Harlequin and E-Pubbing

According to the most recent edition of Publisher's Weekly:

Harlequin posted modest gains in the second quarter ended June 30, with total revenue up 1.2%, to £$116 million ($110.2 million). Operating income, however, jumped 22%, to £$12.5 million ($11.9 million). The improvement in earnings was attributed in part to last year’s restructuring, which eliminated about 40 positions; parent company Torstar said the reorganization resulted in cost savings of £$900,000 in the second quarter and £$1.8 million for the first half of the year. Revenue in the first six months rose 3.1%, to £$240.4 million, and operating profit increased to £$31.6 million from £$25.3 million.

In the second quarter, Harlequin said sales were flat in its North American retail division, with the number of series books sold offset by a decline in single title sales. Direct-to-consumer sales continued their downward trend in the quarter. Harlequin head Donna Hayes said series units were off slightly due to a change in timing of promotions, but that dollar sales were up. Two titles by Debbie Macomber were among Harlequin’s top single title sellers, while the company’s paranormal series had a strong quarter, and a new African-American series, Kimani, also gained traction in the period. Unlike more general interest trade houses, Hayes said sales through retailers have been solid, with several accounts reporting that romance in general has been a good category. (An aside from me: romance books account for over 50% of all mass market book sales. So while other genres may not be seeing strong sales, it looks like we're still going strong. That says something...) Sales through online retailers have grown by double digits.

E-book sales also rose in the period, albeit from a small base. (Another aside from me: Heads up, all you print authors who are so disdainful of those of us who are published electronically. Look at this:) Still, Harlequin has seen enough growth in the format to introduce a new line. Spice Briefs will be original erotic e-books in the 5,000- to 15,000-word range. The price will be $2.99, although the company is offering the titles at 99 cents until Aug. 15. Two titles will be published per month and will be available in all e-book formats. Hayes said that beginning this month, Harlequin will create an e-book edition of every new book it releases, a total of 1,300 books a year.

Yep. Harlequin, the largest publisher of romantic fiction, has entered the e-pubbing world. Unfortunately, they're not paying e-pub royalties like the rest of electronic publishers. Ostensibly because they still have all the overhead with putting a book in print. But that would explain to me why a print royalty might be, say, 6-8% of the price of the book. But that same overhead is *not* associated with electronic publishing--there's no paper to buy, no warehouse shelves to fill. There are editor costs and artist costs, the cost of maintaining the website and the salaries associated there, but that's about it. So while electronic publishers generally pay 35-40% royalty on the price of the book, I'm hearing that Harlequin will continue to pay the 6-8% royalty.

I have a couple of friends who have encouraged me to submit something for this new Spice Briefs line. I'll admit I'm torn. On one hand, it's Harlequin, so the potential audience is much wider than what I'm exposed to now. Having a Brief accepted gets my foot in the door at Harlequin, too.

But...to only pay 6-8% (and as a new Harlequin author, it's very probable I'd get the lower end of that range) on something that otherwise I would make 35-40% on... It bites, big time.

But, long-term, which is better? That's the question.



"Romance has been elegantly defined as the offspring of fiction and love." ~Benjamin Disraeli