The attack of the renewal fees

Yesterday I received two e-mails from authors complaining about the newly instituted renewal/storage fees that some POD publishers are charging, and some of these fees seem to be as high as $50.00 a year per version, so what’s going on here?

Well, as far as I know Lightning Source, the printing company used by most publishers, does charge a $14.00 a year fee, and while a number of publishers have a clause in their contracts enabling them to recoup that fee, they may have chosen not to enforce it  up until now to avoid alienating their customers (VBW, for instance, has such a clause). What I suspect may be happening here is that some of these publishers have reached a tipping point where they can no longer afford to absorb this loss. $14.00 may not look like much on its own, but for a publisher that has one thousand titles in its catalog that would translate into a yearly expense of $14,000.00. The fact that some publishers may have decided to start passing this fee on to their authors may not be a pleasant development, but it is an understandable one. On the other hand a $50.00 fee (that one was reported for Aventine Press) is excessive no matter how you look at it, and to me it hints at desperation. That one makes me think of a company that used to rely on setup fees rather than book sales for its bread and butter that has suddenly found itself in a position where new authors just aren’t biting like they used to, so it has decided to go back to milk its captive audience instead. If I had to guess, I would probably chalk that particular development up to the rise of epublishing and of the  juggernaut commonly known as CreatSpace, two developments that have made it very difficult for the little guys to compete.

The thing is that I see the advent of these fees as a sign of a shift in the industry, one that I suspect will see a number of small publishers going out of business over the course of the next few years. That may not be a bad thing (if the scam is no longer working like it used to, maybe some of the scammers will decide to cut their losses and run, leaving us with a cleaner field), but it does mean that betting on a small publisher may come back to bite you if that publisher winds up being among the ones that go belly up.

As for the fees themselves: I would describe a fee of up to $15.00 as a legitimate operating expense (for the print version, there is no reason it should apply to ebooks), but the higher above that threshold the fee is, the more troubling it becomes… and if you are looking for a publisher, and you don’t want to go the DIY route, my advise remains the same it has always been: look for a publisher that offers a full service package where your setup fee doesn’t exceed the royalties you would get for external sales of two or three hundred copies, make sure the contract is non-exclusive, that it has a nice termination clause, and that the rights revert to you should they go out of business, otherwise you may wind up losing a lot more than your setup fee if the company does go under.

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2 thoughts on “The attack of the renewal fees”

  1. I have been talking with Mill City Press and their annual distribution fees are $79 for ebooks, $179 for print, and $349 for expanded distribution, a lot for a small nonprofit with a local history book! We’re looking for a POD publisher with formatting/layout services but no annual fees.

    1. That’s crazy. I don’t know how complex your layout is, but under those circumstances I would probably suggest that you hire someone to take care of the layout, and go the CreateSpace route instead

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