June 4, 2019
Hello from Elizabeth, Anne, and Lynn.
We acknowledge Dreamspinner Press’s cash-flow challenge in finishing payments for 1Q2019 royalties and pending contractor invoices is causing a great deal of concern in the community. We’re continuing to make payments every day, albeit at a slower rate than we’d estimated. We hoped announcing goals would help authors gauge the situation. Unfortunately, not meeting the stated goal of May 15 only has heightened that concern, and we can only apologize and keep processing payments. We are taking steps to rectify the cash-flow crunch, and all payments will be fulfilled. Any payments made post-May 21 include interest calculated at 28% APR.
OVERALL FINANCIAL STATEMENT
Setting the cash-flow challenge aside, the overall financial health of Dreamspinner Press’s ledger is positive. We have, like all businesses, sometimes overextended investment or made mistakes. Our primary misjudgment was underestimating funds needed for short-term operations while we invested in products to build our authors’ future. The products include audio, translations, and larger print runs. Before this crunch cut into our current operating budget, average income quarter-to-quarter more than covered budgeted costs. That supported making the outlays for products needed to create and support the growth and transition of the company into new markets.
As we previously stated, one element affecting cash flow is waiting on vendor payments, a portion of which are overdue to us. Based on invoices for the next twelve months, the company is expecting reported income of $900,000. To bridge the challenge, we continue to pursue short-term solutions that will not affect overall forward financial progress. We can’t guarantee the challenges will be alleviated immediately, and we are aware of and sensitive to the impact those payments have on people’s lives.
SPECIFIC POINTS OF COMPANY TRANSITION
Many authors have requested specific information about our goals for the next year. We are committed to focusing on quality over quantity, fewer overall titles with a broader market to increase exposure. This includes:
- more paperback formats and sales venues through our distributor, Independent Publishers Group, to tap a mainstream market that is just beginning to discover gay romance and LGBTQ fiction and is craving diversity in its characters.
- library markets in which audiobook sales are extremely popular. Our distributor gives us a direct channel into those markets not available through ACX and Audible.
- the robust translations market. From 2017 to 2018, French translations market income rose 416%. German market translations income rose 828%. Growth in foreign sublicense purchasing clearly illustrates increasing demand for our products internationally.
Authors will see effects including:
- a hybrid publisher with a balance between the best of independent publishing and a traditional publishing model. We anticipate longer lead times from submission to publication to support distribution, marketing, and sales of an expanded and targeted package of products in simultaneous release.
- stronger focus on expanded product and format production as opposed to focusing strictly on trade and digital formats
- a tighter budget, as all those products require initial outlay of funds as opposed to print on demand or direct digital purchases
- a changing focus on events to best showcase our titles for bookstore and library acquisitions
We are grateful for the expressions of support we have received. We have listened to every author who emailed us directly over the past weeks and recognize that some authors are not interested in our current direction of growth. We respect that every author has their own path and that authors need to look out for their own business interests and income. If you are interested in participating in Dreamspinner’s goals, we hope you will consider partnering with us. If you are not, we will process the release of your rights in a manner that will allow you to pursue alternative avenues of publishing. Contact us at email@example.com to discuss your options. We will make every effort to process returns as quickly and smoothly as possible.
It is Dreamspinner’s goal and intention to continue to operate a thriving and growing publishing company. We are committed to moving forward with promotions and exposure for books we represent and the authors publishing with us.
Until this situation has been completely resolved, we will issue an update every Tuesday.
Elizabeth North, Chief Executive Officer, firstname.lastname@example.org
Anne Regan, Chief Operations Officer, email@example.com
Lynn West, Publisher and Chief Development Officer, firstname.lastname@example.org