Royalty Software Trends

Software Solutions

Over the past eight months we have seen large publishers focus their royalty software search on solutions from Klopotek, Publishing Technology, Real Software Systems and Virtusales. There system evaluations are focused on ease of use, processing speed and the calculation of royalties for ebook collections, ebook subscriptions and mashups of digital content.

To increase processing speed publishers are turning to more powerful hardware. Oxford University Press selected a Violin Memory 6212 Flash Memory Array, an all-silicon shared storage system with performance (up to 1 million IO/s) and ultra-low latencyflash memory hardware array to reduce proccessing time for their business systems. When looking at software publishers are looking at solutions that are designed to take advantage of multi-core processers.

Klopotek and Virtusales are also targeting small to medium sized publishers with affordable hosted solutions that can be rapidly implemented.

IBS Bookmaster launched a new .NET based royalty solution, that can be installed as a stand-alone solution or as part of the IBS Bookmaster publishing solution. We have not seen any new developments for the SAP IPM module (Intellectual Property Management) thus far this year.

Software Functionality

Publishers are looking for online author portals where  authors can access copies of their royalty statements and contracts. Metacomet launched AuthorPortal to offer this service to publishers whose royalty software solution do not include this functionality. Larger publishers; such as Random House and Simone & Schuster, are using these portals to communicate with their authors and provide them with marketing tips and tools.

In terms of royalty rules, new publishers publishers are increasingly likely to have recovery amount terms clauses in their contract. With a recover clause royalties are not accrued (calculated) until sales reach a specific dollar or quantity based level. This accelerates the recovery of pre-press expenditures for the publisher. New book contracts from established publishers are likely to include a guaranteed minimum annual royalty clause (GMAR) in lieu of the standard out of print clause. Why? With the advent of ebooks and POD (print on demand) publishers are not longer placing books out of print. The GMAR clause says that unless the publisher pays a specified minimum amount of royalties per year the author can ask for the reversion of the rights ot this title.

We are seeing an increasing demand for the digital asset management of royalty contracts. Storing scanned PDF images of contracts protects them from loss and makes them readily available to staff.

Large STM (scientific, technical and medical) publishers are looking for system that support subscription based royalties. The Safari Online Royalty Guide provides examples of how these royalties can be calculated.