News circulated this week on Random House’s digital imprints Hydra, Flirt, Alibi, and Loveswept, and unfortunately for the publisher, the news was not positive. Following the recent firestorm of rage directed at Random House over its terms for publication on any of its ebook-first imprints, the company issued a press release today addressing some of the angry concerns, mostly from major genre-specific author organizations.
As GoodEReader reported last week, several groups have lashed out at the lack of an advance and the complete reversal on the typical royalty model; rather, authors were being given what the publisher called a “profit sharing” model that the organizations and many agents and authors felt was shoving too much financial risk on the authors who signed these deals.
According to today’s press release, Random House will now begin offering the authors a choice between two payment models when working with those imprints. The first model is still the profit-sharing model, which gives the authors no advance and a fifty-fifty share of net profits. The second model follows a more traditional royalty setup, with authors receiving an advance against the royalties and then a standard 25% of royalties.
Under either model, there are some more wary terms. Authors can be charged for a portion of the marketing costs over the publisher’s initial investment of $10,000 for promotion, which will be taken out of the share of the royalties. Also, in either payment model, the publisher owns the rights to the work with an out-of-copyright clause that lets the title revert to the author if a minimum sales figure is not met after three years.
Whether or not this is enough of a concession to appease some ruffled authors and industry watchers remains to be seen, but for now, Random House’s response to the anxiety over its original announcement was swift and fair. Hopefully, that attention to the matter and expediency will be enough for the publisher to help all four imprints reach out to author clients.