The Danger of New Services

I have the greatest respect for Kristine Kathryn Rusch. I read every post on the Business Rusch and I expect any serious author to do the same, such is the value of her knowledge and experience.

Her latest post is about e-book companies who take royalties in lieu of an up-front fee in order to publish an author’s work. Her opinion of them is very clear: avoid them like the plague, and on your head be it if you decide to go through them.

This is interesting because the Raynfall Agency, as I have envisioned it, is exactly that: a company that takes royalties in lieu of an up-front fee in order to publish an author’s work. You may ask how I feel about her essentially warning away all authors from my business.

My opinion on it is thus: she is absolutely right, and you should listen to her.

New and Untested

It would be really easy to be offended about being tarred with the same brush, as it were, but I have neither the energy or patience for that kind of absurdity. I know my own business well enough, and my whole operation is here for comment and discussion. What Kris says is right, down to the last word – most companies out there that do this kind of thing are not good deals for authors, and they are right to be wary as hell. If anything, it means the onus is on me to build trust and confidence, because this kind of business is new, untested, and ripe for abuse.

Here is how I will do it. I will go through the various points she brings up in the article, and see how I compare.

It wasn’t until I dug into that e-publishing service’s Terms of Use that I figured out what was going on. The bestselling romance writer didn’t write that post on her Facebook page. The e-service did. They handled all social media related to books for the author.

A huge no. Anyone who’s read my book on marketing knows this much: I refuse to do an author’s marketing for them, for various reasons. I may ask for access to social media accounts in order to do things like update a Facebook cover or Twitter background, but technical support is as far as it goes and I will never, ever post on them. I’ve told authors to change their passwords after I’m done so that I will not have access in the future.

My contract stipulates that I may provide technical support if needed, but only at the author’s request.

That’s not the scary part. The scary part is the Terms of Use that she had to agree to in order to go with this company.

Let me repeat: she agreed to a Terms of Use. She did not sign a contract.  She didn’t sign anything. To go into the website proper, you must click on the “agree” button for the Terms of Use. The only warning that writers will get about this horrible Terms of Use—and it is horrible—is on the FAQ, which states:

The Terms of Use look long and boring, but it’s essential that you read and understand them when you use [our company].

I have a contract which must be signed, and I ask that authors have a lawyer look at it so they are comfortable with it. I’m actually considering putting it up as a PDF download here for authors to read in the interests of transparency.

Then the next point says this:

The Service will evolve over time, and accordingly this Agreement may need to change over time. We reserve the right to change the terms of the Agreement at any time in our sole discretion. Changes to the terms of this Agreement will be effective on the date posted at the Website, unless we specify otherwise.

Neither I nor the author can change the terms of my contract without the agreement of the other. One book, one contract, no exceptions.

So let’s say I missed the changes. Most people would. We would be subject to this in the same provision:

Your continued use of our Services after we post changes will constitute your acceptance of these changes.

And in the next clause, the one on termination, there’s this:

All provisions of this Agreement that, by their nature, are intended to survive the termination of this Agreement will survive.

This is why I hate Terms of Use. They’re always one sided and frequently nuts. This, obviously, is not in my contract. Mine doesn’t change without the agreement of both parties, like, you know, all sane contracts the world over.

And then this POS gets even worse. Let’s say  you do cancel. Do you get the e-pub or MOBI files of your e-book, the one that  you paid for through 15% of your royalties? Nope. Those files are proprietary to this service.

Part of my termination clause stipulates that all production files for a book are packaged up, sans Raynfall markings, and delivered to the author by email, FTP, Dropbox, or whatever digital means is most convenient. This includes the epub, mobi, Scrivener files/docs, cover vectors… literally everything that went into making the final product, plus whatever copies of the final product I created. (I keep an archive copy).

By the way, the service doesn’t pay for copyedits or proofreading, and so you get charged for those services by a flat fee separately. If you read the bestselling romance writer’s supposed Facebook post, you can see why this service doesn’t do copy edits. But really, there’s no one at the service who knows how to design covers either, certainly not covers worthy of a New York Times bestselling author.

My contract stipulates that I handle the production, start to finish, like any other publisher, unless the author decides to bring in a third party or handle part of it themselves (which I have to sign off on, obviously). No extra fees.

Remember how it says up at the very top that the Terms of Use can change without notice? Well here’s a quote about royalty payments from farther down in the Terms of Use.

If you are not in breach of your obligations under this Agreement, for each eBook sold to an end user through the service, [this POS company] will pay you the applicable royalty set forth at [our website], net of refunds, bad debt, any applicable taxes charged to a customer or applied with respect to sales to a customer (including without limitation any VAT or sales tax) and our fee for managing the sale of your eBook through the Service (the “Management Fee”) as set forth at [on the FAQ page]. If your List Price for an eBook is higher than permitted by us or at any Retailer, we or that Retailer will be entitled to deem it modified so that it is equal to the maximum List Price permitted when calculating Royalties.

I don’t get the bad debts thing, I honestly don’t. Other than that, this is gibberish to me. Again, my contract doesn’t change without agreement, etc. My royalty structure is pretty straightforward: Amazon (or whoever) pays me royalties for sales of a book. I take my cut, which is 50% if the production cost isn’t covered and 10% otherwise. I pay the remainder to the author within thirty days. This is the same regardless of the price, and I don’t change the price without the author’s consent.

No extra fees, no net, no whatever. I don’t understand why anyone would make this so complicated.

If we terminate this Agreement in whole or in part because you have breached your representations and warranties or our Content Guidelines, you forfeit all Royalties not yet paid to you with respect to the eBooks subject to the termination….Our exercise of these rights does not limit any other rights we may have to withhold or offset Royalties or to exercise other remedies.

Okay. Those Content Guidelines? They’re also on the website—in a different place than the Management agreement and the FAQ—and subject to change at any time. So again, the service can change the guidelines to hang onto your money after you’ve terminated the service.

This clause actually makes me feel ill. The author forfeits royalties if they want to cancel the agreement? Good grief…

On termination, I take the book off Amazon or any other service. Even after termination, the author is entitled to the royalties from their book while it was sold under Raynfall, according to the usual 50/50 or 10/90 split depending on the production cost recovery. But even if I am owed money – and I would be, if that cost were not covered yet – there is no way in all the hells I’d hold back royalties for it. It’s asking for major trouble.

This, again, is part of my contract. Of the royalties accrued by a book, only my portion can go towards the production cost. The author’s portion is theirs alone. (Now, the author may still have to pay whatever of the production cost isn’t covered yet if they want to terminate the contract early, but that is handled separately from royalties to keep everything clear and above board.)

But wait! It gets even worse. The service might have other unnamed rights to withhold or hang onto your royalties and/or to pursue other remedies. Since this is in the royalty portion of the Terms of Use, that means that the word “remedy” most likely means money. The service might determine, because you violated their content guidelines, that you have to repay all of the money they ever paid you as a remedy.

Still want to sign with a company like this? At least five New York Times bestselling romance writers have. And 700 people at last count clicked the “like” button on that bestselling romance writer’s Facebook page.

That number makes me nauseous. I can’t even think about a company that acts like this. It’s like it’s designed to milk authors for money.

Nothing in this agreement holds the e-publishing service to anything. They don’t have to publish your books. They don’t have to return your books. They don’t have to pay you. They have no liability if they leave out twenty-five pages in the middle of one of your books or put someone else’s name “accidentally” as the author of that book.

They have no liability if they rewrite the entire book and keep it under your name.

My contract stipulates a publishing date. If the book isn’t published by that date, the contract automatically ends according to the termination clause. If I don’t address errors in my work on the production within thirty days, the contract automatically ends according to the termination clause. If I or the author knowingly breaks the contract, the contract automatically ends according to the termination clause.

Bottom line here, I have obligations when I sign this. So does the author. If either one of us doesn’t fulfil those obligations, then the contract finishes. Nothing else is even remotely fair. And we both have to sign off on the final product, so there’s no chance I’ll rewrite the book (HAH!) and keep it under their name.

A final word on all this

So many writers are giving 15% of their royalties to e-service providers to format their books without signing any agreement or contract at all. It’s either done by e-mail or worse, by phone or in person.

If the whole thing breaks down, then it’ll be a he-said she-said in court.

Think these things won’t go to court? Of course they will. The services are too new right now for any case to hit any docket. By 2020, we’ll see a bunch of these cases, or we will know people who have sued such and such company and lost their writing time down the rabbit hole of legal troubles.

If you don’t have the time to self-publish and you don’t have the money to pay someone up front, then don’t do it. That’s so much better than signing with one of these scam artists.

All I can say is that you need to read this article in full. And yes, I know what I’m quoting here – this is Kris saying not to use a business like mine. I am okay with this because I’m pretty sure of two things: one, I am not a scam artist or an idiot, and two, I am probably in the minority in that respect when it comes to this kind of business. I’m quoting this here because it’s more important that authors not be scammed.

It would be easy to be offended, and it would be easy to make loud proclamations to the effect that I’m not like those others. That would be telling, not showing, wouldn’t it? Just so much meaningless hot air. In truth, the only way forward for an honest businessperson in this area is to be vigilant, to prove themselves worthy of an author’s trust every day. Yes, this is a new area, but integrity in business never goes out of style.

As for me, well,  it doesn’t say ‘Fair and Equitable Publishing’ at the top of this page for nothing.

Related ArticlesHow a Traditional Publisher Can Harm an Author’s Career?The Author as CustomerBeware of Author Solutions