in the journalism field accept those numbers without a thought or fact-check. All I did was a spot-check of the names on the members list and I knew immediately that the information was incomplete at best.

Reporters should have done the same. Yeah, maybe a reporter would have had to spot-check against the actual bestseller lists from the New York Times or (better) USA Today or maybe just looked at their own book shelves (virtual and otherwise) to see if their favorite writers were on the list.

But no one “reporting” this story did that. They used the damn press release to fill airtime or space, with no checking whatsoever.

(Okay. Sorry. Rant there. Over the course of the last few years, as the publishing landscape has changed dramatically, I have lost respect for several reporters whom I used to trust, when it became clear from their reporting on my industry that they do no research at all. None. Zip. Zilch. Nada. They would have been sent back into the field to get more information if they were working in the newsroom I used to run.)

That money paragraph is a huge problem with the Authors Guild letter, but the money paragraph did its job with the press. The money paragraph made the letter important enough to catch the eye of news directors and business editors so the story got reported.

So I even understand that. However, not even that money paragraph (which got me going on my rant) is the paragraph that angered me.

This is:

The [Authors Guild Fair Contract] Initiative’s fresh look at standard book contracts has proven without doubt that provisions that would never be acceptable in other contexts have long been taken for granted in publishing agreements. Authors are now standing together to say “no.”

I left off the final sentence of that paragraph. I will deal with it, and the tone of the letter, shortly.

But let’s consider that paragraph, which is the letter’s second paragraph. A “fresh look” has shown that provisions “that would never be acceptable in other contexts” have “long been taken for granted in publishing agreements.”

I do love passive voice. Because the missing clause here is “by the Authors Guild.”

Remember the Authors Guild claims to be “the nation’s oldest and largest professional organization for writers.” On its website, it also states, “The Guild advocates for authors on issues of copyright, fair contracts, free speech and tax fairness, and has initiated lawsuits in defense of authors’ rights, where necessary.”

These “antiquated” contract terms, long taken for granted, have existed for at least fifty years in the publishing industry. I can tell you for a fact that I’ve seen these terms since the mid-1980s in contracts.

Where the hell has the Authors Guild been? What kind of advice has it been giving its writers? Why hasn’t it stood up against bad publishing contracts before now?

Those questions aren’t rhetorical because I know the answers.

There are a variety of reasons that the Authors Guild never collectively rose up and fought bad publishing contracts in the past.

The first reason is the most important:

1. The Authors Guild has no clout—and never has

It is a true guild—in that it’s a loosely connected organization of people with similar interests. Because it does not represent most writers in North America, it can’t hold its members to collective action. It can’t bargain for anyone. It has no control over the people it represents, so it can’t force them to behave in a particular way.

The Authors Guild is an organization that provides access to its own services and (in theory) educates its members. It has a legal department as well as access to lawyers who will review contracts and explain them to the member who presented them. It helps with copyright issues.

It also has (I kid you not) a back-in-print program that makes them partners with a publisher(!) (Open Road Media) to put books back in print. That partnership alone would be a problem if this organization were anything other than a loose confederation of people with similar interests, but that’s all it is.

The Authors Guild is like any other writers’ organization: for every useful program it has (contract review), it has half a dozen questionable and problematic programs.

Unfortunately, since the Authors Guild is there to provide information and resources to uninformed writers, the writers have no way of knowing whether the services offered by the guild are worthwhile, unless they have an education in these same things from outside the guild.

Another reason why the guild never went after bad contracts in the past is this:

2. In the previous century, the leaders of the Guild were aware of the fact that publishing contracts vary from author to author, and from book to book

It seemed, at least from an outside perspective, that the people who ran the Guild in the 1980s and 1990s had an idea how business in general and the publishing business in particular worked.

The older version of the Guild had a clue that going after publishers collectively to get improved contract terms in general was the equivalent of pissing into the wind.

The statements that have emerged from the Guild in the last ten years show a frightening misunderstanding of how traditional publishing works. And that’s not even venturing into indie, hybrid or self publishing.

The people in charge of this organization—as a group—seem completely clueless about the business they’re advising their membership about.

If the people running the Guild in the past ten years actually had a clue, they would understand that teaching their writers to understand contracts in general alongside individual contract review would help their writers much more than this silly letter has. Teaching their writers how to negotiate and stand up for themselves effectively in a business situation would also help the writers.

But none of that is here—nor can it be—given the letter itself. I’ll explain more below.

3. A goodly portion of the Authors Guild membership does not want writers to learn business

Remember that agents can have an affiliated membership in the guild. Agents, as a class, have always had their own business interests at heart. But these days, agents, as a class have become more and more predatory.

It is not in any agent’s best interest for their supposed clients—writers—to have business savvy. Because savvy writers know that having an agent instead of a literary lawyer is a bad business practice. Agents slow down payments (or embezzle them), turn down projects that don’t pay enough in commission (often without the writer ever hearing of the project), and often want a percent of the writer’s copyright. And those agents who negotiate contracts are—as I mentioned above—practicing law without a license. Someday that will bite them in the ass—if any writer gets his head out of his own ass long enough to sue.

The points listed in the Authors Guild letter will help writers—yes—but they will also improve agents’ bottom line. Nowhere in this letter are predatory agent/author agreements mentioned. Nor are other egregious clauses such as the agency clause or any of the myriad traditional publishing clauses that benefit agents but might harm writers.

(Check out my Deal Breakers book, if you want to know what I mean. I’m not explaining in the comments.)

So…why is the Guild going after contracts now?

They told you in their letter. It’s the most quoted paragraph:

The publishing situation for members of the Authors Guild has become dire.

The membership has lost—without a change of contract—30-38% of their income. When member after member came to the Guild, wanting to know why their royalty checks have gotten smaller or vanished entirely, the Guild started to wake up to the existence of a problem. At first, the lovely brainiacs running the Guild blamed Amazon. Then the Amazon problem got resolved, agency pricing returned, and writers’ income continued to decline.

Someone with an actual brain decided to review contracts and realized that the way that the big conglomerates have interpreted contract terms has changed. The terms haven’t changed much, except to the conglomerates’ benefit, but the conglomerates, unlike the smaller publishing entities, started aggressively interpreting the discount clauses and out of print clauses to benefit the publishers.

And ten to fifteen years ago, as ebooks just started up, smart writers complained vociferously about the 25% of net clauses. Agents refused to negotiate those clauses, citing industry standard, and traditional publishing said they had no idea how to pay royalties on ebooks any other way.

In other words, no organization that I know of—not SFWA, not MWA, not RWA, and certainly not The Authors Guild —fought the implementation of 25% of net as ebook royalties. The publishers wanted 25% of net and the organizations rolled over, not understanding the problem.

My early contracts in those years treated ebooks as a subsidiary right. I got 50% of retail. Then as other authors, agents, and organizations caved, I had to fight to get 50% of gross.

Finally, I found myself facing 25% of net. That’s (fortunately) when I had the opportunity to indie-publish my books. And I took it. Because I knew that 25% of net will—by 2020—equal $0. There would never be a net income, just like there isn’t on big Hollywood movies. (It’s already going that way.)

The fact that the Authors Guild has done nothing for decades to help writers understand and negotiate their own contracts makes me furious. Particularly when the Guild, in a panic, has decided to beg publishers to be offer good terms.

Yeah, I said “beg.” Because this Authors Guild letter is one long whine.

We’re not making the money we used to. It’s because our members signed bad contracts. Please, Mister Publisher, don’t give us bad contracts in the future. Take pity on us. We’re poor stupid writers. We need help.

That tone, in the letter, is exactly why the Authors Guild can’t teach negotiation. Because you never, ever, ever go into a negotiation from a position of weakness. Yeah, you might not hold all the cards. You might not even hold more than one card.

But you play the hand you’re dealt with confidence. You always negotiate from a position of strength.

If the Authors Guild had brains and no agents, it would teach its members to negotiate their own contracts, to collectively refuse to sign the non-competes or the bad out-of-print clauses, and teach the writers to walk away from bad contracts.

The Guild would never be able to enforce this, because the writers with clout who belong to the Guild—the bestsellers—usually enter their negotiations from a position of strength. They often, as the letter notes, do not get offered these onerous contract terms.

If writers refused those onerous terms and walked away, and did so en masse, then publishers would have to change their business practices over all. But right now, publishers don’t have to. Those of us who have always fought back against bad contract terms have much better book contracts than people who never did. And many of us had no more clout than the average Authors Guild member.

We just negotiated from a position of strength.

However, I’ve now seen a dozen articles on the Authors Guild letter. The letter has become January’s conversation. Maybe a handful of writers will wake up and realize that it’s the contracts they signed combined with changes in the industry that have caused their royalties to decrease or disappear. Maybe those writers will actually demand better contracts in the future.

But that’s the most we can hope for from this letter—and this conversation. And really, that’s not a lot.

I’ve been doing a business blog every Thursday off and on since 2009—which is the year that Authors Guild writers started losing money. The industry started its dramatic change in 2009, and I needed to understand how that change would impact my writing business. So I have studied and blogged about the changes.

In the first few months, the blog became interactive—the readers suggested topics or expanded on my thoughts in the comments section. Sometimes the readers changed my opinions on things. And many, many times, readers have led me to links and stories I wouldn’t have found on my own. Thank you for all of that.

Even though all of that is really valuable, this blog has to remain financially self-sustaining. That’s why I include a donate button at the end of every business post, but I don’t do so on the fiction posts.

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“Business Musings: The Authors Guild 2016 Letter,” copyright © 2016 by Kristine Kathryn Rusch. Image at the top of the blog copyright © 2016 by Canstock Photo/daseugen.