MetaComet President David Marlin was recently a guest on the Booksmarts Podcast where he discussed Royalty Management and Company Security with host Joshua Tallent. Joshua is an acclaimed teacher and guide on the role of data in publishing, and a vocal advocate for high quality book metadata. He serves as the Director of Sales and Education at Firebrand Technologies (www.firebrandtech.com), where his focus is on helping publishers of all sizes learn about, and find solutions to, their workflow and metadata problems.
Please find Part 1 of the transcript below:
In this episode of the BookSmarts Podcast, I’m talking with David Marlin, who is the President of MetaComet, a company that specializes in royalty automation. David’s been involved in publishing for about 24 years, and he and I have known each other for a very long time.
Let’s start with your history. How did you get involved in royalty management specifically, and what was that path in the publishing world?
It was an interesting path. I was doing marketing at American Express in downtown Manhattan. While a great experience and a place full of great people, it wasn’t quite the right fit for me. I had an opportunity to do some independent consulting. I had been a programmer in my previous life so I was able to build up this stable of clients in the publishing industry doing custom programming type work, fixing other software that they had, or creating some little software tools that they might have needed. I started this back in early ’98 and one of my clients, Richard Curtis from E-Reads approached me and said, can you put together a spreadsheet to help me do royalties? Because he was, as some of you may know, one of the very early pioneers in the e-book world. He had this amazing insight to go grab the digital rights for his hundreds of clients and all their works, some really classic works. He had to start dealing with royalties, so he approached me and I studied the problem and realized this is way beyond what you can do in a spreadsheet. So, he commissioned me to develop the first version of royalty tracker, and that’s how it started. And then, he and I actually co-founded MetaComet Systems together with the goal of reselling this to other e-book publishers. We were both convinced that e-books were going to explode. And of course, e-books did nothing of the sort for the next six or seven years until Amazon came out with the Kindle. It was 2007 when it really started to take off. We quickly realized that we had to start attracting traditional publishers, as well as e-book publishers. And that’s how I got started.
How did you make the connections into publishing in the first place? You were working at American Express? It’s not a publishing industry kind of thing. Did you have friends in the industry? Or was it just a random connection?
Actually my now brother-in-law, Peter Grand, was the one who introduced me to this. He had two excellent tools that were widely used in the publishing industry. One was a publicity tool called Publicity Assistant, and the other was a literary agent tool. Each instance of this tool installed with each client was a little unique and customized. He had more work than he could handle. When I told him I was thinking of leaving American Express, he’s like, well, you’re a programmer, why don’t I start sending you to some of these clients. And that’s how I got into it. He wasn’t my brother-in-law at that point, but he is now. One of the most important things I learned from Peter was the value of customer service. You need to put yourself in the customer’s shoes, and treat them like you’d want to be treated.
Haha, he made it into the family! Ok, so you’ve been around for a long time, obviously. And Royalty Tracker is, in my opinion, the leader in how royalties are tracked and managed by publishers. Tell me a little bit about what you see, since you’ve been doing this for a long time, and you’re on the BISG Rights Committee, or co-founded that committee at the BISG. You’ve seen a lot of trends and a lot of things that have changed over the years. You talked about e-books and the changes that happened there in the mid-2000s. What are you seeing as trends right now and where do you think royalty tracking is headed in the next couple of years, or in the near future?
It’s a really interesting question. There’s a few trends that we’ve been noticing that I think will continue. One of the biggest ones is the movement to electronic payments and electronic payment platforms. Interestingly, the payment piece of royalties can be pretty complex, and it has a lot of security issues. If you’re going to pay an author electronically, you’ve got to get their banking information, and that’s very sensitive information. You should not be transmitting that via email which is how most people do it. But email is not secure. We’re seeing publishers start to move towards these payment platforms. We partner with a company called Tipalti, for instance, for payment automation and it’s a really neat platform. Rather than managing the payments internally, we’re seeing them being managed by these third-party payment providers.
We’re also seeing that because royalties really sit in the finance realm of publishers, some other related services pop up for taxes, for instance. All these major providers, like ERP systems, have pretty much gotten out of the 1099 and other tax form game. So, there are a lot of providers popping up to do that. But mainly, it’s the outsourcing of the payments, or using these payment automation platforms.
Another trend that we’re seeing that is a little more limited, but we are starting to see this increase amongst smaller independent publishers, is more sharing of the risk with the authors. You hear the word hybrid-publishing, and that’s a very broad category, but I think generally, it falls into this idea where the publishers and the authors are taking on more of a shared risk. And there’s really a whole continuum of hybrid-publishing where you’ve got on the one extreme the author paying for everything. And then on the other extreme, you have the publisher paying for most things, but deducting some of their costs before they calculate royalties and paying a higher royalty percentage. Basically, deducting some marketing costs, and distribution costs, maybe some production costs, some editorial costs, and then paying a royalty after that. They’re paying a higher percentage of royalty. So, by sharing the risk, they’re paying the authors a higher royalty.
And then on the other extreme, you’ve got the authors paying for pretty much everything, and that’s been around for a while. And there can be a little bit of controversy around that, although we’ve only heard positive things about the publishers we work with. We are seeing more of this shared risk taking. Publishing a book is a risky endeavor, you’re investing a lot in it, and you don’t know for sure how it’s going to pan out. So that’s another trend that we’re seeing.
And I think a third trend that we’re seeing… It was back in 2016 or 2017 when we launched AuthorPortal.com. which was an online portal for authors. We always had some uptake on that, but it seems like a much higher percentage of publishers now want to provide online royalty statements to their authors. So, we’re seeing that trend as well.
Stayed tuned for Part 2 of the Booksmarts Podcast coming soon!
A link to the original podcast can be found here.