Category / Publishing Industry

by Edward Champion

Penguin Sues Elizabeth Wurtzel, Ana Marie Cox, and Other Authors Who Can’t Deliver Books

We report on Penguin’s twelve lawsuits against authors for not delivering manuscripts on time, a legal strategy to squeeze revenue from authors that isn’t out of character.

On Tuesday, The Smoking Gun reported that Penguin Group (USA), Inc. had filed a number of lawsuits against several authors for failing to write their books in a timely manner. In short, Penguin wants the authors to pony up the dough for manuscripts they didn’t deliver. In response to this, as Galleycat’s Jason Boog was quick to observe, Trident Media Group chairman Robert Gottlieb offered a tough, no nonsense statement at The Smoking Gun insinuating repercussions if any of his authors were crossed:

Authors beware. Books are rejected for reasons other than editorially and publishers then want their money back. Publishers want to reject manuscripts for any reason after an author has put time and effort into writing them all the while paying their bills. Another reason to have strong representation. If Penguin did this to one of Trident’s authors we could cut them out of all our submissions.

On Wednesday morning, Reluctant Habits learned that Penguin had filed a total of twelve lawsuits in the past week with the New York State Supreme Court. The full list of author defendants and damages sought is listed below:

1. Ana Marie Cox: An $81,250 advance, “as well as interest of not less than $50,000,” for “a humorous examination of the next generation of political activists.

2. Bob Morris: A $20,000 advance, “as well as interest of not less than $4,000,” for “a narrative about fishing lures and their history. The Work will examine early creators of fishing lures, the rise of Bass Pro Shops, cutting edge research behind the development of high-tech lures, and the science of why fish go for some lures and not others.”

3. Carol Guber: A $35,000 advance, “as well as interest of not less than $10,000,” for a two-book deal involving “a guide to managing Type II diabetes for women” and “a cookbook for diabetes with approximately 125 recipes.”

4. Reverend Conrad Tillard: Tillard received a $31,833 advance for a memoir “tracing his epic journey from the Ivy League to the Nation of Islam, his eventual fall-out with Louis Farrakhan, his crisis of faith, and the epiphany (at Harvard’s Divinity School) that brought him back to the religion of his youth.” Tillard paid back $5,000 of this advance after Penguin terminated his agreement. Now Penguin seeks the remaining $26,833, “plus interest of not less than $9,500.”

5. Deborah Branscum: A $10,000 advance, “as well as interest of not less than $2,000,” for Stuffola, which “traces our national journey from impoverished colony to Pack Rat Nation.”

6. Elizabeth Wurtzel: A $33,000 advance, “as well as interest of not less than $7,500,” for “a book for teenagers to help them cope with depression.”

7. Herman Rosenblat: A $30,000 advance, “as well as interest of not less than $10,000,” for “the amazing story of a Holocaust victim who survived a concentration camp because of a young girl who snuck him food. 17 years later the two met on a blind date and have been together ever since, married for 50 years.” (As Snopes observed on February 21, 2011, this story was revealed to be false. Thanks to Alex Heard for reminding us about this.)

8. Jamal Bryant: A $56,250 advance, “as well as interest of not less than $13,500,” for “a second book from the dynamic pastor of the Empowerment Temple, which inspires men and women to be empowered through faith in God.”

9. John Dizard: A $40,000 advance, “as well as interest of not less than $18,000,” for Gold Now, “an analytical forecast arguing the future success of gold investments and prophesying the decline of the American and European national currencies.”

10. Lucy Danielle Siegle: A $35,000 advance, “as well as interest of not less than $7,000,” for To Die For, “a reporter’s eye view [sic] of the environmental and human rights toll of the fashion business, and a look at the real story behind the clothes we wear, by Observer columnist Lucy Siegle.” (9/27 UPDATE: As Michael Orthofer observed on Twitter, To Die For was published in the UK.)

11. Marguerite Kelly: A $25,000 advance, “as well as interest of not less than $5,000,” for a “comprehensive guide” to “behavioral problems — their symptoms and cures.”

12. Rebecca Mead: A $20,000 advance, “as well as interest of not less than $2,000,” for “a collection of the author’s journalism.”

It remains unknown whether Penguin filed these lawsuits as an insurance measure against recent legal setbacks. A few weeks ago, after HarperCollins, Simon & Schuster, and Hachette agreed to settle in the Department of Justice’s collusion suit, Penguin vowed to fight with Apple and Macmillan. Penguin is also facing an age discrimination suit filed by former veteran employee Marilyn Ducksworth, who left, along with other employees, under mysterious circumstances. (It’s worth pointing out that Gottlieb has also been outspoken in his support for Ducksworth.)

Of course, when anyone fights a two-front war, it can’t be done without resources. Should Penguin prove victorious in its legal battles against these authors, the grand total to be earned is well over half a million dollars. Assuming that most of the authors opt to settle, this would still land Penguin a fairly comfortable sum.

The twelve lawsuits continue Penguin’s ongoing efforts to tap revenue through “outside the box” thinking. Penguin’s August purchase of Author Solutions, which Smashwords’s Mark Coker has identified as “one of the companies that put the ‘V’ in vanity,” suggests that Penguin’s new business strategy involves squeezing authors. The biggest surprise is that Penguin has extended this tactic to established authors.

It remains unknown whether Penguin will continue to file more lawsuits, but, in recent months, the company has proved more aggressive in its pursuit of lost monies. As Publishers Lunch’s Sarah Weinman reported on September 20, Penguin filed a lawsuit seeking $22,000 and interest from MacAdam/Cage over the ebook rights to Susan Vreeland’s Girl in Hyacinth Blue.

Representatives from Penguin did not wish to speak with us on the record.

by Edward Champion

Against the Status Galley

The so-called “status galley” — that is, a prepublication edition of a book, generally of massive size and/or literary challenge, possessed by an underpaid and often illiterate member of the publishing world who has no intention of reading beyond the first few chapters — is among the most vexing amalgams of materialism and literature that the 21st century has ever known. It is a relatively recent phenomenon, augmented by the Brobdignagian burst of journalists attending trade shows. The good ones are savvy enough to recognize a mini-Hubbert’s Peak among some publisher upon sight. I’m quibbling about those who take the galleys that they will never read or write about, who hector certain publicists and editors and peck away at the diminishing supply. This is admittedly a pedantic vexation, hardly commensurate with the junket whores in the film world or the predatory bastards who cripple working stiffs with a sneaky high-interest subprime loan that will cause them to toil unduly in their seventies, their eighties, and their nineties. But it bothers me nonetheless.

The status galley reduces a book not merely to a thing (let us accept that fetishism is ineluctable), but to a vapid item that is trotted around like a fashion accessory. And we’re talking about an item, often a work of art, isn’t even finished. If you have a status galley and boast about it, it is very likely that you have no particular interest in reading it. Nor are you courteous enough, like most avid literary people, to give it to someone who may be in need of it. You take a vital galley from the limited supply, horde some volume that has taken an author many years of hard labor and treat it like a bag of Doritos that you toss into the street.

This seems to me worse than the book pirate (largely mythical), who at least has some vested interest in reading a book or getting excited about an author. This seems to me worse than some guy at a book signing who asks an author the same question that she’s heard several hundred times. (At least, that hypothetical guy has enthusiasm.) Such actions may be executed through clumsiness or cluelessness, but they are at least sincere and enthusiastic in intent. However, to obtain a galley just so that you can have it is perhaps one of the most disrespectful acts you can perform. It does not come from a place of passion. It comes from a onyx sinkhole of consumerism. It comes from a place of needless competition, whereby you have the book that someone else does not. It works against the book’s undeniably communal nature. And it reveals you for the superficial con that you are.

Again, this is a highly pedantic concern. Probably nothing worth shooting up a post office over. But it bugs me.

by Edward Champion

Hachette Imposes Salary Cuts Across Board

An anonymous source has informed me that Alain Lemarchand, CEO & President of Hachette Filipacchi Media, has sent a memo to his employees.

Today’s business environment requires decisive and quick action for the welfare of the company. This includes a number of difficult decisions on my part, some of which impact you personally. In this case, I deliberated long and carefully before coming to the conclusion that one of the steps that needs to be taken immediately is a cut in base salaries. Effective April 27, 2009, the salaries of all exempt employees will be reduced by 6% and the salaries of non-exempt employees by 3%. In addition, we are changing the regular work day from 7 ½ hours to 8 hours. For non-exempt employees, overtime will continue to be calculated on a weekly basis and will be paid for all hours worked over 40 hours.

I understand that this economy has already had an impact on each of you and that this represents another loss. I am sorry for that. We hope that taking this measure across the company will save headcount in the long run. I know you join me in wanting this company to remain competitive in this challenging marketplace. I want to assure you that once the economic picture improves, we will reevaluate this decision.

I thank you for your continued dedication to your work. Your professionalism and contributions are essential to the ultimate performance and success of HFM U.S.

It remains unknown whether a similar memo involving similar salary sacrifices was distributed to the Hachette Book Group or Grand Central. But investigations are ongoing. And a bitchy and decidedly unprofessional comment left on this site today by executive editor Reagan Arthur would seem to suggest that she’s only 94% herself today.

by Edward Champion

The Publishing Industry: An Economic Thought Experiment

Case Study 1: During Presidents Day Weekend, the software company Valve tried out an experiment. Valve, the company behind the successful Half-Life franchise, temporarily halved the price for Left 4 Dead, a cooperative first-person shooter title, from $49.99 to $24.99, over the course of a few days through its centralized Steam client. The results exceeded Valve’s wildest expectations. Sales rose 3,000 percent, and the revenue generated over the weekend dwarfed the game’s sales during its launch. By temporarily offering the game at a price point that was affordable to everybody, and making the game instantly downloadable, not only was Valve able to breathe life into a four month-old game, but they were able to get more people attracted to the product. Valve’s DRM policy is fairly straightforward. If you purchased a game, you can download the game on another computer, should you login as that user. (This was, incidentally, how I was able to redownload Half-Life 2 last year after a move, when I had accidentally deleted my Steam files and couldn’t find the original disc that I had purchased. One overnight download and I was back in action, happily fragging alien creatures.)

There are a number of important points here.

1. Unlike the Kindle or the eReader, there isn’t an expensive entry point here. You don’t have to pay $400 to get started on Steam. You can download the client for free on the hardware you already have and just pay for the games. The cost is minimal and affordable.

2. Unlike the Kindle, the DRM rights aren’t limited to the device or a singular computer (unlike last year’s Spore DRM controversy). If your hard drive goes kaput, then you can download the game again on another computer. Simply identify yourself through your Steam ID, and you can download the game on as many PCs as you want.

3. By offering a variable price point that considered what the general (and probably out-of-work) consumer wanted, Valve was able to generate more interest in the title than they anticipated.

Case Study 2: For seven years, the comic book industry has offered Free Comic Book Day. The idea is this. The general consumer goes into a store, gets a few free comic books, and is reminded why comics are great in the first place. The consumer divagates through a store and purchases more titles. And the whole thing gets considerable media attention.

The smart retailers, like Mike Sterling, spiff up their stores and offer additional in-store sales: 10% off graphic novels, four for the price of three on manga. (And in Sterling’s case, the graphic novel sales alone paid for the cost of the FCBD floppies.) You get the community involved by making celebratory cakes. You get to find out what titles get people excited. You get to form relationships with potential new customers. You move product. (For Heroes Aren’t Hard to Find owner Shelton Drum, FCBD is one of the top three sales days of the year.) You get to demonstrate to people why they need to keep going to a comic book store. And, like the Valve experiment, there’s no expensive entry point. Plus, the consumers will walk away from the store with something.

Case Study 3: Board game manufacturers are now considering something that worked very well during the Great Depression. If you offer an American family a reasonably priced form of entertainment that will last for a long time, they may very well set aside $20 to buy the product during lean times. (According to a Hasbro spokesman, board games and puzzle sales rose 2% in 2008.)

Case Study 4: Soft Skull had a surprisingly profitable year in 2008 because the efforts here were focused on (1) knowing the audience and (2) working hard to connect the audience as intimately and personally as possible. (In other words, if you treat your audience like some dopey general demographic, why on earth would they bother to buy your product?)

* * *

So what do we take away from all this? How did these successes emerge during a recession? In each case, the individual’s daily realities were respected. There probably isn’t a lot of money to go around in the household, but there was just enough cash for a micropayment. The individual wasn’t asked to invest money she didn’t have in some fancy-schmancy technological doodad before purchasing an affordable form of entertainment. The individual received an affordable long-term option that would keep her entertained or occupied for many hours. The individual did not have to deal with invasive DRM that suggested she was a criminal. The individual was listened to and treated with respect by the retailer. And the retailer never assumed that it would make a sale. But the retailer likewise had opportunities to listen to what the audience wanted and to find out what it may be doing wrong.

So if there is a modicum of money to be made in a limping economy, why aren’t today’s publishers and book retailers accounting for these realities?

Most people who are now out of work cannot afford a $30 hardcover, let alone a $400 Kindle. And yet corporate arrogance keeps these units at prices unreasonable to someone unemployed who needs a little entertainment during an economic downturn. And what is the result? Anger boils to the surface. Long-term relationships with potential customers suffer because the corporate overlords remain inflexible on price point.

So if you’re a publisher or a bookseller, consider this. If you know that people can afford a $10 hardcover (as opposed to a $30 hardcover), why in the hell aren’t you learning from these examples? Why aren’t you offering a Valve-like time window where people can walk into a bookstore and purchase a few $10 hardcovers over a weekend? And why aren’t you promoting the hell out of this? Why isn’t there a Free Book Day in which you get to introduce people to the joys of books and you get to know your customers? Why aren’t you forming intimate and personal connections with readers so that they’ll continue to buy your products? And why aren’t you considering that they really don’t have a hell of a lot of cash to throw around right now?

Are you willing to take a hit on the first spate of units, much as Valve did, if there’s the possibility that you may just hit a thundering mother lode after the initial curve? Or do you want to continue to turn off readers?

Can you truly afford to refer to the territory between the coasts as “flyover states” when there are good people there who want to enjoy books right now? If you’re an author or a publicist, can you afford to thumb your nose up at any media opportunity that isn’t the New York Times Book Review? Or are you not really all that interested in establishing relationships? If you’re a newspaper or a magazine, why aren’t you citing the blogs or providing helpful URLs to the blogs that break the stories or make the connections? Why aren’t you hiring bloggers to write the articles? Don’t you realize that online audiences might come your way if they know that a particular voice is attached? And here’s a bold concept to consider. If you took the top 10,000 bloggers on Technorati and paid each of them $40,000 a year — a livable wage that would permit them all to carry out their work, which could also include serious investigations — that’s a cost of $400 million. For $400 million a year, someone could get the top 10,000 bloggers reporting for newspapers and seamlessly integrate their content into the great whole. And the newspapers could offer copy editing and journalistic resources so that their voices might improve. (Of course, you’d have to accept their unadulterated voices. For these voices, differing from the mainstream, are what caused these bloggers to rise up in the first place.)

If today’s publishers, booksellers, and media outlets hope to answer these questions and produce results similar to the above four case studies, then bolder ideas and experiments need to be attempted and shared with transparency in mind. It is not economically feasible to sit back and wait for the magic results of the stimulus package to trickle around. The current Dow Jones declivity has demonstrated the follies of lame ducks. The previous ways of doing things may very well be at an end: possibly with some permanence. But we won’t know this for sure until those in positions of power attempt a little innovation and modify the current formulas that aren’t working. Change, it seems, was something we hoped somebody else would do. But it’s now become quite apparent that today’s real innovators are those with the courage to take hold of their own destinies.

[UPDATE: Since this post, like many of these lengthy ones, originated from thoughts and musings I expressed on Twitter, here are a few related thoughts from others on the subject. @jimmydare observes that Orbit is experimenting with the $1 ebook. @AnnKingman pointed out that Record Store Day was a huge success for her local record store. (More details on what goes on at Record Store Day here.) @thebookmaven suggests that a Free Book Day might be one way that independent bookstores can compete with ebooks, and also suggests a $5 Book of Your Choice Day.]

by Edward Champion

Macmillan Lays Off 64, FSG in Severe Trouble

Shortly after last week’s wage freeze, Publishers Weekly‘s Jim Milliot is reporting that Macmillan Publishing has eliminated 64 positions. This is 4% of Macmillan’s U.S. workforce.

The Observer‘s Leon Neyfakh has more. There are currently unconfirmed rumors that as many as 15 people could be let go before the end of today. Among the FSG casualties: head of production Tom Consiglio and editor Denise Oswald. The Faber & Faber imprint appears to be getting absorbed or is possibly toast.

A report from the New York Times‘s Motoko Rich reveals that current Henry Holt president Dan Farley will assume responsibility for the newly formed Macmillan Children’s Publishing Group. But who will lead Henry Holt? Is this where more cuts are going to occur?

More details as they come in.

UPDATES FOLLOW BELOW:

3:45 PM: Based on tweets and emails, here is what I’ve been able to determine: The publicity department should be okay. Picador, Henry Holt, and Tor (latter bit via @pnh) appear to remain alive (for now). The cuts appear to be directed at FSG, aimed at fitting FSG imprints into the new reorganization. I am hoping to have specific reports to draw on later. But if you need to get some bearings on what’s happening today, this is the snapshot of things to come. Jonathan Galassi will be issuing a statement of some sort later today.

4:06 PM: @PublishersLunch: “Truman Talley, 84, is retiring after 11 years at the eponymous SMP imprint, and 60 years in publishing.”

4:09 PM: The Observer‘s Leon Neyfakh is reporting that the FSG children’s division is gone, and that it will be incorporated into the new Macmillan Children’s Publishing Group. No official word or statement yet from Galassi.

4:41 PM: No word yet from Galassi, and I’ve got to split. Do check out Twitter and the dependable Leon Neyfakh for any official word.