Point of View
POINT OF VIEW
A right royalty débâcle: Why Hachette’s Bookouture buyout is an admission of fault...
WORDS Agent Orange
with howls of protest, the entire business woke up again and simultaneously decided that actually 25% was the number they were aſter? It remains an even bigger mystery. (And one hates to sound Lady Bracknellish…)
A
MONG THE FLURRY of acquisitions before this year’s London Book Fair, the most significant, surely, has to be Hachete UK’s purchase of
digital publishing start-up Bookouture. One might well speculate about what it says of the success of Hachete’s digital strategy to date, a mere decade into the e-book revolution. Just as one might speculate about the impact, and likely effect, of parachuting an entrepreneur into a quintessen- tially corporate role. What we should all definitely not be speculating about is whether the acquisition is an indication that corporate publishers are prepared to acknowledge that they have got it wholly wrong about e-book royalt rates—because, well, how could that be?
Bookouture’s success quite clearly proves that it is possible to build a hugely successful e-book publisher by offering authors a fair royalt rate—one that is prety much double what traditional publish- ers offer. One of our recent ambassadors to Paris, when asked if he was cynical about the motives of the French, replied that he was always cynical about the motives of the French. That, I am afraid, is rather how I feel about publishers over this issue. Royalt rates in general are a scandal. How is it that the entire industry woke up one morning and simultaneously decided that 15% was a decent e-book royalt rate? It remains a mystery. How is it that aſter that woefully derisory figure was met
Footnote: the buyout background
Last week Hachette UK announced its acquisition of indie e-book publisher Book- outure, which was founded in 2012 by Oli- ver Rhodes. The terms of the deal were not disclosed. Rhodes will join Hachette UK in the new role of digital publisher, while con- tinuing to run Bookouture. He will also join the Hachette board.
Where they magicked up the notion that escalators (the mechanism whereby authors get a greater share of the revenue as a book sells more copies) just didn’t apply to e-books—even to backlist titles that had long since gone into profit—is a further mystery. As is the creeping infiltration of the super-high discount clause, which positively encourages publishers to give retailers absurdly generous terms and which makes a mockery of prety much every royalt clause in publishers’ contracts. I got a reasonable kicking (and a reasonably ignorant one at that) a while back aſter writing in a column for The Bookseller that a generation of agents had done a bad job at protecting author incomes. Well, all I can say is that in the intervening time it hasn’t got any beter. It’s got worse. And unless, miraculously, the acquisition of Bookouture is a sign that publishers really are prepared to acknowledge that their e-book royalt rates are iniquitous, it’s going to continue to get worse. One very much fears that instead of Bookouture bringing to its corporate parent the fearless spirit of the start-up, it will be gradually stifled by the dead hand of a corporate, risk-averse, job-protect- ing culture. Or, to put it another way, Bookouture’s culture will be valued only where it chimes with corporate culture, and stances such as a 45% royalt rate will quickly be seen not as an integral part of the culture that brought it success, but as the sort of naïve thing that young companies do. I cannot tell you how much I hope I am wrong. ×
Agent Orange is a UK-based literary agent who writes pseudonymously for The Bookseller. You can contact Agent Orange with comments or questions at
agorange01@gmail.com
Hachette UK chief executive Tim Hely
Hutchinson said Bookouture “probably knows more about selling e-books than any other publisher in the world”, adding that the companies’ pooling of expertise would result in mutual growth. Since launch, Bookouture has sold nine million e-books, most at low prices. For example, Robert Bryndza’s The Girl in the Ice, which has sold more than a mil-
lion copies, retails on Amazon for 99p. This strategy contrasts with that of Hachette, which operates the full agency agreement model for e-books, with resultant higher prices. Hachette offers authors a 25% roy- alty rate for e-books; Bookouture offers 45%. Hely Hutchinson said the acquisition did not mean Hachette would move away from agency pricing, and said Bookouture’s model would be “ringfenced” at Hachette.
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