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#16: Publisher Implosions

LBrownIII

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I'll concede the point.

I can't name many people in the industry who know more about that aspect than you do. I am not on that short list.
 

JLowder

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LBrownIII said:
I'll concede the point.

I can't name many people in the industry who know more about that aspect than you do. I am not on that short list.
Thanks.

The point on fiction aside, though, I think you raised a lot of great issues and were often right on target. And anything that educates potential freelancers about warning signs, particularly in the current rocky market, is a very good thing indeed. Keep up the good work.

Cheers,
Jim Lowder
 

thele

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JLowder said:
If a company solicits fiction and fails to release it, it's not proof that fiction is a problem, but rather that the publisher in question lacks basic business ability.
That's not necessarily true either. There are many possible reasons for not releasing something that was solicited. It’s also not always in the control of the publisher either. I'm not saying that it's right, I'm just saying that it's a stretch to claim that the publiser "lacks the basic business ability".

~Le
 

daemonica

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thele said:
That's not necessarily true either. There are many possible reasons for not releasing something that was solicited. It’s also not always in the control of the publisher either. I'm not saying that it's right, I'm just saying that it's a stretch to claim that the publiser "lacks the basic business ability".

~Le
Well, I understood his comment differently. From my humble impressions and the stories I've heard, yes, there are several cases where RPG publishers cancel fiction lines for different reasons (aka production costs, timing, line cancellations, etc.) but in reality, that does go back to running a business. If there's one thing that both Lloyd and James have made abundantly clear is that in order to be a freelancer (or a publisher for that matter) you have to know business in order to do business correctly and be successful.

Maybe James can jump in here and verify this, but I am not aware of any other industry that allows you to write an entire novel, not pay you for it, cancel it for whatever reason <i>regardless of whether or not you have a contract</i>, and not give you a "kill fee." In my book yes, that's a publisher (regardless of size) who "lacks basic business ability." Why? Because any business has an accounting system set up in place to account for expenses. I'm more familiar with the financial side of business, and I can say simply that: If a publisher doesn't look at their books or project conservatively to account for incurring the high cost of a novel, then yes, I would venture to say that they don't know business. This is true of any other business in any other industry, and I have seen businesses fail because of not paying attention to cash flow correctly.

Of course, I could be reading into the comment incorrectly and my apologies if I did. :)

M
 

JLowder

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thele said:
That's not necessarily true either. There are many possible reasons for not releasing something that was solicited. It’s also not always in the control of the publisher either. I'm not saying that it's right, I'm just saying that it's a stretch to claim that the publiser "lacks the basic business ability".
I was using the example in the context of the original column--assuming that the cancelation was to be attributed to problems with the publisher. That said, you're right that there can be reasons for products to be solicited and canceled other than simple lack of business ability. Sometimes a publisher needs to know when to pull the plug on a product or line that just isn't earning out, and printing a product you know isn't going to sell is throwing good money after bad.

No matter the cause, however, canceled projects are a workable red flag.

If you, as a freelancer, consider working with a company and they have many canceled products on their past schedule, it's a concern. Each of those products cost the company money they will not recover--opportunity cost, staff costs for setting up the project, whatever they paid for kill fees. The farther along the production road they were, the greater those costs were. So if they did everything with a project, just decided not to print it, they're out a lot. They might have had good reason for canceling, but that cancelation is a negative cash flow most hobby publishers can't simply absorb.

You have to look at other factors, too, to get the context of the cancelation.

If the ratio of canceled projects to published ones is high, it's a more serious concern. TSR used to do 100 or so products a year and cancel a couple. Not a big deal. Company X does five products a year and cancels a couple, it's a much bigger deal.

And the freelancer should find out what happened to the material the publisher solicited for the dead project. Did they pay authors and artists some sort of kill fee for the dead project? If the creatives met their deadlines and the project was canceled by the company, there should be some sort of kill fee involved. Also, what happened to the work? Did it revert back to the authors, minus any of the company's proprietary IP? If not, a freelancer should be very wary of sending that company material, especially if thay don't pay kill fees. If the project is canceled, you're out all your work for no money. Even if you are paid a kill fee, you may still be on the losing end because your work isn't being read in the product for which it was written and, if you didn't get it back, may never be read at all.

Cheers,
Jim Lowder
 
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JLowder

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daemonica said:
I am not aware of any other industry that allows you to write an entire novel, not pay you for it, cancel it for whatever reason <i>regardless of whether or not you have a contract</i>, and not give you a "kill fee." In my book yes, that's a publisher (regardless of size) who "lacks basic business ability."
A publisher that tries to make the freelancer take on an unfair burden for a dead project--when the freelancer met her or his obligations in the transaction--certainly lacks an understanding of how businesses operate. Or, perhaps, they are assuming the freelancers lack an understanding and will stand for giving up their work for no pay.

Now, if the freelancer blows deadlines or turns over work that fails to meet the contract's specifications, that's a different story. The contract should set out how the publisher can deal with that (subtracting $X from the payment due for each week late and so on), in just the same way it should spell out kill fees and reversion procedures, should the publisher not publish or pay for the freelancer's accepted work.

Cheers,
Jim Lowder
 

LBrownIII

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I believe all this about cancellations and kill fees applies only to word rate projects. In the larger publishing industry, royalty-paying publishers do not offer kill fees and can cancel the publication of your book at any time with no obligation to you.

One instance of this might be a non-fiction work where you exaggerated the market for the book in the marketing section of your proposal, and the publisher found out. Another might be a substantial and sudden decline in market demand for your book's sub-genre.

This might be another reason why, in the RPG industry, word rates are often superior to royalty rates.
 

JLowder

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LBrownIII said:
I believe all this about cancellations and kill fees applies only to word rate projects. In the larger publishing industry, royalty-paying publishers do not offer kill fees and can cancel the publication of your book at any time with no obligation to you.
Not so. Even within this industry, royalty-paying projects (like novels for WotC) pay a standard advance against royalties. Advances are part of a good contract whether you are being paid per word or by royalty.

Most of the mainstream publishing contracts I've seen make it clear that, should the publisher cancel the project for reasons other than author non-compliance, the advance (or a large portion of it) serves as a kill fee. If you lied in your proposal in a way that led the publisher to take the book when they would not have done so, had you told the truth, this would likely be cast as non-compliance should they catch on. If the publisher read the market wrong and later canned the project because of their own mistakes, you would be paid a kill fee under most reputable contracts.

The functional part of the process here is usually the advance, which doubles for a kill fee when the project goes off the tracks. It doesn't matter if you are being paid, at the end of the project, per word or a royalty.

Cheers,
James Lowder
 
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LBrownIII

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You're right about the advance, of course. Publishers don't expect authors to pay back advances (although that's one of those major myths about publishing out there).
 

JLowder

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LBrownIII said:
You're right about the advance, of course. Publishers don't expect authors to pay back advances (although that's one of those major myths about publishing out there).
Since advances tend to be relatively small for most authors, publishers often assume they'll double as kill fees. If the advance is structured correctly (so much on signing, so much at milestone #1, so much on final acceptance), it can indeed serve as a fair and progressive kill fee, in case the publisher pulls the plug on a line. Even when an author fails to produce anything for a contract, publishers will sometimes simply write off part of the advance--the part paid on signing--as a kill fee to be done with the matter.

Of course, a responsible writer or artist who fails to produce anything for a contract should feel obligated to return an advance, or to work with the publisher to come up with a fair kill fee, based on the amount of work completed.

Things get a little more frantic with publishers when you start talking about big-dollar advances--like Random House suing P. Diddy over the return of his $300,000 book advance, plus interest, for his never-written autobiography. See story here: http://msnbc.msn.com/id/6975658/

There's a whole PR component here, one that made a public brawl over the advance more likely. Random House hyped landing the P. Diddy book, along with the big money they paid to land it, so having nothing come of it left them with egg on their face.

Cheers,
James Lowder
 
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