In which Courtney solves RWA’s problems…


…and yet oddly, nobody feels like thanking her. ;) (Edited to add: this is supposed to signal that I’m being tongue-in-cheek, and my goal is not to say “This is the answer!” but to start a dialogue; but obviously some things don’t come across in clear text.)

RWA has announced that it will be holding a special board meeting to decide how to deal with Harlequin’s announcement that it will include a vanity press going forward. I’ve been thinking about this, up and down, right and left, on and off ever since the announcement was made, and I’ve come to a handful of conclusions, which I now share with you (and which I will eventually pass on to RWA’s Board just as soon as everybody’s done shooting holes in it).

Since this is long and boring, it is after the jump, so that those of you who don’t care about RWA and vanity publishing can breathe a sigh of relief and go on your merry ways.

Before I get into this, I have to tell you a few of my working assumptions walking into this.

1. RWA’s interests as an organization.

a. RWA has an interest in providing education to its authors. A publisher on RWA’s “Eligible Publisher” list belongs there if it provides a viable avenue for an author to have a serious career writing romance.

b. RWA has an interest in making sure that publishers who are compensated for coming to RWA conferences are there to help make money for authors (furthering RWA’s purposes), rather than off them (frustrating them).

c. On the flip side of that coin, RWA has an interest in facilitating interactions between all publishers that provide a reasonably-sized stepping stone in a career, and the career-minded romance writers who make up the membership of RWA.

Note what’s left off, and this may be controversial (at least until I explain what I mean): RWA, I do not think, has a legitimate interest in “punishing” Harlequin for its choice to run a vanity press (however outraged members of RWA might be). Nor does it have a legitimate interest in pressuring Harlequin to divest itself of the business. My point is not that no member of RWA has an interest in how Harlequin runs its business. We do; individually, if we want to “punish” Harlequin or pressure it to divest itself of its vanity press wing, we are free to do that.

What we are not free to do, as a group of authors, is to enter into a combination to tell Harlequin they may not make contracts at all with competitors. And the reason why we cannot do that is that it would be illegal under antitrust law. (Some people will point out that the DellArte folks aren’t really our “competitors”–but they do produce substitute goods, however imperfect that substitute might be–and they do it at substantially lower cost to Harlequin).

RWA should hesitate to take collective action that looks like our goal is designed to raise the price of our services, because we could easily run afoul of antitrust law. Protecting other authors? Fine. Making sure that conference comps are used wisely? Also fine. Collectively pressuring an organization to raise the price of the books that we produce? That’s a per se violation of antitrust law, and it’s punishable by criminal penalities, along side civil treble damages.

When I say I don’t think RWA has a legitimate interest in those things, I am not trying to say that the interest is not important to individual writers; I am trying to say that the interest must not be carried out through a collective organization of writers without risking massive legal penalties.

So, here’s the question I heard from a million (well, four) different people over the last handful of weeks: “Why are we punishing all the Harlequin lines for what is a breach by one part of Harlequin Enterprises?”

There’s an easy answer to that question: None of the Harlequin lines have applied for eligibility as a publisher. “Harlequin Enterprises” applied as a whole; “Harlequin Presents” did not. Therefore, Harlequin Enterprises as a whole is banned by any vanity/subsidy activity in any of its branches. I also note that even though Carina Press does not use the name “Harlequin” it still identifies itself as a division of Harlequin Enterprises, and so as a subset of Harlequin Enterprises, Carina’s existence should exclude the whole of Harlequin Enterprises, under the current bylaws and Harlequin’s current application.

Note that I place no moral consequences to this statement; this is just a neutral application of the bylaws, not yet a statement of what I think should happen.

Second Question: Could, say, Harlequin Presents be allowed to apply for publisher eligibility as an entity in its own right?

To answer this, we have to ask what constitutes a “publisher” under the RWA bylaws and its policies and procedures. And, interestingly enough, the bylaws are silent on the question. But, as a matter of course, it appears that RWA appears to give considerable deference to the entity applying for publisher status. Thus, for instance, both “HarperCollins” and “Avon Books” appear on RWA’s Eligible Publisher list, even though Avon is not, to the best of my knowledge, an actual separate corporate entity. Likewise, NAL and Berkley are both listed, even though they’re both under the mighty wings of Penguin. And so on.

RWA could try to define what constitutes a “publisher” in the bylaws, but that gets tricky. If they share editorial, do you consider them a separate publisher? What about cases where an editor may edit for several different imprints within a line (there are tons of those)? What about cases where editorial is separate, but marketing and art departments are merged? What happens if there is a reorganization? Does it really behoove RWA to enquire deeply into the business structure of publishers? What if a publisher outsources aspects of editorial elsewhere; do you ding them if they send copy-editing out to a freelance service that also freelances for Authonomy? Defining what constitutes a “publisher” sounds like a giant freaking mess. Currently, RWA appears to deal with that by letting publishers define who exactly they are when they apply for eligibility.

So here’s a simple solution: Carry on with the status quo and let the publisher define what constitutes a publisher. Under the bylaws, I see nothing that says that Harlequin Presents, Harlequin American, Harlequin Historicals, and so forth can’t apply as separate publishers in their own right.

Problem solved. Right?

Well…. no. Because while this alleviates the conflict with RWA’s first interest (it limits the “RWA Eligible” publisher list to include only those that could viably advance an author’s career, thus not giving RWA imprimatur to an imprint that doesn’t meet its criteria), it doesn’t do anything for the second interest, which is that it gives comped space at RWA’s conference to a publisher who has stated that it will include advertisements for DellArte press in rejections, and so anyone who pitches to an editor from, say Harlequin Presents at RWA Nationals may end up getting what is essentially an RWA-comped referral to vanity publishing. No good.

Quick fix: Amend the policies and procedures to say that no RWA Eligible publisher can refer rejections to a vanity or subsidy publisher (this is obvious); and amend the policies and procedures to say that a publisher must produce at least N books a year (where N is an amount that may be hypothetically set at 24).

This would allow publishers to manipulate what constitutes a “publisher,” to spin off parts of themselves. I don’t think this is a bad thing—publishing is changing, and I think it’s okay for traditional publishers to experiment. In fact, to the extent that I want to have a career in 20 years, I think it’s vital that traditional publishers experiment. RWA doesn’t have to grant recognition to all those experiments immediately, but at least it won’t be punishing publishers for the experimentation. Not all of the experiments will be good, but we shouldn’t be so hidebound that we disallow the whole for the part. (Let’s be clear: I dislike vanity publishing and am not a fan of DellArte; but I am a huge fan of Carina, and am pleased that Harlequin is trying to make digital publishing work for them. I also think both experiments disqualify the whole of Harlequin Enterprises, under the current bylaws. Right now I am stating what I see to be the Law of the Bylaws, not Courtney’s Moral View of the Universe, Seen through the Lens of Harlequin).

So, what would Courtney’s little plan mean, specifically?

First, it means that some divisions of Harlequin may actually be able to come to Nationals, so long as they certify that they won’t be sending rejections to slush.

Disclosure: people most likely to benefit includes me; since the single-title arms of Harlequin accept only agented solutions, it might be a simple matter for them to certify that they aren’t going to refer rejections to vanity publishing. But it might help other divisions, too—for instance, I don’t know if the London office will also refer to DellArte.

Second, it means that RWA can allow Harlequin to tailor its response to minimize the damage done to both Harlequin and Harlequin authors.

Third, while it doesn’t provide RWA with a tool to collectively pressure Harlequin into changing its business practices, it does provide Harlequin authors with a very specific request to bring to editors, thus making individual pressure more effective. My guess is that you might find that some lines will begin compliance before others; this allows Harlequin to come up with a piecemeal solution to the public outrage.

Fourth… no, first, wait and listen to the silence right now, because this is the part where what I’m thinking goes kaboom, this provides a way for solid e-publishers to become RWA Eligible, with only minor alterations to their practices.

What? You don’t see it? It becomes trivial at this point. Say you’re Samhain Publishing. You create two lines: Samhain Regular and Samhain Gold. Books accepted into the Samhain Gold category are guaranteed an advance on royalties of $1,000.

“But Courtney,” you say, “that is not a minor alteration. The e-publishing model doesn’t include an advance.”

Well, why not? Let’s face it—if an e-publisher isn’t publishing 24 sure-thing-you’ll earn more than $1,000 in royalty-books in a year, it doesn’t deserve the resources we’d devote to it at Conference. I have no problem restricting RWA conference resources (which members provide through conference fees and membership dues) to publishers that guarantee a certain level of income for writers.

One of the reasons I believe e-publishers should be included in RWA eligibility is that I really do believe that the best of them provide substantial career opportunities for their authors. (I mention Samhain as one of them because I think Samhain is one of the best e-publishers—they get most of my e-publishing dollars. Thanks, Samhain!). This change allows Samhain to continue to take risks on new stories, but to get credit for the guarantee they can make.

“But Courtney,” you say, “you’re still missing the point. Advances would require leveraging, and e-publishing is a lean, mean business that doesn’t leverage.” Ha! Nowhere in the bylaws does it say an advance needs to be paid on signing. Tons of print published authors have portions of their advance due on publication; some of them even have portions paid after publication.

So create something like Samhain Gold, which guarantees an advance of at least $1000, to be paid when earned, or one year after publication, whichever comes first. I’m guessing that this is going to make not one iota of difference in the way Samhain pays the authors that it promotes to Samhain Gold; Samhain then gets to send editors to conference (comped) (provided that they take pitches only for the Samhain Gold line), and we have a very simple test for allowing e-publishers: If you believe you can guarantee decent royalties for a good number of authors (although not for all of them), you’re in.

If you can’t provide that, work at building an audience and come back later.

All righty. Courtney has now solved all of RWA’s problems; now it’s time for her to go solve her own. You tell me how crazy I am.

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83 Responses to “In which Courtney solves RWA’s problems…”

  1. Kalen Hughes says:

    Talk to people who publish in hard-cover first followed by paperback, and you’ll find people who have portions of the advance held until first paperback publication.

    I’ll grant you that HB authors will see their advances split into groupings that recognize there will be MORE money down the line when trade or mm comes out, but that doesn’t equate—to me—with the scenario you’ve come up for ebook royalty payments being considered an “advance” when paid after publication.

    I do however agree wholeheartedly with the idea that RWA needs to come up with a better way of recognizing legitimate ePublishers and authors, and I would hate to see HQ get removed from the list of eligible publishers over Carina (which I too think is a legitimate experiment in publishing).

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  2. I’ll grant you it’s not the same payout schedule, but I think we’re quibbling over details that aren’t really relevant to the point at hand.

    My point stands: these days, people in the publishing industry readily admit that “advance” does not require prepayment. What I said holds true: Money that is called an “advance” in a publishing contract is not all paid in advance.

    One needs to extrapolate a bit from present practice, but I don’t think the extrapolation is hard. Publishing has already breached the “advance not paid in advance” line. What I’m talking about is just tweaking the percents and the exact on-payment scheduling. It’s a tweak, not a departure.

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  3. Magdalen says:

    I’m worried about more than just the referral to Dellarte as part of the rejection process. As I understood the original structure of Dellarte (and I haven’t read anywhere that this has changed), a writer interested in paying for the Dellarte service is offered an a la carte menu of services, including editorial services by . . . Harlequin editors. That means Harlequin editors are deciding who gets their editorial services for free — in the pursuit of being published by a Harlequin imprint — and who may pay for those same services off the Dellarte menu. As Tessa Dare and others have commented — those two conditions (the rejection letter referral and the for-pay provision of editorial services) may be contractually locked into the deal with Author Solutions.

    Until Harlequin makes Dellarte a separate division, with its own staff of editors, and severs the connection with the Harlequin editors, I don’t see how RWA can carve out exceptions for specific Harlequin imprints when those editors are serving two masters, and one’s a fee-based publisher.

    I’m not sure I see any Sherman Act violation in RWA’s action, and I’m not sure the DoJ would either. If I understand it, your argument is that by downgrading Harlequin Enterprises from eligible publisher status, RWA has interfered with HQN’s right to form a contract that provides competition (i.e., another forum for publication) in the marketplace.

    I have a couple problems with that logic. First, HQN has already entered into a contract with Author Solutions; RWA has no legal authority to get HQN to breach that contract. Even if interference with the contract was a Sherman Act violation, I’m not sure demoting HQN from eligible publisher status is sufficiently powerful to be deemed legal interference.

    Second, Harlequin and Dellarte aren’t in the same market. HQN’s other imprints are commercial publishing ventures: they pay writers for the right to publish that writer’s work. Dellarte makes money in a different way: writers pay Dellarte for the chance to get their work in book form. (Dellarte makes some money from sales of the subsequent book, which is what distinguishes it from a true self-publishing outfit.) How can you have a Sherman Act violation without a common market? (And RWA as a trade group isn’t in competition with HQN or Dellarte…)

    Finally, I don’t understand how RWA’s actions amount to an increase in the per-book price in either direction, i.e., more money for the author OR more money for HQN and thus constitute restraint of trade. Presumably, HQN entered into its joint venture with Author Solutions as a way to make more money, so maybe there’s an argument that *if* RWA was able to force HQN to break the contract with Author Solutions and *if* that resulted in a loss of prospective revenue and *if* that revenue was theoretically budgeted to keep book prices down . . .

    Sorry — I just don’t see it. (It could be I’m just being dim on this point.)

    I don’t do antitrust law, so I’m hardly an expert (and my tame IP law expert admitted it had been too long since he took antitrust law…), but what’s nice about the Sherman Act is that there is a semblance of logic to it: price fixing, monopolization, even restraint of trade — they all make intuitive sense as being bad for the consumer. If the consumer is the author looking to get published, then Dellarte is in competition with other for-fee services, not Harlequin imprints. (In fact, one could argue that the way Dellarte is set up, most of its potential customers will have already been kicked out of the market vis a vis HQN — it’s not like they get offered a contract with an HQN imprint and then also get referred to Dellarte.)

    (And here’s an odd thought: What’s the role of the agents who work with HQN? Some writers submit their manuscripts directly to HQN imprints, which is how they end up in the slush pile. But some writers get an agent, who then negotiates with the imprint directly. This can be true for a writer who’s not yet published. Where’s the restraint of trade when an agent is handling the negotiations? Surely any effect by RWA on the actual prices involved in commercial publishing are too attenuated when it’s only a trade organization. If agents conspired to fix prices — that would be a clear Sherman Act violation. But a trade group? Really? How would you prove an economic effect?)

    I completely agree that RWA has some heavy lifting to do in this area. And for all sorts of reasons, they may have to compromise in some manner to reinstate HQN. But as long as HQN editors are working both with HQN and Dellarte writers, and thus earning HQN profits through both commercial and fee-based publishing, I would hope RWA wouldn’t compound the “form over substance” problem by winking at HQN and saying that its commercial imprints are publishers even while those same editors are also working at Dellarte.

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  4. Magdalen wrote:
    a writer interested in paying for the Dellarte service is offered an a la carte menu of services, including editorial services by . . . Harlequin editors.

    I’m actually pretty sure this isn’t true. Harlequin used to offer a pay-for critique service that did utilize Harlequin editors, but my understanding of the DellArte deal is that all the services are provided by Author Solutions staff, NOT Harlequin’s. Which was actually one of the most offensive things about it. The promotional materials SEEMED to be claiming you’d be getting Harlequin’s expertise, when in reality, you were just getting ASI’s.

    On the issue of advances, I’ve heard of more and more paperback authors getting their advances chunked out on signing/manuscript/acceptance/publication. Just thought I’d mention it, appropos of nothing in particular.

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  5. Magdalen,

    First, it’s been made clear by Harlequin that no Harlequin editors were harmed in the making of DellArte process at all. Author Solutions provide the staffing, the production, everything. Harlequin isn’t providing anything more than the name (and not even that anymore) and the referral.

    Second, my point was not that RWA’s current action was a violation of antitrust law. My point was that if RWA goes too far towards trying to punish Harlequin in the future, it might actually end up engaging in actual price-fixing (not any wussy interference with contract): specifically, insisting upon price points and punishing publishers (or authors with publishers) that don’t comply.

    I don’t think RWA has crossed this line yet. I do think it could.

    There is a huge body of law on how antitrust interacts with trade associations. For an interesting birds-eye overview, check out this speech by the Assistant AG on how trade associations can violate the law: http://www.justice.gov/atr/public/speeches/0106.htm

    At the point when RWA’s behavior crosses over from the mere setting of standards for individual authors’ benefit, into trying to force Harlequin to adopt a business model that pays all its authors a minimum advance of $1000, you cross from rule-of-reason antitrust territory (translation: plaintiff loses) into per-se illegality (translation: plaintiff wins), at which point all questions about market effect go out the window. RWA has not crossed that line, but the reason I made the above list is that it could. RWA has to keep its eye on procompetitive benefits for members, not anticompetitive attempts to make sure authors get paid more.

    As for the question of markets: If vanity publishing were not an economic substitute (albeit an imperfect one) for traditional commercial publishing, there would be absolutely no story here, none at all.

    Of course they’re not perfect substitutes. But if the sugar manufacturers all get together to get grocery stores to not carry Xylitol, that’s an antitrust violation. They’re both sweeteners.

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  6. Bessie Smith says:

    This is a waste of time and nothing but a quick fix. Asking Harlequin to break up it’s lines is like asking Proctor and Gamble to individually sell all of its products. Too much money, too much time and a headache.

    Face it. Harlequin Enterprises is now part owner of a vanity press. And even if they decide not to refer rejected manuscripts to their self-publishing division, they are still backing a business concept RWA objects to and rightly so, since it preys on the dreams of writers and their bottomless wallets.

    What you suggest is equivocal to taking down a sign at an all male social club that reads “Ladies not Apply” off the cornerstone because its now unlawful. Yet, you still refuse to admit women. If a club refuses female members either publically or privately it’s still wrong isn’t it?

    And good luck with your $1,000 threshold for publishers. That’s RWA’s way of keeping ebook publishers/authors in line. I’m sure many ebook writers have gotten over that one, since our pay isn’t as bad some people think. I have. I made PAN in the first 8 days of sales 2x over. And no I’m not published with Samhain.

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  7. Bessie, I think you read a different proposal than the one I wrote. Also, I’m pretty sure the word “equivocal” is not the word you wanted.

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  8. Magdalen says:

    Courtney — Do you have a link for where HQN says they are no longer making their editors available for fee-based editorial services as a part of what Dellarte offers? I know that when it was Harlequin Horizons, that was on the a la carte menu. Which isn’t inherently a problem; the trend will be to contract for editorial (and other) services in the course of self-publishing. But while Author Solutions have their own staff, I recall that the HQN editors’ services were available for various levels of read-through and comment of a writer’s manuscript. If that’s changed, I’d love to see the citation, thanks.

    You and I will have to disagree about whether paying someone to print your book is a service in direct competition with commercial publishers who pay you for the right to print your books. I would argue they are significantly different services because, although both result in the author holding a bound book in her hands with her name on the cover, one involves a relatively large print run of that book, a distribution deal (we’re still talking about HQN here), and branding. The other results in a couple hundred copies of a book the author herself is expected to market and sell. In terms of your analogy, it would be like the Sugar Association, Inc. blocking the free provision of xylitol packets at a supermarket cafe: both the numbers involved and the business model are completely different.

    In a similar fashion, there are sufficient facts at issue in the question of RWA’s ability to restrain trade to make this a rule of reason case, not per se illegality. RWA is not a well-organized trade association whose members do what they are told! (You can take that statement however you like…) The likelihood that a first-time author would tell a publisher, “You need to pay me at least $1,000 or no deal,” when offered a long-sought-after contract is pretty slim. Without the likelihood of concerted action, anything RWA says is just advice.

    And if RWA can’t require its members to behave in a certain way, how does it have the power to require the contract between HQN and the author to be for a certain amount of money? Are we still talking in the context of who is and who is not an eligible publisher? Is that really sufficient leverage to negatively affect competition?

    Let me put that another way. For RWA to dictate the terms of a contract between a commercial publisher and a writer, RWA has to have some leverage on either or both parties to that contract. (Again, contrast the role of an agent; if there were a trade association of agents telling its members how much to require in a contract, that would better meet the market power requirement cited by William Tom as a necessary condition for antitrust violations. Agents act as gatekeepers that publishers contractually can’t get around.)

    RWA is the trade association for romance writers, but I’ve never gotten the impression that it can do much to its members than deny membership. Not being a member of RWA hasn’t hurt anyone. Similarly, it’s very hard to imagine that RWA has the power to do anything to HQN — the 1,000 pound gorilla in the marketplace! — that could be seen as restraint of trade. Not all “punishment” has the strength required to meet the statute or the case law.

    If your post really boils down to a hope that RWA consult counsel pretty carefully before it announces its next position on HQN and Dellarte, I’m all for that. There’s no reason for even the appearance of impropriety in this matter.

    But when I ask myself whose side I’d want to be on in a DoJ action against RWA (or its members) for antitrust violations resulting from an RWA “mandate” (or whatever you want to call it) that initial advances be $1,000 or more, I’d want to defend RWA. Way more fun arguments on that side.

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  9. Magdalen, I have the e-mail Harlequin sent out to its authors answering various concerns, which unfortunately I don’t think they made free to make publicly available. I think Malle Vallik said something equivalent on Dear Author at this comment: http://dearauthor.com/wordpress/2009/11/18/malle-vallik-harlequins-digital-director-answers-questions-on-harlequin-horizons/#comment-223047

    Author Solutions is providing the self-publishing services; Harlequin provides branding and links. I think the e-mail says it a little plainer in other spots.

    In terms of your analogy, it would be like the Sugar Association, Inc. blocking the free provision of xylitol packets at a supermarket cafe.

    But if a sugar association did this, by e.g. threatening not to sell sugar to all supermarkets who provided free xylitol packets, it would be per se illegal under antitrust law. I mean, that is classic cartel-maintaining behavior–using your market power in one field to prevent competition from gaining a foothold in some area relating to an imperfect substitute. How is this not plainly anticompetitive?

    Whether this turns into rule of reason/quick look/per se illegality is largely going to depend on what action RWA takes in the future. It’s very difficult to have a hypothetical conversation about the legality of an action that hasn’t happened, and which we haven’t even picked, to hypothetically use in the future.

    My only point is, RWA could do things that cross the line into per se illegality, and so what I am trying to say is more along the lines of “be careful and talk to counsel who understands antitrust implications, and make sure you’re not trying to punish Harlequin, but protect authors; otherwise the road is perilous and could lead you unto treble damages; and lo, they are big.”

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  10. Magdalen says:

    Jackie & Courtney — Sorry, I missed your post, Jackie, and I apologize. If HQN has withdrawn the offer of fee-based editorial services by their staff editors, then I am absolutely wrong about that. And there’s no doubt that’s a legally better position for HQN to be in.

    But I’m inclined to agree with you, Jackie, that it diminishes somewhat the “specialness” of the Dellarte service. I could make an argument for an aspiring author to pay for the services of an HQN editor to improve her writing, plotting, characterization, etc., etc. But if the HQN’s editorial expertise (specific to romance novels) is no longer on the menu, what differentiates Dellarte’s vanity press service from any one of Author Solutions’ other vanity presses?

    Oh, that reminds me — Hasn’t Author Solutions bought up most of the “vanity press” companies? I suppose that’s not monopolization because of the other self-publishing options, including print-on-demand, which still offer sufficient competition.

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  11. But if the HQN’s editorial expertise (specific to romance novels) is no longer on the menu, what differentiates Dellarte’s vanity press service from any one of Author Solutions’ other vanity presses?

    Absolutely nothing.

    I don’t think it was ever on the table; the opportunity cost would have been way too high for Harlequin. The amount they would have made just wasn’t high enough to justify taking that editor off that book and having her edit books that would go on to sell copies all over the globe for Harlequin instead.

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  12. Kris Kennedy says:

    Magdalen said: “You and I will have to disagree about whether paying someone to print your book is a service in direct competition with commercial publishers who pay you for the right to print your books. [SNIP] In terms of your analogy, it would be like the Sugar Association, Inc. blocking the free provision of xylitol packets at a supermarket cafe: both the numbers involved and the business model are completely different.”

    Hi Magdalen. I’m no lawyer, but I had some thoughts. And thanks for saying things that make me keep thinking.

    The analogy seems inadequate. RWA isn’t trying to keep xylitol tablets off the shelves of the supermarket: they’re trying to keep them off their OWN shelves. I think a closer analogy would be a particular supermarket saying they don’t want the xylitol on their shelves, whether it be for free or at cost.

    RWA has their own ‘product,’ their own storefront, which is their mission. They don’t have the obligation to do anything that would undermine it *in their own minds,* even if other people say “Hey, what right do you have to limit my exposure to vanity press (i.e. xylitol)??”

    Right? I mean, as you say,no one *needs* RWA. People can shop at any ‘store,’ or decline ‘shopping’ at all. RWA is purely voluntary on everyone’s part, and any leverage they have is as a result of their own efforts, and others deeming them worthy of legitmacy and reputation. For them to then have give that legitimacy away, or risk being sued, is kinda nuts.

    It feels like someone saying Consumer Reports has to start saying nice things about all Mattell products, b/c they’ve really been bashing them recently. And everyone has a right to have access portals to Mattell products, right? Consumer Reports would have no right to deny ‘access,’ such a case.

    Now, I suppose there’s the stance that RWA, by virtue of being a trade org., has certain powers they can’t abuse. And via any action, RWA might stop authors from going w/ certain publishers, due to fear that they could not get RWA approved status via those publishers? Is that it, from a legal perspective?

    Seriously, tho, then, what is the point of a trade organization? At what point do people (and in this case, yes, trade organizations) get to say “We think this is good/bad; that’s our own opinion.”

    (I’m not asking you per se, Magdalen. :-) Just thinking out loud)

    RWA can’t make agents stop taking on clients then selling then to HQ. They can’t stop RWA members from buying vanity packages from DellArte. *They have no power.* It’s so fundamentally different from any other non-Arts (hmmm, & Arts but non-Hollywood) trade organization that the magnitude of scale makes RWA qualitatively different.

    RWA has no lobbying power. Agents don’t need RWA. Authors don’t need RWA. Publishers don’t rely on them. RWA doesn’t send people to Capitol Hill. There’s no union. I think RWA is fundamentally different from a trade assoc. like the Sugar Assoc. Inc.

    (And I admit, I get highly irritated at being told I have to do something that’s against my values, b/c of a non-crushing financial interest that serves the party with whom I have a moral disagreement.)

    Magdalen said: “And if RWA can’t require its members to behave in a certain way, how does it have the power to require the contract between HQN and the author to be for a certain amount of money?”

    You’re right; they don’t. Again, not being a lawyer, I am way out of my league here, but it seems to me that, whatever the outcome of RWA Board actions, RWA would be in no way dictating contractual elements. As you say, it hasn’t the power or right. It would simply be saying that, should certain contractual elements be lacking, these contracts (or any contracts with the House that perpetrated base practices–not sure the legal terms) would not meet RWA”s threshold, and therefore would not ‘earn’ certain designations.

    And everyone can buy their xylitol anyhow. But RWA would still get to say, ‘We no like.”

    I guess I don’t get why that would not kosher, legally.

    Magdalen said: “For RWA to dictate the terms of a contract between a commercial publisher and a writer, RWA has to have some leverage on either or both parties to that contract.”

    Exactly. And as you say (I think I’m repeating myself), I just don’t see that what RWA *might* do as any sort of dictatorial action. It would simply be saying that, for this organization, these things don’t fit. Don’t like it? Well, nothing RWA can do. Guess you get to go on, doing business any way you want. Bye.

    Thanks for all the lawyer-ly thoughts for this non-lawyer. You guys probably couldn’t even tell I wasn’t a lawyer, huh?
    :-)

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  13. Kris, I think you and Magdalen completely agree. You should be beating up on me instead.

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  14. Kris Kennedy says:

    Thanks for saying that. I was just using her words as a springboard to make all my own points (selfish, I know), but I did worry it would sound like I was angry with her, when really, I was angry with you. ;-)

    Sorry Magdalen!

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  15. So just to let you know what I’m worried about, go to this link and search for “ARTA.” In 1995, ARTA, set up standards that said that travel agents should try to take a minimum 10% commission. Nothing about those objectives was binding on members. But one member of the board said somethink like this: “I, for one, will not interact with other travel agents unless they adhere to these standards, and I suggest you do as well.”

    The DOJ charged ARTA with price-fixing. ARTA gave a suggested price, and suggested a means of enforcing the price-fixing.

    You can read the DOJ’s complaint here: http://www.justice.gov/atr/cases/f209100/209152.htm

    ARTA is now operating under consent decree.

    I don’t think you have to look far to see how this can happen with RWA. RWA has already promulgated financial standards in question, saying no member should take more than $1000. To put it on all fours with ARTA, imagine a Board member saying, “We need to punish Harlequin–from here on out, I will not blurb books written by Harlequin authors, or purchase them, or suggest that anyone else do so, and I hope all other RWA members do the same.”

    Having promulgated pricing standards, RWA absolutely needs to keep its nose clean so that it does not appear to even breathe a suggestion that members fix prices.

    The other thing to notice is that RWA is not just the National Organization; it is a collective group of romance authors who produce competing products, so everything we do in concert will be scrutinized. A barely organized collective, yes, but the more organized and the more pointed it becomes, the more likely it will run afoul of antitrust law without being careful.

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  16. Also, in fifty years, I’ll croak out something like “The Association of Retail Travel Agents…” and the young whipper-snappers will all say, “Wut? How do you mean this phrase: ‘travel agent’?”

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  17. Kris Kennedy says:

    Courtney said: “In 1995, ARTA, set up standards that said that travel agents should try to take a minimum 10% commission. Nothing about those objectives was binding on members. But one member of the board said something like this: “I, for one, will not interact with other travel agents unless they adhere to these standards, and I suggest you do as well.”

    The DOJ charged ARTA with price-fixing. ARTA gave a suggested price, and suggested a means of enforcing the price-fixing.”

    And this is why I could never be a lawyer. So WHAT if individuals decided to take particular action based on what a trade organization said was in their own best interests? So what if their interpretation was off? (Unfortunately, if we were making laws, it should be against people acting stupid.) So what if the trade members did it en masse? That’s the whole point, right?

    A trade organization says what it believes is best for its members. That has repercussions. Yes, *sometimes* they can be far-reaching, unintended, and huge, reaching a threshold that the *average* person might consider to be ‘predatory’ or ‘price-fixing’ or other legal terms. Generally, I’d assume, they do not reach these proportions.

    I am not surprised by the case you cited, Courtney, but it’s the kind of thing that makes me nuts. People and organizations should be allowed to have opinions that have repercussions.

    RWA has no real power, like, say, the Sugar Assoc. or Microsoft. If they have no implied or ‘granted’ power either (again, don’t know the legal terms) then what the heck are they? Nothing.

    And is there a place for this argument: As an individual, I get to make decisions about what I want to do, based on whatever criteria and opinions I want. If I chose to use RWA’s opinions as part of my decision-making process, so be it. RWA shouldn’t be punished b/c of that. RWA *has no power over me,* so I’ve been in no way coerced, overtly or implicitly, to comply. (i.e. binding)

    What about all the people who make decisions based on what Bill O’Reilly or Greenpeace say, or worse yet, *didn’t* say, but perhaps implied. (Altho I’m sure there’s some legal distinction.)

    Ack.

    The legal stuff is very dicey, Courtney. It’s good to discuss, altho it makes me grumbly.

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  18. Magdalen says:

    Kris & Courtney — The devil, here, is in the details. RWA represents writers — a lot of them — and frankly, getting the membership of RWA to act in concerted action (i.e., all the same, and for the same reason) is theoretically possible, but factually unlikely.

    So, Kris — Courtney is right that RWA could be seen by the Dept. of Justice as a trade association that has the power to reduce competition in the marketplace by requiring its members to act in a certain way.

    But Courtney — Kris and I are saying that’s not very likely in the real world. There are so many factual distinctions between RWA and ARTA (and that’s ARTA pre-1995, so pre-Expedia, pre-Orbitz, etc.) that the DoJ might decide not to pursue an antitrust claim, or would fail if they did.

    One thing about Mr. Tom’s speech that struck me is that there was an example given of an ARTA board member saying he/she wouldn’t deal with an ARTA-member travel agency if it wouldn’t abide by the (illegal) ARTA restrictions.

    Now, imagine the parallel scenario: RWA mandates that authors not contract with publishers unless they get at least $1,000 in an advance. A writer defies that mandate and enters into a contract with a publisher with no $1,000+ advance. RWA does what? Cancels that writer’s membership? What effect does that really have?

    Industry trade associations are generally very powerful because they charge their members fees sufficiently large to permit the association to have real lobbying and other power on behalf of its members. Those fees make economic sense to the members because they represent the power of collective action.

    RWA’s fees aren’t that large, and even though there are thousands of members, RWA doesn’t do anything (that anyone’s told me about, and I am a member) that strikes me as analogous to the market power of an ARTA or the Sugar Association. I can more easily imagine a writer saying testily, “RWA doesn’t speak for me,” than saying, “Well, I have to do it this way because RWA says so.”

    Which is Kris’s point, so now I’m guilty of stealing from her!

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  19. Magdalen and Kris, here’s where I think we disagree. You are thinking “RWA=National Board,” and National Board cannot make me do anything.

    I am thinking, “RWA=collective of 10,000 romance writers, who if they actually acted in concert would be very capable of fixing prices.”

    WE are RWA–all the authors together–not just the pronouncements of the Board. My guess is that more than 50% of romance authors are RWA members. The membership of RWA has significant market power. We do not presently act in concert, which is good, because that would be a violation of antitrust law. We need to make sure that we continue to not act in concert.

    The national board has already disseminated suggested pricing data. That in and of itself is not going to run afoul of antitrust law. The question is: does RWA do anything beyond that to suggest that writers ought to comply with their objectives? If the carrot they wave, or the stick they brandish, gets sufficiently large, there are serious issues with this.

    The farther they go along that path, the greater the danger that there are antitrust dangers.

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  20. Shannon says:

    Okay, let me preface this by saying that I’m not a lawyer so I may be misusing terms but I think everyone will understand my meaning.

    Courtney — I think the proposition above with each category/entity can apply on their own is brilliant.

    When I read the above and kept seeing “division of Harlequin,” it made me wonder what the actual legal status of these “divisions” were. I’ve worked for large privately held companies and Fortune 500 companies, and in both types of organizations, we have used the word “division” as a marketing tool so we could keep their name and associate ours with it. Sometimes we had just done an asset purchase of a company and everything rolled under the parent company (the former company didn’t legal exist anymore but we used the name because of the brand) but in some cases, the “division” was either an acquired or created company that had a separate legal entity that filed their own taxes, had separate Fed ID numbers, D&B numbers, bank accounts, etc. It’s done all the time in engineering/construction world.

    Harlequin is in Canada, owned by a Swiss company and operates out of London, NY and Toronto. I’m sure there are multiple business entities at work here. So I have to wonder how many of Harlequin’s “divisions/departments” (Mills & Boon (acquired), Harlequin, Silhouette (acquired), Mira, HQN, Carina Press, Della Arte (partnership, I believe), etc) are separate legal entities? If some of these lines are somewhat of their own business entity then I don’t see why they can’t be considered a seperate publisher. That may be able to take care of the Della Arte issue but depending on how Carina Press is set-up, it may not be a catch-all.

    While I think the idea of vanity press is just wrong on so many levels, if Harlequin didn’t use Harlequin resources or name, I could live with them having a financial interest in a joint-venture/partnership that was legally separate from the main company.

    As an aside, I did receive a rejection from Harlequin Mills & Boon yesterday and it did not have any reference to DellArte in there at all.

    ~ Shannon

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  21. AQ says:

    Have you requested that the policies and procedure manual be made available to you as a RWA member or do your working assumptions rely only on the posted bylaws?

    RWA, I do not think, has a legitimate interest in “punishing” Harlequin for its choice to run a vanity press (however outraged members of RWA might be).

    1. Writers organizations’ objections to vanity publishing are well known and documented
    2. Harlequin did not confer with RWA, MWA, SFWA, etc. prior to either
    a. signing the final negotiated contract with Author Solutions
    b. publicly announcing Harlequin Horizons

    Conclusion:
    During Harlequin’s risk assessment phrase “publisher eligibility lists” were determined to have no significant impact on Harlequin’s business.

    How can removal from a list which the publisher has deemed insignificant be considered punishment?

    What we are not free to do, as a group of authors, is to enter into a combination to tell Harlequin they may not make contracts at all with competitors. And the reason why we cannot do that is that it would be illegal under antitrust law.

    In other words there should be no such thing as a publisher eligibility list for any writers organization. If antitrust law can be invoked then it reaches beyond Harlequin, DellArte and RWA.

    Amend the policies and procedures to say that no RWA Eligible publisher can refer rejections to a vanity or subsidy publisher

    Harlequin would first have to be convinced to change its stated business practices as it pertains to DellArte. How is this different that the claim that RWA is interfering with Harlequin’s business by asking it to divest itself from DellArte?

    Collectively pressuring an organization to raise the price of the books that we produce? That’s a per se violation of antitrust law, and it’s punishable by criminal penalities, along side civil treble damages.

    RWA does not produce books and has no control over publisher/retailer list pricing to the consumer. RWA has no control over whether or not a publisher offers a contract to a given work and no place at the table during the contract negotiations. There’s no binding RWA membership requirement which dictates terms or interferes with a member’s right to sign any contract, even a contract with a vanity publisher. Membership is open to non-authors. And publishers contract works from non-RWA members. In Harlequin case, they actively solicit works from the general public via their submission guidelines posted on their website.

    So how does RWA have the ability to raise the price of books?

    Or did you mean the cost of acquiring works to be packaged as books for sale? If so, how?

    I also note that even though Carina Press does not use the name “Harlequin” it still identifies itself as a division of Harlequin Enterprises…

    Harlequin should be excluded if Carina does not meet the criteria for the publisher eligibility list. The question is what kick starts the re-certification process? Publisher announcements? Quarterly, annual recertification? Do we know what the policies and procedures manual say about the re-certification process?

    To answer this, we have to ask what constitutes a “publisher” under the RWA bylaws and its policies and procedures. And, interestingly enough, the bylaws are silent on the question.

    But what does the policies and procedures manual say?

    …for instance, both “HarperCollins” and “Avon Books” appear on RWA’s Eligible Publisher list, even though Avon is not, to the best of my knowledge, an actual separate corporate entity….

    Were they separate entities when they initially applied for eligibility, is this a matter of quick division/imprint recognition for the ease of RWA’s membership and/or a paperwork error by corporate staff?

    With the evidence currently available is there a way to make that determination?

    Currently, RWA appears to deal with that by letting publishers define who exactly they are when they apply for eligibility.

    Can this statement be proven without inquiry into the policies and procedures used to determine publisher eligibility? Shouldn’t the benefit of the doubt be given to the organization by its members until proven otherwise? Then if a discrepancy is found appropriate steps can be taken.

    Carry on with the status quo and let the publisher define what constitutes a publisher.

    If this is the status quo, then the publisher eligibility list should be immediately discontinued because RWA is letting publishers dictate the list and the list is essentially meaningless.

    Quick fix: Amend the policies and procedures to say that no RWA Eligible publisher can refer rejections to a vanity or subsidy publisher (this is obvious); and amend the policies and procedures to say that a publisher must produce at least N books a year (where N is an amount that may be hypothetically set at 24).

    Again how is this different than telling Harlequin to divest it’s vanity publishing division?

    What happens when the next “publisher” comes along and says “Sorry 24 too much. We’ll only agree to 15.”

    It’s all about the precedent. If publishers have that much influence over the list where the latest experiments can change the list on the fly then the list becomes meaningless to the membership.

    “But Courtney,” you say, “that is not a minor alteration. The e-publishing model doesn’t include an advance.”

    and

    If you believe you can guarantee decent royalties for a good number of authors (although not for all of them), you’re in.

    It’s much more complicated than that. How and when did the minimum advance become publisher eligibility list criteria? What does “decent royalties” mean? What is “good number of authors”? How would this be monitored? If RWA had to assume a policing role to accomplish monitoring would membership fees increase?

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  22. Magdalen says:

    I am thinking, “RWA=collective of 10,000 romance writers, who if they actually acted in concert would be very capable of fixing prices.”

    No, RWA is an organization with 10,000 members. We’re not a collective, in either the plain language sense or the legal sense. And while I have no idea how many RWA-member writers would have to act in concert to satisfy the standards for a Sherman Act violation, there would have to be some additional evidence that the actions of those writers were, in fact, a concerted effort to restrain trade (particularly as there is a separate and benign motive for any individual writer to insist on a relatively modest advance).

    IF the National Board tells us to demand a $1,000 advance AND if every RWA-member writer in a position to make that demand did make that demand, you could argue that the actions of that small number of writers (because, really, how many RWA members will be negotiating a contract for the first time this year?) is somehow restraint of trade.

    Oh, except for the fact that RWA’s membership is only half of all romance writers. It’s a little hard to argue restraint of trade when you’re only talking about half of a market.

    Courtney, you’re a smart person, and I’m sure you are or were a great lawyer. You and I both know there is no “right” answer here until & unless there is a case that is litigated to a conclusion. And there isn’t going to be a case, so we’re never going to have an answer. I have doubtless failed to convince you that RWA is about as close to committing an antitrust violation as I am to fitting into a size 6 dress. And I suspect you know that you’re not any closer to convincing me that a couple hundred writers negotiating contracts with advice from the RWA National Board in their hands will constitute a collective flexing of real market muscle. You’re welcome to keep trying, but I think I’ll stop with a smiley face (just because, you know, I don’t get to put those into legal briefs!) :-)

    On the more practical matter of how to reinstate Harlequin without looking like it was backing down, I was thinking that perhaps RWA could make it a proportional test: Every publisher with both a commercial enterprise and a vanity press enterprise cannot publish more than 25% of their annual total of titles through the vanity press. Harlequin has what, 600 commercial titles each year? So as long as Dellarte doesn’t print more than 200 individual titles, HQN is still an eligible publisher.

    As for Harlequin’s referral to Dellarte in its rejection letters, it’s slimy but the same thing would be accomplished by Harlequin selling the slush pile mailing list to Dellarte. I gather it wouldn’t be the first slimy thing Harlequin has done, nor the last.

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  23. AQ says:

    Harlequin has what, 600 commercial titles each year

    Somewhere in the neighbor of 1,200 annual release according to their press.

    RWA is an organization with 10,000 members.

    How many of those members have publishing contracts or are pursuing a career as an author?

    The RWA list for author websites* comes in around 1,600 authors listed.

    * probably an incomplete “published” author list

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  24. Magdalen says:

    AQ — Thanks for the accurate figures!

    So what do you think — if RWA told HQN: as long as Dellarte publishes fewer than 400 titles annually (using my arbitrary 25% figure), HQN is still an eligible publisher — would that work? Would the proportional approach work with a different percentage?

    What I like about it is, smaller publishers with both a fee-based service and a commercial imprint might not be eligible because the number of vanity-published titles would be too large. But a large company like HQN gets the benefit of their proportionally larger numbers.

    I guess RWA might restrict it to romance titles, so that Random House can’t drag in every title they publish (and that assumes that they are deemed to have a vanity press, which is not a clear cut thing).

    With respect to RWA’s members, doesn’t that list get broken out to various types of membership depending on whether a member is actively pursuing a writing career, is already published, or just wants to support the industry? So then we’re only talking about those members who are actively pursuing a writing career but don’t yet have a contract. Still, as we know, a lot of members aren’t currently writing (gave up or life circumstances or whatever) despite their status.

    All I can say, is 1) I hope RWA has great legal counsel, and 2) I’m looking forward to seeing what the National Board comes up with after meeting in Houston next month!

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  25. AQ, if you’re a member of RWA the Policies & Procedures manual is available for download under the “Governance” section of the website. I downloaded. I’ve read it several times. That’s why I said that “publisher” was not defined under its bylaws or policies and procedures. If I had only read the bylaws, I would have stated so.

    As for the eligibility requirements themselves, my understanding is that in their current form (e.g., a form that requires a minimum advance) they are of recent inception. Again, if you are an RWA member, the Eligible Publisher definition was changed to require an advance in the July 8, 2007 board meeting–check the minutes.

    That means that everyone who is an eligible publisher now probably had to recertify in 2007 (my “probably” indicates that I don’t have direct evidence, and this is conjecture) and so any worries about people becoming eligible and just staying on the list without comment or question are probably fruitless. I’m unable to answer some of the other historical questions as the minutes for the decisions are not on the website.

    Finally, as to Harlequin’s decision-making process: There were a handful of things that Harlequin has said that makes me think that this decision was, on multiple levels, bone-headed. Not least was the assertion, which I think Harlequin believed, that the “Harlequin Horizons” brand would be author-facing only–something that any halfway decent trademark lawyer should have looked at and said, “AHEM. Nominative fair use, anyone?” Given evidence of boneheadedness in the decision-making process, I am not going to come to any conclusions about what they thought RWA/MWA etc. would do–maybe they made that evaluation and shrugged off the consequences. Or maybe they didn’t think about the implications. Or maybe they assumed after Westbow Press went live without a word from the major writers’ associations that it wouldn’t be a big deal.

    No way for us to tell which one it is, but there’s honest boneheadedness going on, so I’m not going to assume that everything here was the result of an honest-to-God profit/loss calculation on their part.

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  26. All I can say, is 1) I hope RWA has great legal counsel, and 2) I’m looking forward to seeing what the National Board comes up with after meeting in Houston next month!

    On this, we are in complete agreement! :)

    What I really want to know is, why are the minutes for that all-important November meeting not on the RWA website yet? It has been 30 days. Has the Board still not approved them? Wah. Governance junkies want to know!

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  27. Eva says:

    I think those ideas are awesome. Let’s hope that RWA listens to what you have to say.

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  28. AQ says:

    @Magdalen

    So what do you think — if RWA told HQN: as long as Dellarte publishes fewer than 400 titles annually (using my arbitrary 25% figure), HQN is still an eligible publisher — would that work? Would the proportional approach work with a different percentage?

    Unworkable is the first word that pops into my head. On DearAuthor I ran a few numbers for fun.

    1,113 X $600 = $667,800 in total sales (NOT PROFIT) from BASIC service packages in the first year

    Assuming that most of the money is in the package and not any subsequent book sales. Now my just-for-fun numbers didn’t include any ala carte purchases. Still for the risk to the brand, one would assume that HQ & AS’s business plan would call for much larger numbers. Using my DA example only because I have the numbers handy, HQ’s 2003 gross profits were $124 million. If the point of this venture is to bring an additional revenue stream in, how many packages would they have to sell in order for it to increase Harlequin’s bottomline enough to be considered worthwhile.

    doesn’t that list get broken out to various types of membership depending on whether a member is actively pursuing a writing career, is already published, or just wants to support the industry

    The categories can be found in the bylaws.

    Re: the 1,600 number I provide that’s the number of “professional” author websites, not the total for those actively engaged in becoming published or the total published authors. Since I’m not a member perhaps Courtney can provide more accurate numbers or percentages for the membership category breakdowns.

    One thing of note is that the way RWA handles membership is different than say MWA or SFWA. I believe that RWA is only writers organization that active courts and counts non-“professional” authors as part of it’s membership. Maybe Courtney can qualify that as well.

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  29. AQ says:

    @Courtney

    Not an RWA member. Jane promoted your idea as a win win so I came to read and then had questions. Since you spent 25% of your post advocating for the e-publishers, I thought I’d ask some questions to get more insight into the issue because my outsider perspective says that it’s a very complicated issue.


    That’s why I said that “publisher” was not defined under its bylaws or policies and procedures.

    You mention the Policies & Procedure Manual twice. Once when asking what constitutes a “publisher”. You say that the bylaws are silent on the question of what constitutes a publisher but you don’t address what the Policies & Procedure Manual says. The second time you’re calling for the policies & procedures to be amended. From those two paragraph references, I couldn’t make a determination one way or the other so I asked.

    As for the eligibility requirements themselves, my understanding is that in their current form (e.g., a form that requires a minimum advance) they are of recent inception. Again, if you are an RWA member, the Eligible Publisher definition was changed to require an advance in the July 8, 2007 board meeting–check the minutes.

    I’m not a member. The reason I asked is because I remember the publicity from that time surrounding an RWA “eligible” digital publisher and reaction it garnered from the general online romance community.

    My suspicion was that the eligibility change was made on a reactionary basis due to extraordinary circumstances caused by a digital publisher.

    You’ve hammered on the $1,000 minimum advance as a potential anti-trust issue so I think it’s important to understand how that change to the publisher eligibility came about and why?

    Once we know that, there might be other solutions available that eliminate the need for the advance criteria while meeting the objective of a viable career option for the many (the author group) as opposed to the few (individual authors).

    As this issue seems very important to you, I hope you will research the background information further. Perhaps you will be able to propose and advocate solutions that the Board has not thought.

    Harlequin’s decision-making process…

    Boneheadedness. I think I’ll steal that from you.

    For me that “boneheadedness” might translate into:

    1. Risk assessment did not look at the writers organizations situation;
    2. Risk assessment did not think the writers organizations were a significant concern;
    3. Risk assessment didn’t perform due diligence if you’re comment about nominative fair use is any indication;
    4. PR wasn’t prepared to do their jobs despite the fact that contract negotiations, new division creation, business practices for the editorial staff, website redesign, logo creation, etc. Pulling all of these individual business components require more than two weeks. The Westbow Press announcement did happen two weeks before the Harlequin announcement but the creation of this publishing venture took much longer than that.
    5. And so on.

    So why should RWA adjust their “standards” for a “boneheaded” publisher and what happens the next time there’s some new boneheaded business plan from the same publisher or a different one?

    ——

    Here’s what I said on Dear Author about your proposals:

    1. This would require that every publisher’s divisions and/or imprints be certified, not just Harlequin’s.

    2. There would need to be two lists: eligible and ineligible because of potential for name confusion / blurring.

    3. Imprints/Divisions come and go so the list would need to be constantly updated.

    4. How would RWA certify that Harlequin wasn’t sending slush pile rejections a referral to the vanity division? How would RWA certify that Harlequin editors only discussed eligible imprints?

    5. What happens if Harlequin or any publisher imprint failed to live up to criteria? Is RWA wiling to declare the entire enterprise ineligible? a division? Is there an appeal process? Is there a X number of strikes and out policy?

    6. Right now the issue is Harlequin & DellArte but we can’t assume the issue starts and ends here. Is RWA willing to monitor all publishers in this fashion down to a division/imprint level once this door gets opened?

    7. What happens when the next publisher “experiment” comes along which fails to meet the P.E. List’s criteria, will RWA adjust the criteria then as well so a major publisher can remain eligible?

    8. What happens if a vanity publisher decides to open a “non-vanity” division?

    Or perhaps the publisher eligibility list just gets scrapped.

    Whatever is decided is a major precedent so the decision needs to reflect a long-term view of the issue.

    solid e-publishers to become RWA Eligible, with only minor alterations to their practices.

    The e-publisher issue is a separate part of the publisher eligibility discussion. Rushing to find a two for one solution in January does neither the digital publishers or RWA’s membership justice. In my view, the solution requires a lot more thought from the Board as well as input from membership and digital publishers.

    ETA: If RWA maintained a completely hands-off approach, authors might not have control over their pennames. That is the issue that RWA advocated for, isn’t it?

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  30. Magdalen says:

    AQ —

    Obviously only a few people know what was actually going through the HQN executives’ heads when they agreed to a joint venture with Author Solutions. My guess is that it seemed like free money: they were providing a massive brand name, a large pool of likely-to-be-motivated customers, and genre-specific expertise. No capital outlay, the joint venture would monetize the slush pile, and any additional work required of HQN staff would be absorbed by existing personnel.

    If I’m even close to being right, any money realized from Dellarte would be pure profits on HQN’s spreadsheet. So if the basis for your objection to RWA establishing a proportional cap on vanity-published titles is that it’s financially unworkable from HQN’s viewpoint (i.e, they “need” to get more profit from the venture than that) I’d disagree. With virtually no explicit outlay, any money HQN gets from Dellarte is more profit to an already profitable company. (Obviously, Author Solutions will have overhead and expenses, etc., although that will be spread out over its many vanity press operations, so the proportion attributable to Dellarte will be small.)

    I still think my idea might work, and here’s why: If RWA said HQN is an eligible publisher provided Dellarte titles are no more than 25% of HQNs total annual titles, then there’s a cap on Dellarte titles.

    Obviously, if fewer than 400 authors want to use Dellarte, no harm no foul. But if more than 400 authors want to use Dellarte, and if HQN wants to make more money from Dellarte, that really does tell us (RWA-members and non-members alike) something about HQN, doesn’t it?

    If HQN wanted to retain its eligible publisher status, and was willing to abide by the 400 titles cap, then Dellarte might actually pick & choose among the “applicants” for their services. Which is hardly the imprimatur of quality, but it’s a start. And overflow candidates might get rejection letters from Dellarte that refer them to one of Author Solutions’ other vanity presses!

    I have to admit, that last part cracks me up — Can you imagine how annoying it would be to get “rejected” by a vanity press you were referred to? And then referred again to another vanity press? Maybe that’s really the problem: If Dellarte turns down customers, is it screwing up its own business model?

    But that’s HQN’s problem. And I don’t have a lot of sympathy with their problems.

    Courtney’s original idea was to provide RWA with a way to rehabilitate HQN imprints to “eligible” status, and maybe that’s the way RWA will go. I have an objection to that plan based on the brand-name issue: Not all of HQN’s lines are sufficiently distinct to satisfy conventional notions of an imprint’s identity.

    By contrast, Avon is an imprint of Harper Collins, but it has its own independent name recognition: a different house could acquire Avon Books and we’d still expect Avon Books to be Avon Books in quality and style.

    Silhouette still has independent name recognition (as does Mills & Boon), but most of the other imprints are branded as Harlequins. “Blaze” is a descriptor more than a stand-alone brand; it tells the reader how racy the romance will be. I think it’s another case of form over substance to treat “Harlequin Historicals” as an imprint equivalent to Avon.

    But the underlying logic — that Harlequin distance itself, as it has already done, from Dellarte enough for RWA to treat Dellarte as substantially different from HQN’s other lines — is sound. How RWA implements that will tell us a lot about RWA!

    So, everyone’s going to get something out of this: Courtney’s governance-junkie soul will (eventually) get minutes and new by-laws (or something) to pore over. You and I will get to see how RWA handles the situation, and later on, how HQN handles the situation.

    It may not be a “happy” new year, but it sure will be interesting!

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  31. AQ says:

    …any additional work required of HQN staff would be absorbed by existing personnel.

    According to the press, the Harlequin division is outsourced to Author Solutions so it will be Author Solutions employees/contractors who make the “publishing” decisions. There won’t be any picking or choosing of “titles” or absorption of additional duties by Harlequin employees unless Harlequin’s publicly stated business practices as it pertains to DellArte change.

    If I’m even close to being right, any money realized from Dellarte would be pure profits on HQN’s spreadsheet. So if the basis for your objection to RWA establishing a proportional cap on vanity-published titles is that it’s financially unworkable from HQN’s viewpoint

    If the purpose of the venture is to monetize your slush pile and that slush pile receives ten of thousands of submissions (Kristin from Pub Rants reported 38,000 queries in 2009 for her agency – does Harlequin get more or less?), why would one business (Harlequin) let alone two (Author Solutions) agree to limit releases to only 400 annually? And how would RWA police something like that? Books released through DellArte aren’t required to have an ISBN so using a third party like Bowker would not be available here.

    Given Harlequin’s US marketplace expansion (they doubled their releases earlier this decade), their branding deal with NASCAR, creation of a online retail store and aggressive entry into the digital marketspace compared to other traditional publishers, my default position is to view this as a corporate business strategy created with the potential to generate revenue that adds at least 1-5 percentage points to gross profits.

    Courtney’s original idea was to provide RWA with a way to rehabilitate HQN imprints to “eligible” status

    There are currently 41 “imprints” listed under 8 “divisions” on the eHarlequin website. Or you could say there are 41 “lines” under 8 “imprints”. I’m not sure of the official corporate terminology Harlequin uses and I’m assuming we’re only concerned with the North American marketspace, not the UK or France, etc.

    If RWA does breakdown for Harlequin, every publisher that they “approve” would need to “approved” under the same criteria unless Harlequin is granted “special” status.

    It would be a nightmare to manage. Not impossible but difficult and a resource hog especially to get a system up and running: defining the criteria, researching corporate structure, testing the data and creating the database to house the information. Then maintaining it.

    Re: Avon Books and the rest. I asked Courtney this:

    Were they separate entities when they initially applied for eligibility, is this a matter of quick division/imprint recognition for the ease of RWA’s membership and/or a paperwork error by corporate staff?

    Regardless of the answer, if Harlequin is parsed with new criteria then all publishers would have to be evaluated and parsed with the new criteria.

    But the underlying logic — that Harlequin distance itself, as it has already done, from Dellarte enough for RWA to treat Dellarte as substantially different from HQN’s other lines — is sound.

    Sorry, could you explain this one please?

    You and I will get to see how RWA handles the situation, and later on, how HQN handles the situation.

    The only thing I’m interested in is how RWA conducts itself. That will tell us a lot about their long-term vision of the publishing world and whether or not they are prepared to assist their membership with the changes/challenges that authors will face in the coming years.

    What Harlequin does or doesn’t do is of no concern to me because there will always be that next great thing or experiment. Even if Harlequin were to fully divest itself of the DellArte division (not something I believe they’ll do), you can be sure that the issue would come up again. Corporations are like that. They have the resources to keep hammering away at issues year after year.

    RWA’s board is not in an easy position. They’re being forced to react. It comes down to principles vs. economic realities vs. the pros and cons. With Harlequin controlling 50% of the romance marketplace, the decision made become huge.

    I hope membership moves itself out of reactionary mode and fully considers the long-term implications and the best of the options available to it. This isn’t a right or wrong, either or situation given the scope. But it is an issue which needs indepth analysis, debate and legal council. Perhaps even input from other writers organizations. RWA has the most at stake here but they might be establishing some precedents that reach beyond their membership.

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  32. Magdalen says:

    I think the accounting of DellArte titles wouldn’t be that hard; RWA could demand some non-proprietary data annually from HQN. I really doubt that 38,000 frustrated writers are going to pony up $2,000+ apiece just to see a book with their name on it. But you may be right that HQN’s projections are for more than 400! Still, it would be a rule that makes more sense (to me at least) going forward.

    But the underlying logic — that Harlequin distance itself, as it has already done, from DellArte enough for RWA to treat DellArte as substantially different from HQN’s other lines — is sound.

    Sorry, could you explain this one please?

    I don’t think anyone disagrees that if HQN divested its corporate ownership of DellArte as a division, and it became, say, a division of TorStar (with profits going directly to TorStar), then HQN no longer is a vanity publisher. It may look like a form-over-substance transition, but it would be significant, particularly as HQN is profitable where TorStar is not.

    Let’s say TorStar has to seek the Canadian equivalent of protection in the bankruptcy courts from its creditors (what would be Chapter 11 here). HQN is its cash cow; TorStar’s creditors would want to see it sold off in a way that maximized the asset for the debtor. DellArte wouldn’t be part of that sale; the half-share of DellArte (in my hypothetical) would be an asset owned directly by TorStar.

    So it matters where in the corporate family DellArte falls.

    On the flip side, maybe what bothers RWA is the monetization of the slush pile through automatic referrals to DellArte. If HQN said it wasn’t going to do that, then there’s really no link to Harlequin as a publisher of romances, so HQN could argue: Yes, we own half of DellArte, but DellArte is now just a generic vanity publisher, so it’s sufficiently “separate” from Harlequin.

    In the first hypothetical, DellArte is no longer a corporate division of HQN; in the second, it’s still a corporate division, but all substantive connection to HQN as a romance publisher has been severed.

    Would either of those steps be enough to satisfy RWA? Or will RWA be satisfied with the steps HQN has already taken?

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  33. AQ says:

    Hey Magdalen!

    Happy New Year! I apologize for not answering sooner but I promised that I’d take the holidays off.

    For me the issue is: HQ is now a publisher with a vanity division. What’s the cost benefit analysis of the situation?

    Until the initial cost benefit analysis is done, hypothetical have no bearing on the scenario and any decision making.

    No matter how you slice it I’m left with: what will RWA do?

    What’s their long-term vision of the scenario? How will their decision affect other writers organizations? Which major publishers will follow in Harlequin’s footsteps? What does that mean for authors as a class?

    RWA will set a precedent with their dealings with HQ and they will have to live with the long-term implications of their decision because they have the most to lose as it pertains to romance genre marketplace.

    I hope that they do a cost benefit analysis rather than concentrating on hypotheticals because hypotethicals tend to concentrate on the short-term rather than the long term.

    ReplyReply

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Courtney Milan writes historical romance novels like the ones you see to the right. She still remembers bits and pieces from her old lives, where she was (variously) a scientist and a lawyer.

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