"Head First" Book Series: Publishing Royalties & More

Earn from two separate revenue streams generated by the long-standing and best-selling Head First instructional book franchise.

$565,000

closing price

Auction Closed

Top Bid: MUSIC ROYALTIES INC I

Historic royalty income is no indication of future royalty income. Future royalty income is dependent upon future sales and licensing revenue generated by the sound recordings or compositions associated with this listing.

Starting Price: $535,000
Bidding Increment: $5,000
Closing Price: $565,000
End Date: Dec 20, 2021, 3:03 PM MST
Last 12 Months' Royalties: $103,333
Investment Term: Life of author + 70 years
Distributors:

O'Reilly Media & Studio B

Rights Included:

Book Publishing Royalties

Interests Included:

Author (World)

Track List:

Included Titles

First Distribution (paid 30 days from receipt): January 31, 2022
Distribution Frequency:

Monthly

Buyer Fees:

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Description

This is an opportunity to collect two different revenue streams paid on a monthly basis generated by the Head First instructional book series. 

The first income stream includes the author’s share of book publishing royalties from select Head First books (including future editions), which are derived from online access, hardcopy, e-Book, foreign subsidiary translations, merchandise, and other licensing income.  

The second revenue source, known as a “series override” royalty, entitles the winning bidder to a portion of the revenue generated by sales of all current and future books in the Head First series.

The first book of the franchise — Head First Java — was written by Bert Bates and Kathy Sierra in 2003. Head First Java quickly became the best-selling Java programming book on the market — and for the last 18 years, has remained one of the top-selling Java programming books on Amazon. In fact, two of the included books — Head First Java and Head First Design Patterns are currently ranked No. 1 and No 3 on Amazon’s Best Sellers in Java Programming list

As a result of Head First Java’s success, the publisher (O’Reilly Media) launched the Head First brand with titles focused on programming, coding, software development/engineering, as well as math, science, and business topics. In publication today, there are 37 titles in the series. The method of learning is unorthodox but highly effective, and is typically visually intensive with puzzles, jokes, and unique layouts. 

The Head First series is a leader in the instructional book market and many of its titles are the top-selling book in their topic. Click here to review all the titles/topics in the franchise. Additionally, Head First has received many accolades over the years, with notable recognition coming in 2005, 2006, and 2008 from the Jolt Awards

FINANCIAL HIGHLIGHTS:

The two included income streams are paid by two payors: O’Reilly Media pays the book publishing royalties while Studio B disburses the “series override” royalties. 

Looking at the O’Reilly publishing royalties, the top-producing book in the last 12 months is Head First Design Patterns, 2nd Edition (released in 2020) with 38% of returns. Right behind is Head First Java, 2nd Edition with 30% of royalties — that is noteworthy as the second edition of the book was released in 2005! 

It’s no surprise the highest-earning format is “book” (paperback/hardback) with 39% of royalties, followed by online access with 20%.

For the Studio B "series override" royalties, monthly payments have averaged $2,500/month over the last 12 months. What’s unique about this income stream is that it will earn royalties on future book releases under the Head First franchise. This provides an opportunity to continue to earn as the series expands its instructional subjects and user base.

ASSET HIGHLIGHTS:

The O’Reilly book publishing royalty stream earns from 14 Head First titles dating back to 2003. Earnings for these books include: online access, hardcopy, e-Book, foreign subsidiary translations, merchandise, and other licensing income and are paid monthly. The included books’ subjects all revolve around computer programming and software development/design. 

The Head First series releases updated editions of their books as necessary to reflect current trends and concepts in the subject matter. The seller has authored portions of each book included in the O’Reilly royalty data and earns a royalty every time a book is sold or licensed. 

It’s important to note that although the winner of this auction will be entitled to royalties for any updated editions of these books, when new editions are released the author’s proportionate contribution to the new edition may be reduced, which would result in a smaller share of the revenue. 

For example, Head First Design Patterns, 1st Edition was originally published in 2004, with the author receiving a 7% royalty rate. In 2020, the second edition of Head First Design Patterns was published with the author receiving a 4% royalty rate. This was due to new/updated material being added to the previous edition’s content. Therefore, the author’s overall contribution to the total book was reduced, meaning a lower royalty rate for the new edition. It’s also worth noting that the first edition of the book was in publication for nearly 16 years before a new edition was released. 

What's compelling is that O'Reilly plans to publish new editions of Head First Java and Head First Git sometime in 2022. As the winning bidder, you'll be entitled to royalties generated by those new releases.

Turning our attention to the Studio B royalty stream, these earnings are derived from a “series override” license of the Head First book franchise. This means that any time a book is published using the Head First branding, the winning bidder will receive a portion of the sale proceeds for the title. This applies to all past, current, and future editions! These earnings are calculated and paid monthly by Studio B.

Key Drivers

Monthly Payments. Earnings are calculated and paid on a monthly basis from each source: O’Reilly Media and Studio B. Not many income streams pay on a monthly frequency, so that is something noteworthy to prospective investors.

Diversified Income Streams. While updated editions of the books authored by the seller may result in a lower share of earnings on those updated editions (reflected in the O’Reilly royalties), the share of the "series override" royalties (the Studio B royalties) will remain unchanged and payable on each new book released in the Head First series, regardless of whether or how much the author contributes to each book.

WHAT IS BEING SOLD?
The seller’s interest in all publishing royalties attributable to sales and licensing of the books listed in Track List above as well as the seller’s proportionate interest in publishing royalties for all future updated editions of each book, if any.

A portion of the seller’s interest in “series override” royalties, which are derived from the sale of each book in the Head First series. The winner of this auction will be entitled to royalty payments in connection with all past, current, and future books in the Head First series.

About the Royalty Distributor

O'Reilly Media: O'Reilly Media is an American learning company established by Tim O'Reilly that publishes books, produces tech conferences, and provides an online learning platform.

Studio B: Founded in 1995 by Sherry and David Rogelberg, Studio B has been helping companies like IBM, Intel, Oracle, CBSi, Microsoft, First Data, Pearson, Wiley, and O’Reilly create and deliver great content as well as marketing and training solutions. 

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