Random House EContrax

Screenshot: Wired

When Random House unveiled three new e-book imprints last week — and revamped an extant one — to give the publishing giant a beachhead in the growing world of genre digital publishing, things didn’t end up going so well. The problem was the contracts offered by the Loveswept, Hydra, Flirt and Alibi imprints, which put a new financial burden on writers while simultaneously removing the payment of advances and extending publishing rights through the length of copyright.
In response to leaked versions of the contract, the Science Fiction & Fantasy Writers of America announced that the imprints “can not be use[d] as credentials for SFWA membership,” nor would be considered an approved market due to the non-payment of writers, with SFWA president and author John Scalzi calling the contract “genuinely shameful” and “A HORRIBLE AWFUL TERRIBLE APPALLING CONTRACT WHICH IS BAD AND NO WRITER SHOULD SIGN IT EVER.”
In the face of such upset, Random House announced on Tuesday that it would change its contracts, offering prospective authors a choice between a 50/50 profit share with no upfront money and a more traditional advance-plus-royalty model where authors receive some money prior to release, as well as 25 percent of whatever profits the title generates upon publication.
Whichever option is chosen, the Random House imprints will cover production and promotional costs  – although promotional costs above $10,000 will be shared between publisher and author in the profit-share model — and will receive publication rights throughout the world in all languages for the duration of copyright unless the digital release falls beneath a particular sales level — 300 copies in 12 months — in which case the author can request rights reversion.
“The issue for me as a writer is not why they changed it, but that they are changing the contracts,” Scalzi told Wired. “Is it that they were clueless when they wrote the initial contracts and then, when someone pointed it out, they fixed it, or whether they were embarrassed in the media? The short answer is, I don’t care. Are they changing the contracts to make them more equitable to authors? If so, then I am very happy that they’re doing that and I will continue to point out where things could be improved in future.”
Scalzi said it seemed clear that Random House wanted to reduce their own costs up front and pass a number of other costs on to the author. ”As long as you always take humans out of the equation, that sounds pretty good. The problem is, writers are actually human beings… There is always a cost/benefit analysis. But if your cost/benefit analysis begins with shoveling off the costs that we traditionally shoulder ourselves onto another entity — that entity being the author — then obviously authors and writers organizations and everyone else are going to stand up and say, ‘Wait a minute, please.’”
The changes, Scalzi feels, are a step in the right direction for Random House’s e-book imprints. While he couldn’t answer whether or not they were enough for the SFWA to reverse its decision about use as credentials for membership or as approved markets — that decision not being his alone — he said their response demonstrated the value of the public dissatisfaction expressed about the initial contracts. “The goal here is not to be able to lift the bloodied head of Random House and boast we have taken a hit,” he said. “The goal here is to make sure that writers are being compensated fairly for work they have done and will do.”
Update 3/14/13 2 pm EST: The article was changed to clarify the promotional cost-sharing in the new profit-share model.