Authors question deep discounts as SoA calls for greater contract transparency

The Society of Authors (SoA) has called on publishers to give authors “the right to say no” to high-discounting practices as part of its campaign for fairer, more transparent contracts. SoA chief executive Nicola Solomon has told The Bookseller it is “rare” for authors to be asked for their input around discounting strategies, and that standard author contracts do not include a veto to block high-discount deals.

“Special sales” deals are often struck with non-traditional outlets such as The Book People and The Works, which retail titles at high discounts and offer considerably lower financial returns for authors per book than sales through more traditional channels. The issue was brought to light last week when author James Mayhew published a blog for the SoA questioning whether writers were getting a fair deal.

Mayhew had been offered a promotion by his publisher (Hachette Children’s) to place 10,000 sets of 10 books “from a successful series” in a “well-known discount catalogue”. The books (r.r.p. £6.99) would be sold to the retailer at a discount and would be sold for £1 each; Mayhew stood to pocket 3p per title (£3,000 in total).

“Is this really what we sign up for when we make an agreement with a publisher?” he asked. Mayhew’s agent alerted him to a clause in his contract that gave him the right to refuse to participate in the promotion, “something I was, I admit, hitherto unaware of ”, he wrote. “I took advantage... I said: ‘No’.”

Close attention

The SoA has urged authors to look closely at high-discount clauses in their contracts, and to ask when and how they could be exercised. “High-discount clauses can skew the whole contract, so the amount the author gets is not what they think that they were bargaining for at the beginning,” Solomon said. “If you have a headline rate of, say, 10% of r.r.p., you expect most of your books will be sold at that price [and] that they won’t be sold at some sneaky little sub-clause [price] which, in some cases, can be where the majority of the sales are made. We think there should be transparency.” She added: “Everybody should have the option to be asked about these deals and have the option to say ‘no’, because it isn’t clear on paper what that’s going to mean for you [as a writer].”

Solomon, whose Creator campaign for the SoA has been pushing for clearer, more equitable agreements, said it was “very common” for authors to get locked in to “take it or leave it” contracts because they are not in a strong bargaining position.

The European Commission’s stance on the issue has encouraged the SoA in recent months. As part of its Digital Single Market strategy, in September the EC proposed a clause giving authors the right to full, detailed statements of the uses of and revenues from their work, and the opportunity to renegotiate contracts where remuneration was “disproportionately low” compared to publishers’ revenues. A recent EC study recommended a legal requirement for written contracts, with an obligation to specify remuneration for individual modes of exploitation to “guarantee transparency”—or else the contract be rendered void.

From a publisher’s perspective, Hilary Murray-Hill, c.e.o. of Hachette Children’s Group, argued that promotions with non-traditional retailers helped to reach readers who “might not have the opportunity, inclination or budget to buy books”, adding: “We believe that we reach the widest possible readership by covering all retailers, acknowledging that different outlets require different approaches, sometimes including high-volume, high-discount deals. We would never suggest a deal to an author that we did not feel was in their interest and certainly we would not advocate anything that might devalue their work.”

Murray-Hill said Hachette would “respect” authors’ wish not be involved in a high-discount promotion, “but we approach high-discount deals with non-traditional outlets in the knowledge that they complement, rather than replace, existing routes to market.”

Juliet Mabey, publisher at Oneworld, said the indie didn’t cut as many high-discount deals as larger publishers, but “where we have done some—for example, The Book People sells a special hardback set of the shortlisted Man Booker Prize titles each year—we view them as reaching a different audience from our main edition and as additional sales we wouldn’t otherwise secure. We see it as extra income for us and the author, rather than focusing on the size of the discount itself.” But Mabey said it was “something we consider very seriously, and we make sure that our interests align closely with the authors”.

The Book People defended its model, with Sarah Walden, group buying and merchandising director, saying that the company introduces “millions of people” to a wide variety of authors and illustrators that they “wouldn’t have discovered either in libraries or bookshops”, adding: “This generates revenue for publishers and authors that wouldn’t exist without us.”

The retailer is also the “foundation” of print runs because it buys “firm sale”, and at least 90% of its kids’ range comprises backlist titles, Walden argued. She added: “The Book People is unique in as much as the reason for our foundation was the desire to introduce the love of reading to as many people as possible. By creating lots of new readers for authors and publishers, we believe that we are performing a valuable service to the industry—and the basis for our existence isn’t going to change.”

However, some authors questioned the long-term impact of deep discounts. Cathy Cassidy told The Bookseller: “We live in a society where the creative arts are shockingly undervalued. Books sold for pennies online, musicians and artists expected to work for free because it will be ‘good for exposure’—well sorry, that’s just not true.

“Our best and most creative new talent will be driven out of the industry. That’s shameful. If a book or a song or a painting sells for less than a coffee or a gossip magazine, what hope have we?”

She added: “My books sell well in France and when I’m there I see a healthy, thriving publishing industry where slash-and-burn discounts don’t happen. They have kept their Net Book Agreement, which protects the value of the book. Maybe it’s time we brought ours back?”

Author Holly Bourne said it was a “tricky” situation, “but as an author, it’s heartbreaking—also terrifying—to look at your royalty statement, see how many books you’ve sold and see how little money that translates into”, she said. “If we aren’t valuing stories, what is the fallout of that?”

Agents of change?

Agents took a balanced view, saying each deal should be assessed on its merits. Lorella Belli said her agency approached the matter on a “case-by-case basis”, looking at “whether it’s a backlist or a frontlist title, whether it’s a particular seasonal promotion, whether the publisher has a track record of successfully doing it in the past. Basically, assessing whether there are clear benefits to the author. The crucial thing is that the author has to have approval over any such deals. Most publishers don’t necessarily volunteer this kind of approval, but when agents ask, it’s unusual for them to say no.”

Lizzy Kremer, agent at David Higham Associates, added: “The argument is essentially one of discovery. Authors need to be seen and books need to be found. It is part of a brand marketing strategy; if you have people going into discount shops and finding authors for the first time, that’s going to be good for the growth of the brand. An argument against doing too many of those deals would be [that discounted books are] on the high street and you are potentially taking sales away from other high-street shops through which authors receive a whole royalty.”

She added: “There is also the underlying principle: should these deals really exist if the author’s recompense is going to be so low?”