Royalties, Oh Royalties, Wherefore Art My Royalties?

“It is our hope that Hachette, in light of the loyalty its authors have shown throughout this debacle, takes this opportunity to revisit its standard e-book royalty rate of 25 percent of the publisher’s net profits.” Roxana Robinson, president of the Authors Guild

So here we are. Hachette has a deal. Simon & Schuster has a deal. They have the pricing responsibility they wanted. Amazon has its “specific financial incentives” to compel them to use that power to price lower. Now we’ll get to see just how badly publishers want to institute a price-based windowing system for new releases (I’m setting the over/under on new release ebook prices at $16.99. And I’m taking the over.) But what did writers get out of this? I’m glad you (rhetorically) asked, because nobody else seems to be.

I’ve read all the coverage I can find and, as far as I can tell, the sum total of what writers got from this is that Hachette writers will have preorders reinstated and be back on two-day shipping. That’s about it. Oh yeah, there’s all the sales they lost during the past seven months. They’ve got that, too. There’s no Macmillan-like pool of recompense for those folks; no extra royalty payout for the damage done to their business. And they’ve got the hit yet to come from all those lost sales when their next contract rolls around. But at least, like the Robinson quote above, they’ve got hope that possibly Hachette (and others) maybe might take some time to reconsider their ebook royalty rates, if it’s not too much trouble. Because loyalty. My dog is loyal, but if I screw with his food, he bares his teeth and growls. I don’t screw with his food. Loyalty unrespected is subservience.

The blatantly obvious here is that anyone who thought writers would get anything but screwed on this was deluded. Especially after their authors interjected themselves into it in, bluntly, the stupidest possible way. They threw all their weight behind one side, not coincidentally, the side that needed them and they had leverage with, and asked nothing in return. Now we’re told they did it out of loyalty as if that’s some kind of honorable thing and not horribly misplaced naivete. Now we’re told authors are going to try to get better terms. My thoughts on that strategy were summed up nicely:

“What opportunity would that be? The one where they’ve settled up with Amazon, already have you all under contract at that standard, and don’t need to name-drop you morons in an obviously coordinated PR assault on a rival anymore? The opportunity to do a hell of a lot more than “hope they revisit the standard” was the past seven months when Amazon had Hachette over a barrel and the other publishers were all worried they were next.”

But don’t take my word for it. Let’s see what some publishing executives have to say:

“Speaking at a Society of Authors (SoA) panel on hybrid authors, Little, Brown CEO Ursula Mackenzie defended publishers from criticism by audience members that they now only take on books that will make money.

“Every book can’t make money,” she said. “There are careers we support for years…there are many books we publish lovingly where we don’t make money.”

Mackenzie said that publishers “are not taking a disproportionate part of the profit”, and that “no one benefits if publishers go out of business.” Little, Brown has a “fair rate for our e-books,” Mackenzie said.”

Good luck parsing the logic out of that one. “We publish lots of stuff that doesn’t make money, so we can’t pay you fairly for the things that do or we’d go out of business.”

That’s a helluva sales pitch. So even if I’m succesful, I’ll still be underpaid? Where do I sign up?!? This is the ultimate conclusion of the cultural enrichment argument. They’re not regular businesses, they’re a public good. So you can’t expect to be paid like a regular business. The company has to reap most of the proceeds so they can continue to underpay you to pay for all the stuff they produce that nobody wants. It’s all bullshit, of course, and pretty blatantly so. These are all huge, multi-billion-dollar publicly traded corporations. Do you think they’re shareholders are down with pissing money away in business-threatening chunks for culture’s sake? Or are they simply feeding you a line they know plays to your sensibilities to justify squeezing suppliers (you) to maximize profits?

Think about that last part for a minute. Just the idea of paying a better royalty rate caused her to pull the going out of business card. If you can’t even consider paying me a fair (or even just slightly higher) ebook royalty without it triggering fears of going under, does that make you more or less attractive to me as an author? You’re leveraged so thinly that fair recompense to writers can threaten the very existence of your company? What’s the upside for me to sign with you? A “quality” product no one buys or a product they do buy but I don’t reap fair reward for?

Now, of course, she claims to think their ebook royalty is fair, which is the problem. I don’t really believe she thinks that but enough of you do that they can continue to get away with pushing this nonsense. Here’s another:

“Questioned on author earnings, CEO Tom Weldon said that Penguin/Random House was always looking at how much authors were being compensated, but for the moment the 25% digital royalty rate would not be changed.

“Authors are, alongside readers, the foundation of our business,” he said. “We are always, always looking at our commercial arrangements with authors to make sure they’re fair and equitable. With e-book royalties, firstly and most importantly, the business model is as clear as mud. Rather than arguing about what slice of the cake we should distribute, we need to work out how big the cake should be.”

There you go, fair and equitable and the rate would not be changed. Get a load of that last sentence. We need to work out how big the cake should be? What the hell does that even mean? Is he talking about pricing? Is it a more ominous suggestion of further attempts at limiting the ebook market itself to a certain market share? Or even more ominously, is he talking not about how big the whole cake is but deciding how big the portion of the cake is that your portion comes from? The cake is a pretty big one, dude, I think portions are an appropriate topic of discussion at the moment. Look at how he phrased that, too: “Rather than arguing about what slice of the cake we should distribute…” They’re planning on keeping the whole damn cake and then deciding what tiny sliver they can afford to slice off for you. Do you need any more evidence that they see the proceeds from your book as “their cake”? Funny how they’re not waiting to work out how big the cake should be before touting the increased profits they’re reaping from this particular literary confection. But let’s not argue about it. Then they might actually have to address the issue rather than keep enjoying all that delicious extra cake they’ve got. Did you catch him wiping the crumbs from the corner of his mouth as he said “fair and equitable”?

Even the Author Guild itself admits the publishers have no will to even consider making a change in ebook royalty rate:

“Jean Craighead George’s original decision to publish an e-book edition (of Julie of the Wolves) with Open Road (which pays a 50% e-book royalty)—rather than with HarperCollins, her longtime publisher—was a principled rebuke of the major publisher’s measly 25% net e-book royalty. HarperCollins’s aggressive strategy (the publisher spent over $1.5 million to litigate a case that ended up being worth only $30,000) illustrates the importance to publishers of keeping e-book royalty rates at 25%.”

So if you already know this, please explain why you failed to do even the slightest bit of advocacy during the past year when the Big 5 in general, and Hachette specifically, were more vulnerable than they’ve been maybe in all of our lifetimes? You think it was a good idea to show unbridled loyalty to companies who, by your own admission, are being miserly with ebook royalties and intentionally underpaying your membership? Something you’ve been complaining about since, at least, 2009? That’s five years of talk with zero tangible results. Loyalty is a positive thing in some cases, but in this one, it’s high past time to bare your teeth. The question increasingly being asked, and rightly so, is does the Authors Guild have any teeth to bare? Instead of falling lockstep in line with the publishers, why didn’t you take advantage of this opportunity to make some progress? That’s what real advocacy is. What you’re doing is no different than what I do, talking. Only I’m not collecting dues or pretending I’m representing anyone’s interests.

Speaking of the blind leading the blind, here’s the Authors Guild meeting with members of Congress ahead of an upcoming review of copyright law:

“Executive Director of the Authors Guild, Mary Rasenberger’s speech was part of a panel co-hosted by the Authors Guild and aimed at giving the Congressional group a behind-the-scenes look at “a book’s passage from manuscript to marketplace.” The panel consisted of authors, editors, and publishers.

In her speech, Rasenberger focused on the “urgent state” of authorship today. “Even authors who made a living writing books for decades now need to find alternative sources of income,” she told the assembly. “This means they write less—and, in some cases, not at all. Fewer professional authors means fewer types of books that might take years of research and writing. These are precisely the kinds of books that further the knowledge and learning that copyright is meant to foster.”

Do you think her presentation of “manuscript to marketplace” included even a word about indies who skip the publisher involvement altogether? I don’t either. I’m certain it was a glowing testament to how essential publishers are, with writers and editors simply add-ons to the process, shepherded by their greatness. Maybe the urgent state of authorship wouldn’t be so urgent if authors had effective advocates. Maybe there wouldn’t be so many authors needing outside income streams if you did something about low royalties other than hope and talk. Don’t miss the loaded use of the term “professional” in there either. Who does this woman represent? They’ve done nothing about the royalty rate, they are dismissive of indies in presentation and implication if not in direct language. And they just came to heel when the publishers blew their dog whistles over the past few months, a time when they actually had some leverage to get something done. Amazon was practically begging them to do something. Is it any wonder publishers think they have you all locked down?

The question I’m asking is can authors get some real representation at these things? The only seat at the table we get is through groups like the Authors Guild, and sometimes that’s even less useful than having no seat at all. So what were they talking about at this congressional get together other than how crucial publishers are? Here’s the release from the committee:

“Great books, both fiction and non, have an incredible ability to capture our hearts and minds, taking us to another place or time with words on a page. Yet many of us do not think about the hard work and collaboration that goes on between authors, publishers, and many others to help take a book from manuscript to marketplace,” said Reps. Judy Chu and Howard Coble, co-chairs of the Creative Rights Council. “Together, this collaboration is at the heart of a $27.2 billion industry, but challenges like digital first sale, unreasonable expansion of fair use, and online piracy are threatening the livelihoods of the hard working men and women who bring these works to life. We are proud to have hosted this important panel in order to influence the conversation on copyright law as we continue moving forward.”

Notice authors is mentioned only once, in the context of the collaboration. Is it authors’ livelihoods they feel are threatened, because, as everyone should have already been expressly aware, the vast majority of traditional authors don’t have livelihoods from their work to be threatened. And that is in no way a recent development, rather a consequence of the industry’s very structure. So get ready for copyright law as publisher bailout (none of the benefits of which will even trickle down to the writers), coming soon to a congressional hearing near you.

It’s telling that both first sale and fair use were specifically cited as “threats”. Is this how the Authors Guild presented them? What exactly does Rasenberger mean by what “copyright is meant to foster”? First sale and fair use are both consumer rights granted by copyright (yes, consumers have rights under copyright law, too. Although maybe not for much longer if these folks are any indication.) How about we discuss life+70 that flies directly in the face of what copyright intended as a limited time of exclusivity for creators. It exists not for the benefit of creators, but of transferees (not mentioned there, by the way) so they can continue to profit from creators’ works for generations after their death. Or how about the fact that this standard has basically caused the public domain of recent material to wither and die (another element copyright law intended to be vibrant and available for both creators and the public).

But, alas, no. The “threats” here are like they are every time copyright comes up; the rights of consumers are given short shrift, if acknowledged at all, and the rights of creators are subverted, in direct opposition of what was intended, to protect corporate licensees’ profits. If you want to have a frank and open discussion of copyright law, let’s do it. But can we get someone other than the Authors Guild at the table please? I have no faith they’re even on the right side of these issues for authors and won’t simply fall lockstep in with publishers when push comes to shove (again). I’m sure they’ll talk a good game but when it comes time to pick a side to support, they’ll be right there with the publishers, no matter how much more ground creators and the public have to give up so Disney can continue milking Mickey Mouse in perpetuity.

Maybe I’m wrong. Maybe I’m being too harsh. Maybe the Authors Guild, once it sinks in that their loyalty has gotten them squat, will finally break out the snarl and get down to the real business of business and stop validating the publishers’ “enriching themselves while underpaying writers is essential to culture” argument. And maybe pigs will fly.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

The URI to TrackBack this entry is:

RSS feed for comments on this post.

14 CommentsLeave a comment

  1. Reblogged this on My WordPress Notepad and commented:
    While Amazon provided a better platform for distribution of an author’s work starting in 2007, they and all of the publishers (like Hachette) are in this for one thing … profit. Authors are a necessary component of the process that generates that profit, but to think that Amazon (or any publisher for that matter) is “pro-author” in any way, shape or form is ludicrous.
    The bottom line is, the minute any publisher finds a way that the author can be replaced at a lower cost and more profit for that publisher (or Amazon) … it will be done. Authors are expendable, period.
    That said, Amazon is currently the easiest distribution channel to access for a authors, in some ways (and somewhat profitable).

    The rest is in Dan’s excellent post…

  2. Like almost all big diversified corporations, the Big Five are run primarily for the benefit the top executives who control them. Shareholders for the most part are simply speculating on management’s ability to increase share prices, by whatever tricks they can. The executives’ priorities can be seen in the way that they structure their financial incentives: heavily weighted toward near-term share price increases. Many no doubt chose publishing in the first place out a genuine interest in books, but that’s long since been pushed to the background by ambition and greed. Authors do well to put aside any expectations of fairness or consideration from them. They insist on “loyalty,” but really mean supine subservience.
    While Bezos too is consumed by ambition and greed he’s also creative and an important part of his ambition is to show that he can become rich and great by out-creating others. If he didn’t feel that encouraging writers plays a part in this he would never have bought the Washington Post, let alone be putting money into strengthening its news desk. Amazon gives authors a pretty good deal and it’s simply masochistic for them to be carping about it and taking the side of the publishers.
    “Kick me again, Master, show how you love me by kicking me again!” seems to be the watchword of large segments of the author community.

  3. Reblogged this on L. Anne Carrington.

  4. Concern trolling is duly noted. The fact that traditionally published authors tend to be better off than self-published ones remains true, however. Your belief in Amazon’s good treatment of self-pubbed authors is stunning.

    • Under what standard of better off? You have some data to back that up? And when did I say anything about Amazon other than they’ve got their specific financial incentives, whatever those are? It’s not that I believe in Amazon’s “good treatment” as you put it. It’s that I believe in most publishers’, particularly the larger ones, poor treatment of authors. And I don’t at all believe in the “advocacy” skills of the Authors Guild.

    • Wow, Drive-By Deb is trolling authors’ blogs now too? Speaking of stunning, it’s stunning that someone who hates the indie publishing scene and loves tradpub is following and commenting on indie authors’ pages.

  5. Here’s what indie writers got out of this. And you should be thanking Macmillan and Apple and Hachette every day from the bottom of your heart and on your knees. Every member of AAAG, the aggregated Amazon Ankle Grabbers, should be sending rose scented garlands to the Froggies on behalf of the indies.

    Because when Apple stepped into the game, all of sudden Amazon went from 35% to you for your book sales (for a download service), a completely predatory price point, to a very high but at least a financially tolerable 70%. For at least a few countries.

    That’s how some writers were helped.

    • I don’t think I ever disputed that Apple was the impetus for Amazon going up, although I suspect it would have happened anyway at the first genuine sign of large scale competition entering the market. I mean what did we get from this little battle, which is nothing for most of us. Only Hachette authors had anything at stake and they sat on their hands and lost ground. And were cheered on to their own detriment by the people supposedly looking out for them.

      • +++ I don’t think I ever disputed that Apple was the impetus for Amazon going up, although I suspect it would have happened anyway at the first genuine sign of large scale competition entering the market. +++

        I’m sorry, but your article asked what did writers get out of this. Independent writers were able to escape from a predatory 65% downloading fee because of the entrance of a large competitor, mainly Apple.

        +++ I mean what did we get from this little battle, which is nothing for most of us.+++

        Who is “we?” Did Hugh Howey write any articles over the last 12 months pointing out that the battle over agency pricing had benefited indies? Did you? Because the last time I checked math, getting 70% is much better than getting 35%. Indies clearly benefited from the battle.

        Shouldn’t they be thanking Apple, Hachette, and the publishers?

        Did I miss the article in which you pointed this out?

        +++ Only Hachette authors had anything at stake and they sat on their hands and lost ground. +++

        What do you mean they sat on their hands? Clearly, they did no such thing. They seemed to have formed Author’s United to protest Amazon’s hardball tactics that deprecated their product listings in the AZ search engine, recommended other books, listed books as out of stock, etc.

        That doesn’t seem to be sitting on your hands.

        +++ And were cheered on to their own detriment by the people supposedly looking out for them. +++

        What does this mean? Did Hachette stop paying their author’s their royalties? Or were they hurt when Amazon started playing games with their site’s search engine?

        In the meantime, were indies supposed to cheer for Amazon when it was the publishers and Apple who were lowering the download fee from 65% to 30%?

        Rick Chapman
        Author “SaaS Entrepreneur: The Definitive Guide to Success in Your Cloud Application Business”
        Read Excerpts from all 10 chapters at
        Author “Rule-Set: A Novel of a Quantum Future.”

  6. To note, Hachette said when they rejected the offer of author compensation that the time to consider that would be after they’d come to a contract arrangement. Now that they have, I think it’s time to keep an eye on them and see if they announce one. (Remember, Amazon and Macmillan only announced their authorial compensation agreement some time after the buy button removal ended.)

    • I hope they do. I would’ve thought, given the increased visibility of this, though, they’d have made it publicly known right away. They could still be hashing out details though. Like I said, I hope so.

    • +++ To note, Hachette said when they rejected the offer of author compensation that the time to consider that would be after they’d come to a contract arrangement. +++

      Should we keep an eye on Amazon and make sure they don’t attempt to reimpose a 65% downloading fee on indies? And how about stop charging a 65% on international sales? And how about they remove that 65% predatory penalty on indie books priced above $9.99?

      Rick Chapman
      Author “SaaS Entrepreneur: The Definitive Guide to Success in Your Cloud Application Business”
      Read Excerpts from all 10 chapters at
      Author “Rule-Set: A Novel of a Quantum Future.”

  7. I commented over at PV first, but the gist of what I said was: the AG gave us the worst attempt at negotiation ever. They waited until they lost leverage, depended on the goodwill of the other party, and made themselves look pathetic in asking for a more fair share of profits.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: