Melanie Dulos of Harlequin kindly gave us permission to quote this letter, sent in response to my Pondering of last week.
Hello Lynne,
I am reaching out on behalf of Harlequin to correct some details included in your blog post “PONDERING: Harlequin Profits Plummet”/August 5, 2013, specifically that “advances are right down” (http://goodbadandunread.com/2013/08/05/pondering-harlequin-profits-plummet/) and the calculation of digital royalty rates in your example of a $4.00 title.
Regarding advances, the assertion that Harlequin’s advances to its authors have decreased is incorrect. Not only has the amount not decreased, it has, other than in a handful of cases where the advance was no longer fiscally viable, steadily increased. Unlike self-publishing, where authors receive no advance and no assurance of sales, we are proud to continue to provide an advance against royalties to authors who choose to publish with Harlequin in combined print and digital formats.
This brings me to the calculation of the 6-cent royalty received on the hypothetical sale of a $4.00 title. Under our current contracts, royalties for sales of digital editions are calculated using a net receipts model, which would result in higher royalty earnings than indicated in your blog.
Under the net receipts model, Harlequin offers series authors 20% of net receipts for digital sales. For a $4.00 book, the math works like this: $4.00 – $2.00 (50% discount offered to e-tailer) = $2.00 publisher net receipts. 20% of $2.00 = $0.40. So, the author makes 40 cents on the sale of the title. Authors with older contracts have different terms for digital sales but all have had (and continue to have) the opportunity to amend their contracts to the net receipts model for digital sales.
Last, I’d like to address the statement that “Authors are hemorrhaging out of Harlequin.” Over the past two years we have re-signed most of our series authors. Additionally, we have increased the number of multi-book contracts negotiated with many of our authors as a sign of our mutual commitment.
Harlequin takes great pride in having launched the careers of myriad talented writers who have resonated with readers, and we hope to continue to do so. We continually search for new writers as we expand existing programs and launch new series. We are thrilled to support our existing authors and give talented new voices the opportunity to forge careers as authors and help them connect with readers.
I hope this letter explains Harlequin’s advances and digital royalty rates, and trust you will rectify the incorrect information.
Sincerely,
Melanie Dulos,
Senior Manager, Publisher Relations & Corporate PR Harlequin
My response:
The figures I quoted weren’t mine. I don’t know enough about the lines to accurately report them, so I relied on the figures given by Ann Voss Peterson in the article I referenced in my original column. I have no way of knowing which set of figures is correct. So it only seems fair to quote both.
As always with Harlequin, authors do leave on a regular basis, but it seems more serious than before. Maybe it’s just me, I don’t know, but conversations with many Harlequin category authors on both sides of the Atlantic reveal a level of unrest I’ve never known before, and it mainly stems from the money, although cover art, editing and the speed authors are expected to work at also featured. However, I don’t have permission to reveal either names or details of the conversations, so I can’t say much more.
The multi-author series seem to be an industry phenomenon, but in Harlequin, some of these series, like the Correttis and Silk and Scandal, are generated within the company, and so the authors don’t own the complete rights to the stories. They are tied to Harlequin. I met this phenomenon before at a different publisher, so that when I left that publisher, I couldn’t take the multi-author series books I’d contributed with me, although the worlds and stories I’d created entirely on my own belong to me.
I am a big supporter of Harlequin, and I read a ton of books from them. I’m anxious for the house to continue and prosper, for me as a reader, but as a writer, I’m concerned that writers get a fair deal and good treatment, wherever they go.
I do appreciate Ms. Dulos’s frank and full reply and have to thank her sincerely for it.
Hi, Lynne.
The numbers I posted on Joe Konrath’s blog are accurate. However Harlequin is correct in saying the numbers you used are not accurate for their CURRENT CONTRACTS.
Ms. Dulos is very specific about this in her letter. “Under our current contracts, royalties for sales of digital editions are calculated using a net receipts model, which would result in higher royalty earnings than indicated in your blog.”
I clearly state in my post in Joe’s blog that the book I was talking about was first published in 2002. I have ten contracts with those terms (50% of net, where net is undefined). I also have 15 contracts which pay 6% royalties on the cover price for ebooks. I have no contracts which carry the current ebook royalty, because as you noted in your original post, I no longer write for Harlequin.
Harlequin is also correct that I had a chance to sign an amendment to the contract. There are three reasons I have not done so.
First, there is a class action lawsuit against Harlequin over the way they calculated ebook royalties (the method I was pointing out in my blog post). When I wrote this post on May 8th of 2012, the lawsuit had not been filed yet, so the post does not mention it. But I will not sign anything with Harlequin until this lawsuit is settled. You can find more information about it here: http://www.harlequinlawsuit.com/
Second, the amendment does not define net. I will not change the fifteen contracts I have that are based on cover price to new terms that leave net undefined. See the lawsuit website above or my post on Joe’s blog for an explanation of how net was figured in those older contracts, and you will understand my insistence that net be defined in any amendment.
Third, the amendment contains other changes to the contracts that I do not find are in my best interest, and Harlequin will not allow me to accept only part of the amendment. They also will not allow me to amend some contracts and not all.
Another thing I would like to point out is that the indie numbers I used in the post were based on a 2.99 book, which at that time was the price point for my thriller Pushed Too Far (it is now priced at 3.99). In your original post, you used an example of a 99 cent price point as your comparison. So my indie earnings on everything more than a short story are considerably higher than what you listed in the post.
The bottom line is that I earn 70% ($2.70) on a four dollar ebook that I publish myself. That is significantly higher than 50% of an undefined net (which works out to $.06 under my older contracts), 6% of cover (or $.24 under my newer contracts), OR 20% of an undefined net ($.40 that Harlequin has stated above).
Looking at these numbers, it should be clear why my May 2012 release, Pushed Too Far, has earned me more than twice as much in one year as my highest earning Harlequin made in 13 years.
Thank you so much for coming and responding, Ann. Do they intend for it to be this complicated?
Seems so sometimes, Lynne. 🙂 And when you have many different contracts over many years, it can get confusing.
I agree. Harlequin doesn’t seem to have the stable of major writers that they used to have. When Nora Roberts wrote for them, she was an auto-buy. Several years ago, they had Nora Roberts, Linda Howard, Heather Graham and Jessica Bird (JR Ward) writing for Silhouette (Harlequin) Special Editions. These authors were also putting out full-length fiction novels at the same time. There doesn’t seem to be any big names anymore.