After the Science Fiction Writers of America (SFWA) came out swinging on Wednesday, with its president saying that it would not allow authors publishing with Random House's e-only science fiction imprint Hydra to use that achievement as a credential for membership, the publisher has responded.
PW's Genreville blog ran a post about the SFWA's decision, but Random House said the organization never gave it the opportunity to address the issue at hand, namely royalty rates and overall contract terms. (The SFWA said the main reason for its decision is that Hydra "fails to pay authors an advance against royalties, as SFWA requires, and has contract terms that are onerous and unconscionable.")
In a letter to the SFWA, Random House's digital publishing director Allison Dobson said that while it respects the organization's stance "we strongly disagree with it, and wish you had contacted us before you published your posts." The letter went on to say that Hydra "offers a different--but potentially lucrative--publishing model for authors: a profit share," and that "as with every business partnership, there are specific costs associated with bringing a book successfully to market, and we state them very straightforwardly and transparently in our author agreements."
The full letter is posted below:
Dear John, Victoria, Jaym and SFWA Members,
We read with interest your posts today about the new Random House digital imprints and our business model. While we respect your position, you’ll not be surprised to learn that we strongly disagree with it, and wish you had contacted us before you published your posts. We would appreciate you giving us an opportunity to share why we believe Hydra is an excellent publishing opportunity for the science fiction community by posting ours below to them.
Hydra offers a different-- but potentially lucrative--publishing model for authors: a profit share. In the more traditional advance- plus-royalty model, the publisher takes all the financial risk up front, and recoups the advance before the author earns any cash royalties. With a profit-share model, there is no advance. Instead, the author and publisher share equally in the profits from each and every sale. In effect, we partner with the author for each book.
As with every business partnership, there are specific costs associated with bringing a book successfully to market, and we state them very straightforwardly and transparently in our author agreements. These costs could be much higher--and certainly be more stressful and labor-intensive to undertake--for an author with a self-publishing model. Profits are generated once those costs are subtracted from the sales revenue. Hydra and the author split those profits equally from the very first sale.
When we acquire a title in the Hydra program, it is an all-encompassing collaboration. Our authors provide the storytelling, and we at Hydra support their creativity with best-in-class services throughout the publishing process: from dedicated editorial, cover design, copy editing and production, to publicity, digital marketing and social media tools, trade sales, academic and library sales, piracy protection, negotiating and selling of subsidiary rights, as well as access to Random House coop and merchandising programs. Together, we deliver the best science fiction, fantasy and horror books to the widest possible readership, thus giving authors maximum earning potential.
As a last point to the SFWA leadership, my colleagues and I would welcome the opportunity to meet with you at your earliest convenience to discuss the advantages of the Hydra business model, describe the program overall, and respond to any of your expressed concerns. Please let me know a good time for us to set up this meeting.
Many thanks and all the best,
Allison R. Dobson
V.P., Digital Publishing Director
Random House Publishing Group