17 December 2008


This entry is not mere link sausages, so it won't look like it. There is an underlying theme: These items are each most significant for the hidden 7/8ths of the iceberg.

First up, we have the initial note that Borders and HarperStudio have agreed to end returns. Given my disdain for the returns system in publishing — which makes it substantially more difficult for everyone to predict sales, and thereby predict what a "good" deal might look like, and impossible for everyone except the publisher to know what actual sales have been — you'd think that I'd be jumping for joy. Getting up out of my chair and giving a half-hearted "hooray" is closer to reality, though; the rest of the iceberg is hiding underneath this passage buried in the middle of another article on the same topic:

[T]he nation's second-largest bookstore chain by revenue will get a deeper discount on initial orders of books published by the new imprint of News Corp.'s HarperCollins Publishers — 58% to 63% off the cover price, instead of the usual 48%. In exchange, Borders won't return any unsold books to HarperStudio, instead probably discounting them in the store.

Jason Boog, "HarperStudio Publisher Bob Miller on Book Returns," GalleyCat (16 Dec 2008) (quoting an article behind the WSJ's paywall... which is particularly ironic, given that HarperStudio and the WSJ now have common ownership). That iceberg is a term buried in virtually all publishing contracts written since the mid-1980s, particularly including those of at least five Harper imprints that I reviewed at random from my files last night: The deep-discount clause.

Under the deep-discount clause, an author's royalty rate gets cut in half on books sold at a deep discount. Typical Harper boilerplate defines a deep discount as one of more than 50% off of the retail price; one boilerplate clause set the level at more than 55% off of retail price. The iceberg, though, is that the sales as described in that WSJ article would move from standard royalties to half royalties. Thus, it's time for a little bit of math. Let's assume a fairly standard trade paperback original, cover-priced at $20.00 to make the math a little bit clearer (that's about $2 more than typical at present, but that difference won't last long...), and an actual discount in the middle of the quoted range.

  Returnable Non-returnable
Discount from retail 48% 60%
Payment to publisher $10.40   $8.00  
Royalty to author
(base rate of 10%)
$ 2.00   $1.00  
Publisher's net after
paying author
$ 8.40   $7.00  
Copies sold to earn out
$5,000 advance
2,500   5,000  

Do I really have to go into the implications here? And do I really need to ask whether the publishers will continue to hold a reserve against returns?

Next up, another fight over when and how content middlecreatures are going to get paid, and for what — this time, from the film industry. The ignoramuses at Variety note that the Watchmen trial has been delayed again. As usual, though, they aren't paying attention to anything; this was clearly done by a smart judge who knows how to make parties settle. The article notes in passing that the judge denied summary judgment to both sides, and delayed the trial to 20 January — only six weeks before the film's anticipated premiere on 06 March. The article doesn't even come close to saying what this means, though.

  • The article neglects to note that Fox's primary request for a remedy has been injunctive. The judge subtly made this almost impossible, because one of the things he will be required to do is balance the irreparable harms of granting the injunction against the irreparable harms of not granting the injunction. The closer his decision is to the actual release date, the more the irreparable harms of granting the injunction will weigh against granting it no matter how strong Fox's case may turn out to be.
  • And speaking of which, Fox's case has just been smacked upside the head with a 2x4. It's extremely rare for a breach-of-contract case that allegedly relies solely upon the meaning of contract language to go beyond summary judgment to an actual contested hearing (in this instance, I believe that only a bench trial has been requested). This is quite unfavorable for the party claiming breach, at least statistically. In this particular context, it is extremely unfavorable for Fox, because it means that there remains substantial question on the very admissibility of some of the documents that it is relying upon.

No matter who "wins" this matter, in the end it will be decided by the exchange of cash... the easiest kind of solution for a judge to administer. Like I said, this judge is cleverly using his procedural powers and the mere passage of time to get this monstrosity off of his docket.

Finally, there's a very wrongheaded article in The New Yorker that tries to compare teachers to quarterbacks, but fumbles. Hiring when you can't really predict success is a significant problem. The initial datasets compared in the article, though, demonstrate why the article's narrative is so fundamentally flawed. One set of examples concerns the middle 2σ (teachers and "average" class performance), while the other set concerns the >+2σ elite performers; these are noncomparable datasets, and begs the question of how one selects teachers for the >+2σ group — the group comparable to NFL quarterbacks. Of course, the flip side of this is two underlying assumptions in the article. First, it assumes that the same subset of "teaching skill" (and, for that matter, indicators of "teaching skill") applies to both the middle 2σ and the >+2σ (or, for that matter, <-2σ) populations of students... who, because of their small numbers and other mathematical consequences of measuring by relative performance, do not substantially affect a class's performance median. Second, it assumes that a teacher's individual capability really is independent of other factors, like whether the building in question has heat and air conditioning for the classrooms, whether each student has his/her own current textbook, and just how many students have had enough to eat before the performance event. The irony that this article in The New Yorker ignores the effects on elites in the classroom — from a snooty magazine that celebrates a peculiar New Yorkish brand of elitism — is particularly delicious for those of us who like our chocolate bitter... and who pay any attention to the background and perspective of pontificating popularists.