Thursday, August 30, 2007

Top Five Signs of a Crumbling Publisher

I've been distressed lately by the number of small presses shutting their doors for various reasons, and even more distressed by the authors who are left hanging--bitter and unhappy and wondering what happened to their dreams.

The problem is compounded by the Internet and the juicy rumors that fly all over the place--some spot on, some wildly inaccurate.

The sad fact is, the demise of some publishers casts doubt on other publishers who might be doing just fine. I'm amazed at the number of rumors I hear about solid companies, while everyone seemed to be taken by surprise when the not-so-solid ones go out of business.

Writers need to not only BE CAREFUL who you sign a contract with, but also know the difference between rumors circulated by disgruntled authors and a company that's truly in trouble.

Here are some top warning signs that a publishing company is crumbling:

1. Sudden turnover in top staff.
2. Checks that are very late (like months to a year).
3. Checks that bounce (this is one of the best signs that it's time to leave--ignore excuses).
4. Staff quitting quickly and not being replaced (attrition).
5. Very rapid veering from what company is good at to strange new ventures.

Many of the rumors ("so and so ran off with the money;" "this company is in serious financial trouble;" etc.) are not always verifiable, but the five things I've listed are very good signs--gossip aside--that it's best you quietly look for another place to sell your work.

Please remember that I'm talking about extreme things--all the executives being replaced in a week, every author's check bouncing, the company going from publishing erotic e-books to print travel guides. If your check is a week late, that's not a sign of bankruptcy. If the company replaces a CFO, it might be just fine (people do move on).

So how do you avoid signing up with a shaky publisher in the first place? Research!

1. Buy the books--are they typo-free, well formatted, don't look cheap?

2. Talk to the authors (a wide cross-section, not just cheerleaders or disgruntled former authors)--ask for their good experiences and bad.

3. Ask about sales. Don't be embarrassed. It takes just as much energy and time to write a book that sells 25 e-copies as one that sells 2000. Some authors sell better than others of course, but it's good to know the potential sales you might reach.

4. Check out the publisher's website--is it professionally done and easy to use; is it easy to purchase the books?

5. Attend conferences where the publisher is presenting itself. Are the executives professional or a little flaky? Just because you and the CEO both call your cats Cuddle Poos doesn't mean she's a good person to run a publishing company.

6. Look at their boilerplate contract. Does it meet industry standard (there's a reason for industry standards). Is it negotiable? (Pray that it is.)

None of this guarantees your publisher will never have problems, but you can avoid the worst of them if you think it through beforehand. It is a new writer's instinct to leap at the first contract offered--'cause, duh, we're dying to be published--but you need to be happily published, not ripped off.

One aside about contracts---Never, EVER, sign a contract where the royalty clause says you get royalties on the "Net Proceeds" of a book. DON'T. You should get royalties on the retail cover price.

Why? Because the retail cover price is fixed. If you get a 37% royalty on an ebook that sells for $5.95, you get about $2.00 per book. Period.

"Net proceeds" might mean that the publisher says: "Oh, the reader paid 5.95, but it cost us this much for the cover, and this much to re-do the link page when it broke, and this much for the editor, and this much for my cat's manicure for the promo session . . ." whittling down your share of the pie to possibly nothing. I'm not saying all publishers who pay on net proceeds do this, but you've handed them the means to do it if they want to.

Rule of thumb: Do NOT sign a book contract (e- or print) where the royalties are paid on net proceeds. I don't care how many epublishers do this (EC does not--I have contracts with them). Authors cannot afford to let this become standard. Refuse--or get an agent to refuse for you.

People get very hung up on the "we keep the rights forever" clauses (which are negotiable--if not, don't sign), and completely miss the net proceeds garbage. The forest for the trees . . .

That is my rant about authors getting taken by shaky publishers. Research, READ your contract thoroughly, and keep an eye out for the warning signs. None of this guarantees a fantastic career, but you'll be much more comfortable on your way up.


Bonnie Vanak said...

Great column and advice. Read the contract. Worst is when the author's rights are tied up forever b/c the publisher closes its doors. You don't want that happening and be unable to sell that book elsewhere.

sixy said...

Thank you for the tips and advice. Penny

Mel said...

I've been wanting to know more about e-publishers and couldn't find information on how to weed out the good ones from the bad ones.

Thanks for the tips.