Friday, August 27, 2010

Wylie and RH Kiss and Make Up

Last month, Andrew Wylie shook the publishing industry when he announced the launch of his new publishing company, Odyssey Editions.

Through an exclusive two-year deal with Amazon, Wylie's company planned to release e-book versions of twenty books from the backlists of authors his agency represents, including Martin Amis, John Updike, and Salman Rushdie.

Random House, the world's largest trade publisher, claimed thirteen of those twenty books belonged to them and responded to Wylie's announcement by saying that, since Wylie was now acting as a "direct competitor," RH would no longer enter into any new English-language deals with Wylie's clients.

Go here and here to read my earlier posts.

This Tuesday, a month after the contretemps began, Wylie and Random House issued a joint statement that said:
"We are pleased to announce that The Wylie Agency and Random House have resolved our differences over the disputed Random House titles which have been included in the Odyssey Editions e-book publishing program. These titles are being removed from that program and taken off-sale. We have agreed that Random House shall be the exclusive e-book publisher of these titles for those territories in which Random House U.S. controls their rights ... Random House is resuming normal business relations with the Wylie Agency ... and we both are glad to be able to put this matter behind us."

Although Random House refused to reveal the royalty rate Wylie had agreed to accept, Publishers Lunch reported here:
... Random House has been negotiating agreements for months with most of the major literary agencies on moving forward with ebook publication of successful backlist titles originally acquired before the era of electronic rights language, for which the rights and/or royalties are "in dispute" between the publisher and the rightsholder.

The basic terms ... provide for a sliding scale of royalties that tops out at 40 percent of net. These agreements are strictly limited to titles that are "in dispute" and do not indicate any willingness to move beyond already granted or offered rates on titles where there is no dispute.
On Wednesday, the Wall Street Journal reported here:
Amazon on Tuesday began removing [the] 13 e-books covered by the Wylie pact. The titles ... will return to Amazon under Random House's control ... The Amazon deal also included seven titles from other publishing houses. David Shanks, chief executive of Pearson PLC's Penguin Group (USA), which originally published two of those titles ... said the publisher is in negotiations with Mr. Wylie, but declined to comment further.
Publishers Weekly said here:
Another insider, when asked if Odyssey Editions was, more than anything, an attempt by Wylie to raise the digital royalty rate on these backlist titles--and, moreover, to simply get them published--scoffed at that notion. "This was all about starting Odyssey Editions and taking advantage of [the marketplace]," he said. "[Wylie] never expected a company like Random House to take the position it would no longer do business with him."
That last line intrigued me. Putting arrogance aside, how could Wylie not expect Random House to go nuclear on him?

Then I remembered--Wylie is not the first literary agent to set up a book publishing company. A decade ago, a very smart man named Richard Curtis did the same thing ... although not with Wylie's in-your-face attitude.

Curtis, former president of the Association of Authors' Representatives (AAR), began E-Reads in 1999. On Wednesday, he had this to say on the E-Reads' blog here:
... Random House has shifted its stance on e-book royalties and opened the door to an industry-wide raise in pay for authors as predicted here ...

Many agents have “favored-nations” arrangements with publishers entitling authors to request a new royalty rate if the rest of the book industry adopts a higher one. It is now anticipated that agents will flood Random with requests for amendments replacing recently signed ones agreeing to a 25% royalty. It will be well nigh astounding if other publishers don’t fall into lockstep with Random’s royalty or something close to it.

The big question now is, will it stop at 40%? Many observers feel it won’t ... (Full disclosure: E-Reads pays 50% net royalty and has done so from our founding ten years ago.)
Stay tuned ...

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