Tuesday, 28 November 2017

A book sale shouldn't earn less than a library loan: The case for a PLR-benchmarked minimum royalty on special sales

The royalty payment per book on a special sales deal is often lower than the PLR payment on a single UK library loan.

Motivated by the Society of Authors Special Sales Campaign, I’ve just turned down a special sales deal for one of my picture books. A special sales deal is a deal where a very low price per copy is paid for a large quantity of books. If you see a catalogue offering "10 books for £11.99", the seller will probably have done a special sales deal with the publisher for a few thousand copies of each book.

One of the concerns highlighted by the Society of Authors campaign is that the growing number of special sales deals are cannibalising standard book sales while the royalty payment an author receives for a special sales book may be as little as a tenth of a standard royalty payment.  It recently occurred to me that special sales deals will be cannibalising authors' PLR income as well, since people don’t borrow books that they already own. Publishers do not receive PLR payments, so they suffer no loss of income if special sales result in a reduction of library loans.

The Society of Authors campaign asks publishers to give authors the right of approval on special sales deals. My agent already makes such approvals a contract requirement and last week she passed on a request from a publisher for a special sales deal on one of my picture books.

Under the terms of the deal I would receive a royalty of 3p per book sold. The terms were not unusual and I have received as little as 1.8p per book on previous special sales deals.

As is often the case with such deals, the author payment per book was lower than the PLR payment I currently receive on a single UK library loan of the same book. The 2017 UK PLR rate is 7.82p per loan*. PLR on picture books is split equally between the author and the illustrator, so I receive a payment of 3.91p per library loan.

The special sales deal would provide a one-off payment, while PLR provides me with regular annual payments. If the deal was going to cannibalise some of my future PLR income, the 3p per sale payment the publisher was offering seemed too small in comparison with the 3.91p I currently received for each library loan.

Following this reasoning, I told my agent that I would only accept the deal if the payment I received per book sale was at least equivalent to the payment I'd receive for a single UK library loan. In this instance, that would mean my royalty increasing by at least 1.5%. The publisher declined to increase the royalty, so I turned down the deal.

The publisher will no doubt offer the same 3p per book deal to another picture book author or illustrator, who may well accept. But what if they didn’t accept? What if all PLR-registered authors and illustrators started using the PLR per loan rate as a minimum benchmark based on the reasoning above? If enough PLR-registered authors and illustrators commit to a PLR-benchmarked minimum royalty, special sales royalty payments would have to go up. A PLR-benchmarked minimum royalty is still a tiny amount per sale compared with a standard royalty, but it would be a small step in the right direction and would help to halt the current race to the bottom in special sales.

So, if you are a PLR-registered author or illustrator and you don't think it's reasonable to receive less for a book sale than for a library loan, ask for a PLR-benchmarked minimum royalty on any future special sales deals.


*A UK PLR rate of 8.2p per loan is currently proposed for 2018.



How do I work out if the payment I'd receive for a special sales deal is above or below the PLR benchmark?


The 2017 UK PLR rate is 7.82p per loan. The PLR rates for subsequent years will be shown at the top of that year's PLR statement.

If the PLR on the book is shared with another contributor (e.g. an illustrator or translator) you will need to multiply the per loan rate by the appropriate percentage to reflect your share (the percentage you receive for each book is listed on your PLR statement). The resulting figure is your PLR benchmark for that book.


Special sales terms are usually supplied by publishers as three figures:

  • the percentage royalty to be paid to you
  • the unit price that the publisher receives
  • the quantity of books covered by the deal. 

Multiply the percentage royalty by the unit price (you don't need the quantity) to get the payment per book.

If the book is part of a set or pack, the publisher may give you the unit price of the whole set instead of an individual book. In which case you will need to divide this figure by the number of books in the set to get the unit price for an individual book.

Example 1

You receive 50% of a picture book's PLR (with the other 50% going to the illustrator).
A publisher offers a 5% royalty on special sales copies they are supplying at a unit price of 50p per copy. 
2017 PLR rate = 7.82p per loan 
PLR benchmark = 50% of 7.82p = 0.5 x 7.82p = 3.91p 
Special sales payment per book =  5% of 50p = 0.05 x 50p = 2.5p 
2.5p is less than 3.91p, so this deal is below the PLR benchmark. 


Example 2

You receive 100% of a novel's PLR.
A publisher offers a 6% royalty on special sales copies that are supplied as part of a 7 book set at a unit price of £9.50 per set. 
2017 PLR rate = 7.82p per loan 
PLR benchmark = 100% of 7.82p = 7.82p 
Special sales payment per book =  6% of (950p ÷ 7)   = 0.06 x 135.71p = 8.14p 
8.14p is more than 7.82p, so this deal is above the PLR benchmark. 

5 comments:

  1. This is very clearly reasoned. My only reservation is that I would say a book sale should earn MORE than a loan, and I wouldn't want to limit that possibility by making PLR rates the fixed benchmark. But *any* increase in Special Sales earning is a good thing, as is any highlighting of this odious practise. I live in hope that, if all authors refuse such deals, the whole industry will need to take a long hard look at the existing business model, and make some very overdue changes.

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    Replies
    1. I entirely agree that a book sale should earn more than a loan, but clawing our way back to parity would be a start. And as I said in the post, the publisher in this instance was not even willing to pay an equal amount.

      The PLR rate is going up next year, so that will help to lift the benchmark a little further.

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    2. Absolutely, and I should have said, and will say now, that I hugely appreciate your support for this tricky problem. It takes courage to stick your neck out and say "no" (as I have discovered, rather to my cost), so thank you. Parity would indeed be progress!

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    3. Thanks, James. I would probably have kept quiet ten years ago, but the older I get, the more I'm inclined to stick my neck out.

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  2. An excellent starting place, and also an absolute minimum price, given a loan is repeat business & a special sale one-off as James Mayhew notes. Also a call to the industry to look at the impact of minimal pay rates implied by advances/royalties. Will spread the word.

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