Straight from the mouth...

...of the Jolly Fish, in this case.  I posed some questions and some insecurities about Jolly Fish Press's tiered royalty system in my recent "Alternative Perspective" post.  They were kind enough to email me a very helpful response that I'll just include in its entirety here:

Dear Mr. Husberg: 

The tiered royalty platform is a common royalty practice among traditional publishers. Basically, this platform is divided into a few tiers of book sales, and in JFP's case, it is 1-5,000, 5,001-10,000, and 10,001 and above. Should the author's book sales fall within the first tier, he will be paid 8% based of the book's list price. The royalty percentage increases when book sales reach the second and third tiers accordingly. This form of royalty only applies to printed books. JFP pays a 35% royalty for all ebook sales.

The 50-50 royalty model is a digital only royalty platform on which both the publisher and author are required to put in equal share of production, distribution, and marketing efforts. Hence, the equal distribution of profits as well. Please note that Hydra is a digital only publishing platform created by Random House to reach out to more authors. While the royalty may be lucrative, sales and marketing efforts still need to come from the author. 

It is important to know that in most traditional publishing contracts, the author is given the time to write and market his book at the same time. It is no good writing a good piece, when the author fails to show up at events or does little to build his readership. These are some of the efforts the author has to do. One of the biggest problems many publishers face is the author refusing to do any marketing because he has "done his job of writing." In our industry, it does not matter if the author writes the greatest American novel, if he doesn't put in his effort in building his readership, no one will read his book, regardless of the amount of advertisements the publisher puts in. So, it is important to know that the business of book publishing is a business, unless the author writes for his own gratification, and not for the money.

Traditional publishers invest a whole lot of money in the production of one single book. The average production cost for one single title is about $250,000. Now, that's an investment. Traditional publishers work hard behind the scenes to bring the raw manuscript to a commercial and professional level worthy of shelf space in a bookstore. This includes the long and tedious editorial process (for example, Paolini's Eragon spent one year in the editorial process before even going to layout), book design, book marketing, book and author publicity, distribution of ARCs for reviewers, scheduling events for the author, etc. These efforts require the skills and dedication of teams of professionals and pundits. This is also one reason why the quality of traditionally published works will always surpass that of self-published in many levels (for example, see Hocking's Trylle series before and after St. Martin's picked it up). The truth is, a traditional publisher does more than most authors realize.  

A lower royalty cost does not in any way push the costs to the author. The profit margin of an average book is so low that the publisher goes home with only a dollar (or less) for every book sold. In the end, the author is the one who always goes home with the bigger sliver of the pie.   

We hope our response answers your questions. 

Regards,

Jolly Fish Press

They did a pretty good job of answering my questions, and in a timely, courteous manner as well.

For me, the takeaway from this whole thing is that the publishing world is changing.  The proverbial cheese has been moved, and people are scrambling to find it again.  There's a lot of stuff going on from all angles (traditional publishing, small presses, self-publishing, etc.), and it is both a terrifying and an exciting time to be an author seeking publication.  Right now, there really isn't a straightforward "right" way to go about getting published*.  It's a cop-out and cliche, but this is really a "whatever works for you" moment.  What are your strengths as a writer?  What are your strengths as a person, for that matter?  Depending on what your answers are to those questions will determine largely what kind of publishing route is best.  At least, that's how things are looking for me, right now.

But one thing is certain:  it pays to keep tabs on the business.




*  That doesn't mean there aren't wrong ways, though.

An Alternative Perspective (or Two) on the Profit-Sharing Model

Hey folks, about those alternative perspectives I mentioned...

So I took the liberty of emailing a few small presses that use the profit-sharing and royalty-only models that have been all the rage recently, to see what they have to say on the subject.  Jolly Fish Press was very courteous and quick in their response, so here's what they have to say about things.

On why small presses use profit-sharing:

The profit-sharing model works for most small presses because it does not incur debt.  as such, the author is more motivated to promote the sale of his book.  From the business side of things, it creates a partnership of two parties--the publisher who places the initial investment in the publication and distribution of the book, and the author who writes the book and is responsible for its sales and marketing.  The selling of his book now becomes the author's business as well.

The no-debt idea absolutely makes sense, from a business perspective.  As I've mentioned before, it's all about ROI.  Motivating the author to be more involved in marketing can be a good thing as well--in my opinion, there's no reason an author shouldn't be doing all he or she can to connect with readers.  (There's also an argument--one that I happen to generally agree with--to be had regarding what an author should or shouldn't have to spend his/her time doing, but I'll save that for another day.)

That said, one of my big worries is the investment of the publisher in the writer.  Because, let's be honest, ROI isn't irrelevant for the writer, either.  And by writing an entire novel, the writer has already invested a lot.  That's where an advance is really nice; it shows the writer that the publisher has some investment in the work the writer has already done.

In the email I received, JFP went on to describe the nature of advances. Mainly:  authors don't earn royalties until advances are paid out, and authors that don't sell more than their advance often don't get contracted with the same publisher again (and, by association, often get "blacklisted" and have a very difficult time getting contracted anywhere after such a debacle).  (That's all paraphrasing and summary of what was stated in the email.)

These concepts are pretty accurate, and have long constituted some of the inherent risks involved in publishing.  Here's the rub:  what risks is the author more inclined to take:  having to split his/her time between writing and marketing and dealing with a publisher who has marginal investment in his'her work, or not paying out their advance and potentially being "blacklisted" from major publishing houses?  I think the ultimate decision should really depend on the author's personality, goals, and strengths.

One more interesting thing JFP mentioned:

JFP does not pay advances for the same reason explained above [referring to the inherent risks they mentioned, and that I previously summarized, in the advance model].  Our current royalty scheme is structured on a tiered platform; the royalty increases as book sales increase.  While each book deal comes with its own unique terms and conditions, our genreal royalty payout is based on the cost price of the book, starting from 8%.  As a traditional publisher, JFP absorbs the publication costs of the book.

Hmmm.  Now, that is interesting, particularly the fact that they start out at 8% royalty (as opposed to the 50% many other small presses toute).  I'm not sure if this is strictly for print books, or for all books in general.  From what I understand, JFP presents itself as, essentially, a "traditional publisher without the advance" (my quotations, not theirs).  So they're offering a traditional royalty rate where the royalties go straight to the author from book one, but there is no advance involved.  The tiered royalty scheme sounds interesting, but again sounds like a lack of investment on the publisher's part.  Anyway, I've emailed them to ask for clarification on this system, and I'll of course post my findings here.

For me, personally, I'm still leaning towards the traditional publishing route, advances and all.  That said, I'm still open to whatever comes my way, from small presses or otherwise.

For what it's worth, the people at JFP seem like a smart and courteous bunch.  Far more importantly, they don't seem like they're trying to screw the author over.  The fact that they at least "absorb the publication costs" is certainly a step above what Hydra was reportedly doing by pushing those costs onto the author.  So, good for JFP.  I commend them to you, if you're looking for a royalty-only publisher.

Also, it appears John Scalzi beat me to the punch yet again, and posted this alternative perspective by Evan Gregory, from the Ethan Ellenberg agency, on the royalty-only model.  Check that out for an additional additional perspective.