Contracts

In the #MeToo Moment, Publishers Turn to Morality Clauses

4 May 2018

From Publishers Weekly:

Until recently, the term “moral turpitude” is not one that crossed the lips of too many people in book publishing. But Bill O’Reilly, Milo Yiannopoulos, Sherman Alexie, Jay Asher, and James Dashner changed all that.

A legal term that refers to behavior generally considered unacceptable in a given community, moral turpitude is something publishers rarely worried themselves about. No longer.

Major publishers are increasingly inserting language into their contracts—referred to as morality clauses—that allows them to terminate agreements in response to a broad range of behavior by authors. And agents, most of whom spoke with PW on the condition of anonymity, say the change is worrying in an industry built on a commitment to defending free speech.

“This is very much a direct response to #MeToo,” said one agent when asked about publishers’ growing insistence on morality clauses. Most sources interviewed for this article agreed with this sentiment, citing the way sexual misconduct allegations and revelations are ending careers and changing the way companies do business. But it’s not just sexual harassment charges (which embroiled bestselling authors O’Reilly, Alexie, Asher, and Dashner) that publishers are scrambling to protect themselves against. It’s also the fallout that can come from things their authors say.

The situation with Yiannopoulos highlights this. S&S’s purchase of his book Dangerous in December 2016 caused a backlash in certain circles of the industry, with some complaining that the right-wing provocateur peddled in hate speech and should not be given a platform by a major publisher.

In February 2017, after the deal received bad press and several of S&S’s authors threatened to leave it, the publisher canceled Yiannopoulos’s book. The cancelation coincided with the resurfacing of an old interview Yiannopoulos gave, in which he appeared to condone child abuse.

S&S said that it canceled Dangerous because the manuscript was not to its liking. (The language in most author contracts gives publishers quite a bit of latitude in determining what constitutes a suitable manuscript.) Some felt, however, that the publisher was looking for a reason to drop the “alt-right” bad boy. Yiannopoulos sued S&S but wound up dropping the case earlier this year.

The controversy surrounding Dangerous highlights the stakes for publishers at a moment when platforms and reputations can be built, or destroyed, with a tweet. For agents, the Yiannopoulos case underlines some of the biggest concerns about morality clauses: the threat of muzzling speech.

“The gist of it,” one agent said in reference to a clause in Penguin Random House’s boilerplate, “is that [the publisher] wants the right to cancel an author’s book anytime the author says or does something the publisher doesn’t agree with. It’s crazy.”

. . . .

 “There are obviously a lot of very complex things going on here,” he said, speaking to the way publishers are reacting to the shifting social climate. He also noted that most publishers he’s dealt with have been open to changing these clauses. “When you go back to [publishers] and remind them that authors are allowed protected speech, political or otherwise, my experience is that they’ve been very responsive.”

But the agent who called these clauses “crazy” said he felt that more nefarious possibilities lie ahead. “Once Medusa’s head is removed from the box, a whole series of events can occur,” he complained. “Maybe [the publisher] signs up three books for $1 million, and the first book doesn’t do so well, and they use this clause to get around what’s legal and fair. This is like dropping a pebble in a pond: there are a lot of ripples.”

. . . .

“There are instances where it is appropriate to cancel a contract with someone—if, say, they are writing a book on investing and they’re convicted of insider trading.” But Rasenberger has concerns about the new boilerplates she’s been seeing. “These clauses need to be very narrowly drawn. The fear is that clauses like these can quash speech that is unpopular, for whatever reason.”

Another agent admitted to being distressed by the fact that some of the morality clauses she’s seen “are going very far.” She said that though she and many of her colleagues think it’s “not unfair for a publisher to expect an author to be the same person when it publishes the book as when it bought the book,” she’s worried how extreme some of the language in these new clauses is.

“If you’re buying bunny books or Bible books, these clauses make sense,” said Lloyd Jassin, a lawyer who specializes in publishing contracts, referring to deals for children’s books and Christian books. He wondered, though, about a publisher trying to hold authors of any other type of book to a moral standard. Noting that morality clauses are about money, not morality (specifically, they’re about a publisher’s ability to market an author), he posed a hypothetical. “Is the author of The El Salvador Diet, which touts a fish-only regimen, allowed to be photographed eating at Shake Shack? That goes to the heart of the contract.” He paused and added: “This is definitely a free speech issue.”

Link to the rest at Publishers Weekly

PG is old enough to remember when morality clauses aka morals clauses were considered unacceptably puritanical.

Morality clauses are standard practice in some Texas divorces. (They may also be used in some other states, but PG has only heard about the Texas variety.)

PG understands that courts in several Texas counties automatically issue orders including morality clauses on a temporary basis when a divorce petition is filed and there are minor children. Morality clauses can also be permanent and continue after the divorce. Since a divorce court may have continuing jurisdiction over custody matters, if the custodial parent and children move out of state, a custodial parent who violates the morality clause elsewhere may be hauled back into a Texas court for enforcement purposes.

PG further understands that a typical Texas morality clause will prohibit a custodial parent from having any adult to whom the custodial parent is not married be present in the home from 10:00 pm to 7:00 am if the children are also there. Grandparents and similar relatives are permitted, but on at least on occasion, a morality clause has been enforced to prevent a lesbian lover from spending the night with a custodial parent.

On many more occasions, a “friend” of the custodial parent may walk out of the door at 9:59 pm and quietly return at 10:30 pm after the children are in bed. In the morning, when the alarm clock sounds at 6:30 am, the friend gets up, gets dressed and leaves, only to return at 7:01 am with donuts.

As might be assumed, if the non-custodial parent asks for a change of custody because the morality clause was violated, the kids are usually the principal witnesses in such litigation.

PG has not made these comments to denigrate the great state of Texas, its laws, judges or citizens. He is merely pointing out that the same types of legal provisions that might be considered hopelessly retrograde in the context of a Texas divorce are now absolutely right, proper and essential in a Manhattan publishing contract.

 

Facebook admits it did not read terms of the app that harvested data of 87 million

26 April 2018

From CNBC:

Facebook did not read the terms and services of the app that improperly shared user data with Cambridge Analytica, the company’s chief technology officer said Thursday.

“We require that people have a terms and conditions and we have an automated check there at the time — this was in 2014, maybe earlier,” Mike Schroepfer told U.K. lawmakers at a parliamentary committee hearing. “We did not read all of the terms and conditions.”

Aleksandr Kogan, a Cambridge University researcher, created an app that collected data on millions of Facebook users. Kogan’s company, Global Science Research, then shared that data with political analytics firm Cambridge Analytica.

. . . .

Kogan said on Tuesday that Facebook did not pull it up on its terms of services until after The Guardian newspaper reported early informationabout it harvesting user data.

Facebook CEO Mark Zuckerberg told U.S. lawmakers earlier this month that Kogan was “in violation” of his agreement with the platform and that this was a “big issue.” But the data scientist hit back at the company’s boss, arguing that tens of thousands of other developers were employing similar practices to his app.

Link to the rest at CNBC

PG has lost track of the number of Terms of Service, Terms and Conditions, Terms of Use, etc.,  documents he has read or reviewed or written since the lovely little contracts started popping up online over thirty years ago. Had he known where the internet would go, he would have counted.

Apples iTunes’ TOS reportedly runs to over 20,000 words.

A website called TermsFeed provides both free and “premium” terms of service you can just copy and paste into your online business’s website. It has a nice article about “I agree to” Checkboxes so you can appreciate the full range of possibilities.

PG is certain Facebook’s “automated check” is an interesting program, but PG suggests it will require the highest form of artificial intelligence to avoid being fooled by the lengthy and impossibly dense language contained in a great many TOS documents.

Unfortunately, TOS documents are legally binding – sort of, maybe, up to a point.

Legally binding or not, when people depend upon a company for a significant portion of their income (like KDP) and KDP receives the money and passes some of it through to those people, the TOU document can be rather important, particularly when the violation of its terms can stop the money flowing.

PG just checked KDP’s Terms and Conditions, which Amazon helpfully indicates were last updated in September 2016. Since he has looked at them since September, 2016, he doesn’t have to look at them. No, PG is not aware of any case involving a modification of a TOU where someone forgot to update the “date last modified” information. He is certain this mistake has occurred on at least a few occasions, however.

(Legal minutia tip – If you want to know what changes from revision to revision, save a copy somewhere on your computer that you’re not using for something more useful and do an MS Word document comparison with the prior TOU when a new TOU shows up. If you have your own website with your own TOU, keep the old ones somewhere. If you don’t, you’ll be embarrassed like the Facebook guy if anyone claims they didn’t violate the old ones and you improperly changed them.)

 

Do Romance Authors Receive Worse Treatment from Publishers Than Anyone Else?

25 April 2018

PG is trying to extricate a client from a nasty publishing contract with a large romance publisher. Both the client and the publisher shall remain nameless.

PG is frustrated. The client is frustrated.

PG has conducted extrications from enough publishers to have come to a conclusion.

Across the broad range of different types of books and different varieties of publishers with which PG has dealt, as a group romance publishers are the worst. Worst contracts, worst behavior, worst attitude towards writers.

A public event PG can talk about began in 2012 when a class action was filed against the company on behalf of Harlequin authors who signed book contracts with Harlequin between 1990 and 2004. The suit was filed in 2012 and settled in 2016. You can find information about the settlement of the class action at Harlequin Class Action Settlement.

The lawsuit was based on Harlequin’s practice of sublicensing e-book rights through a Swiss subsidiary, which resulted in authors receiving 3% to 4% of net profits from their works rather than the 50% Harlequin agreed to pay in its publishing contracts.

PG has previously blogged about this case. You can see prior posts, including some court documents, by Clicking Here

Basically, the story was that HQ didn’t mention ebook royalties in its publishing contracts. Those contracts included a catch-all clause which essentially said HQ could license other rights and split the proceeds on a 50/50 basis with the author. The contracts also included a provision which said if HQ licensed the other rights to an affiliated entity, the royalties paid to the author had to be equivalent to market rates for licensing those other rights to a company not affiliated with HQ.

When ebooks appeared on the scene, rather than asking its authors to sign new contracts or ebook addenda to their existing contracts, HQ decided to license ebooks to a related Swiss company for a royalty of 6% of the cover price. The Swiss company then sublicensed each book to HQ print and ebook companies to distribute, so HQ-Switzerland kept 94% of the ebook proceeds and paid 6% to HQ-SorrySucker.

Under the “other rights” clause in the publishing contract, the author would be paid 50% of the amount of the license fees received by HQ-SorrySucker. HQ-SorrySucker paid the authors 50% of 6%. Even English majors know that results in a royalty paid to the author of 3% of the cover price each ebook.

This was at a time when Amazon would license ebooks from authors under KDP for royalties of 70% of the cover price. If HQ-SorrySucker had taken the normal route taken by other publishers, HQ authors would have received royalties at the rate of 35% of the cover price.

The following is from an Amici (the plural of Amicus or Friend of Court) Brief filed in the case by Romance Writers of America and the Authors Guild:

In the spring of 2011, Amicus The Authors Guild began receiving reports from its members that their e-book royalties from Harlequin were extremely low. These members believed Harlequin was self-dealing by licensing e-book rights to one of its corporate affiliates for 6% of the cover price (i.e. suggested retail price). Because the royalty payable to the author under the “all other rights” clause is 50% of the amount received by the publisher, a 6% royalty to the publisher results in a royalty to the author of only 3% of the cover price – far below the customary range for sales in secondary media. The Authors Guild contacted Harlequin to voice these concerns and to request a copy of Harlequin’s inter-affiliate license agreement. Harlequin declined to provide the document on the ground that it was proprietary.

During the same timeframe, Amicus RWA was also in communication with Harlequin regarding e-book royalty issues. Harlequin  provided to its authors, RWA, and other industry participants the following explanation of Harlequin’s inter-affiliate licensing practice:

Our authors contract with Harlequin Books SA (“HBSA”), our related Swiss company.  HBSA licenses  the right to publish an author’s work in print and digital to our operating companies and to third-party publishers, which then bring books to market in their country (incurring costs of translation, production, distribution, marketing, branding, etc.). In return, HBSA receives a license fee.

The NAR [net amount received by the Publisher] is the license fee. For editions where the author is to be paid 50% of NAR, the author’s royalty is therefore 50% of the license fee received by HBSA. The license fees are expressed as a percentage of cover price. Historically they ranged from 6% to 8%. The author’s 50% share of that fee would then equal 3% to 4% of the cover  price.

As noted, the publishing contracts at issue require that in any affiliate licensing arrangement the “Publisher” must receive license proceeds that are “equivalent to the amount reasonably obtainable by Publisher from an Unrelated Licensee for the license or sale of the said rights.” Based on their considerable reservoirs of knowledge and industry data sources regarding royalty rates in the publishing industry, the Amici confidently represent  to this Court  that  the  6% to 8% royalty that Harlequin Enterprises elects to pay to  its Swiss “Publisher” subsidiary is a small fraction of the proceeds that the “Publisher” could obtain from an unaffiliated licensee in the open market for e-books.

. . . .

Generally speaking, a book publisher makes money by exercising the rights that it has licensed from the author of a given work, through the sales of books or sub-licenses of publication rights in various sales and distribution channels.

Historically, the primary sales channel for print book publishers was through retail book stores. In the modern era of e-books, publishers sub-license their digital copyright rights to online “e-tailers.” The most well-known e-tailers of e-books are Amazon, Barnes & Noble, and Apple, but there are many others in the field.

There is no hard and fast rule or convention in the publishing industry on the royalty rates or license fees paid by e-tailers to publishers for e-books. There are, however, numerous sources ofdata on the market’s behavior. In the experience and collective knowledge of the Amici, publishers are almost universally able to extract from an e-tailer at least 50% of the cover price of an e-book. A 70% split for the publisher is quite common and can be obtained even from industry power­ houses such as Amazon and Apple.

It is clear to the Amici that if the Harlequin’s Swiss “Publisher” subsidiary operated as a normal market participant, it could readily license the new e-book versions of its backlist for license fees of 50% to 70% of the cover price of each work sold. In this scenario, the 50% royalty payable to authors under the 1990 to 2004 publishing agreements would be 25% to 35% of the cover price of each work sold. Instead, however, the Swiss “Publisher” licenses the e-books to its parent, Harlequin Enterprises, for 6% to 8% of the cover price, and the authors’ 50% royalty is thus only 3% to 4% of the cover price. From the perspective of the Amici, it appears that Harlequin Enterprises has simply siphoned off 42% to 64% of the cover price before the money reaches the Swiss “Publisher” subsidiary, so this amount will not have to be split with the authors.

PG has calmed down now, but he still wonders whether romance authors are treated worse than other authors by the publishing establishment.

PG does know Amazon loves romance authors and it shows its love by paying them money.

PG has never had a client ask him whether he thinks the author can make more money from HQ than from Amazon.

PG was not a math major, but he could probably figure out his answer to that question without a spreadsheet.

Boy Who Came Back From Heaven author sues book’s Christian publisher

13 April 2018

From The Guardian:

Alex Malarkey, the American boy who disavowed his bestselling account of meeting Jesus after an accident, has launched a lawsuit against the book’s Christian specialist publisher. While the publisher has “made millions of dollars”, the suit alleges, it has “paid Alex, a paralysed young man, nothing”.

The car accident that almost killed Malarkey happened in 2004 in Ohio, when he was six years old. Two months later he woke up from a coma to find himself paralysed from the neck down. He and his father, Kevin, a Christian therapist, wrote The Boy Who Came Back From Heaven together. According to Chicago’s Tyndale House, the firm that brought the book out in 2010, Malarkey wrote of “the angels that took him through the gates of heaven itself. Of the unearthly music that sounded just ‘terrible’ to a six-year-old. And, most amazing of all … Of meeting and talking to Jesus.”

But when he was 16, Malarkey revealed on his blog that he had made it all up. “I did not die. I did not go to heaven,” he said. “When I made the claims, I had never read the Bible. People have profited from lies, and continue to. They should read the Bible, which is enough.”

Tyndale House pulled the book, which had already sold a reported one million copies, saying in a statement that it was “saddened to learn [Alex is] now saying that he made up the story of dying and going to heaven”.

Malarkey, who is now 20, filed a lawsuit against the publisher earlier this week, claiming his father “concoct[ed] a story that, during the time Alex was in a coma, he had gone to Heaven, communicated with God the Father, Jesus, angels, and the devil, and then returned”, and alleging that while Tyndale House has “made millions of dollars off Alex’s identity and an alleged autobiographical story of his life, [it has] paid Alex, a paralysed young man, nothing”.

. . . .

“Despite the claims in Alex Malarkey’s lawsuit,” the [Tyndale House] statement continued, “Tyndale House paid all royalties that were due under the terms of our contract on his book … Tyndale took the book out of print in 2015 when Alex said that he had fabricated the entire story. Any books still available from online vendors are from third party sellers.”

Link to the rest at The Guardian

Here’s a link to the Complaint. (Corrected link now)

It appears that, while Alex was a minor, his father wrote the book and entered into the publishing contract. The book lists the authors as Alex’s father and Alex.

The publisher stopped selling the book in 2015 after Alex revealed that the events described in the book as taking place while he was in a coma never happened.

The lawsuit is claiming damages for violation of Alex’s Right of Publicity under the Illinois Right of Publicity statute claiming that the publisher’s use of Alex’s identity in the book and related materials violated Alex’s rights.

Additional counts include invasion of Alex’s privacy by giving publicity to his private life when there was no legitimate public interest because the book was false, placing Alex in a false light, intrusion on the seclusion of Alex and his private affairs, defamation, violation of Illinois’ statute prohibiting deceptive trade practices, and financial exploitation of a person with disabilities in violation of an Illinois statute.

PG says it will be interesting to see how this suit proceeds. While he’s not an expert on Illinois law, in the US, a parent is generally empowered to act on behalf of a minor child in legal matters, including entering into contracts on the child’s behalf, including contracts involving depictions of the child in books and elsewhere.

If Alex’s father was the sole author of the book, he may have had the right, as Alex’s father, to grant the publisher the right to publish a book describing Alex’s experiences or supposed experiences.

On the other hand, Alex is certainly a sympathetic plaintiff – paralyzed and living on government benefits.

 

French Law’s Principle of Strict Interpretation

4 April 2018

From The 1709 Blog:

One of the cardinal principles of French copyright law is the principle whereby any license/assignment of a copyright interest by an author is to be strictly interpreted such that any right not expressly mentioned is not granted.

. . . .

A professional photographer had licensed the rights to one of his photographs to an advertising agency for use in a real-estate promoter’s brochure and website for the price of 844 euros.

He later learned that the photograph was used, without his authorization (but with credit, such that there was no issue regarding his right of attribution) in an advertising campaign, appearing inter alia in Paris Match, the well-known magazine.

. . . .

The Court started by recalling the provisions of Section L.131-3 of the French Intellectual Property Code pursuant to which the license (or assignment) of copyright is subject to the condition that each right be distinctly mentioned and that the license (or assignment) be delineated with respect to its scope, purpose, territory and duration.

. . . .

The license relates to the illustration of a brochure and there is no express mention of a press advertisement, such that use in Paris Match goes beyond the authorization that was given.”

Link to the rest at The 1709 Blog

PG says this is a refreshing change from the creative approach some publishers employ to conjure up the inclusion of electronic rights in old publishing contracts created on Selectric typewriters.

The Publishers and the Public – a psychological drama

27 March 2018

From Kenilworth Books:

There is a great deal of social pressure in the book industry to be smiley and gushingly positive all the time – and we are, when it is appropriate. The many authors whose work we love, and the many small publishers in particular whose work adds so much to what we offer as an independent bookshop, we will support with all our strength. But every now and then someone has to find both the courage and the words to explain that something is not right (even if they are damned for it) and to try to make suggestions as to what needs to change.

. . . .

The British Book Industry has a monstrous fair-trade and exploitation issue skulking beneath the surface which is slowly suffocating everything – it needs to be dragged in to the light and be seen for what it is.

Discussion about having a fair-trading arrangement for the production and selling of books needs to be moved up a gear; we need a pricing agreement that is coupled with a covenant about the fair treatment of authors. I’ve spoken to authors and illustrators who have been told off and threatened by their publishers for commenting on, or even just for sharing our previous blogs – making all but the bravest less willing to add their experiences to the discussion, except privately. Oddly perhaps, I’ve had the same experience with publishers; half a dozen publishers, both large publishing houses and small independents have contacted me privately with words of encouragement, telling me that the pressure on them to release books to Amazon, WH Smith and the supermarkets at extremely high discounts is embarrassing, crippling to their profit margins and has been the catalyst that has changed the nature of their business and not, they feel, for the better.

. . . .

Our friends in indie bookshops across the country are heading to Parliament soon to meet and discuss the plans put forward by The Big Green Bookshop for an Alliance of Independent Bookshops. The initial proposal included a plan for indie bookshops also to secure higher discounts from publishers – enabling them to compete in a low-price war. It is important that all booksellers understand what happens when a book is discounted, and who it is who feels the burden of this discount culture the most.

. . . .

The moment I go to the publisher and request a higher discount, the royalty rates for the author start to creep lower. When the Net Book Agreement was removed we were in a pre-digital world, no one had anticipated the arrival of e-readers (even though the first model of the Kindle in 2007 sold out within just a few hours) or the growth of leviathan that is Amazon – and as a result no one expected that trade discounts, even when ‘liberated’ from the constraint of the Net Book Agreement, would go above 55%. But they rocketed to much higher, and in cases now some retailers are demanding more than 70% discount on books from the publisher – meaning that the royalties back to authors, which are tied closely in to the rate of discount, are also decreasing year on year.

. . . .

Many authors however are struggling; writers with thirty years’ experience and many dozens of important and successful books to their name, are living on their over-drafts, taking second jobs to make ends meet, surviving by their partner’s incomes, or realising that they can earn more money by not writing but by doing events based on previous books. I spoke to one prominent, award-winning writer who told me ‘I have produced more than 200 books in 30 languages; many of my titles have sold over 1 million copies, I have a stack of awards – and yet I have not yet earned out the £10,000 advance I was given to cover two years’ work, and struggle to make ends meet‘. I’ve met writers who, just to enable them to continue in their chosen profession, are borrowing money from relatives, who have moved abroad for a lower cost of living and many whose thoughts of giving up are so dominant that I think it is fair to say that there is a prowling mental health risk too.

. . . .

The royalty arrangements for authors are so complex that the vast majority of authors do not even claim to understand them. If you know an author well enough to ask, please get them to show you their royalty statement – what you’ll see is a standard 10% of the recommended retail price for a new hardback book but then a separate and much lower rate for ‘discounted sales’ and another lower rate for ‘online sales’ (Amazon). When you have a complex contract, a lot can be hidden, intentionally or otherwise. That 10% as a full price royalty is only for hardbacks. On paperbacks it is, as a standard, 7.5% – with variations. And royalties are different again when a book is prepared for export. Royalties can go up according to sales and over time – but only once an author has earned out the advance on a royalty (if there is an advance).

. . . .

On ‘Special Sales’ (of which more later) the terms are, as standard, 10% of publisher’s net receipts, but when that book is so heavily discounted, that equates to about 3% of rrp – so for a £1 book, and author gets between 2p and 3p. It is important too that we start to question the level of transparency when out-dated agreements underpin the entire industry.

. . . .

In economic terms the issue is not only one of fair apportionment but also of clarity of who takes the risk. I can already hear publishers and trade magazine writers shouting ‘The publisher! The publisher takes the risk’. Yes, certainly the publisher is taking much of the financial risk, and many of the smaller publishers are making very modest profits indeed as a result. However, they are not taking all the risk. By firing out huge numbers of books, placing marketing behind a few and leaving the others to sink or swim, the culture of large-scale publishing is pushing a huge part of the risk back on to the authors, whose remuneration is already low. On the face of it writers, as a producer of goods, have a low production cost – they work largely alone, at home, with minimal tools. And this is the way that the publishing industry generally views authors now – they are cheap producers. And if one gives up because they can’t make ends meet, there will always be another easily and cheaply obtained.

. . . .

The largest retailers seem to be in control of pricing and the perception of value, while the large publishers place themselves in importance far above the authors and illustrators on whose work they rely.

. . . .

Large retailers are demanding higher and higher discounts from the publishers and the publishers are protecting profits by using the antediluvian complexity of authors’ contracts and royalty arrangements as a cushion. Royalties are not protected in any way against either a publisher’s decision to discount, or a retailer’s demand for a discount. I hear from publishers that presence on Amazon is now prerequisite for sales success – a lack of presence there now seems to mean that other retailers won’t take it and reviewers won’t cover it; so publishers would say that they have little choice but to fall in with the demands made for 53-70% discounts. If the net revenue by the publisher then is only 30% of cover price, the author will get 30p of a £10 book, not the 60p they would have got had it been sold at a standard 40% trade discount.

. . . .

Many authors struggle to make any claim to their back catalogue of work, even when the publisher has no intention either of supporting the development of that author, or of ever re-publishing older books. Authors are having their perceived value, along with their incomes, reduced year on year. Few rights, dubious contracts, low income.

. . . .

In addition to this there are several murky areas of publishing about which we should all be concerned – ‘Special Sales’ is one that leaps to mind. This is when a publisher can sell on an author’s backlist (the author having little choice because of, again, contractual arrangements) to a company that will then produce the book to sell at very low price at discount stores, through catalogues or at book fairs. In this case, the author’s royalties are even lower: just 2-3%, while the publisher will take 60-70% of the profit with the books being printed at extremely low cost.

Link to the rest at Kenilworth Books

Kenilworth Books is a small bookshop located in Kenilworth, England. Kenilworth is located in Warwickshire, about 6 miles from Coventry in the West Midlands.

.

.

Neither the OP or the bookshop’s website identifies the author of this piece, but PG’s best guess is that the author is either an owner or manager of the bookshop.

In either case, PG found the OP to be quite insightful and well-written. Clearly, the author of the piece understands the book business very well and is familiar with the way authors are commonly treated by traditional publishers.

The gravamen of this article and the previous one PG posted from The Bookseller that appears immediately below is that publishers are killing their own industry by the way they treat authors and most booksellers.

A book industry comprised mainly of large publishers and Amazon is not a place in which publishers would find quiet lives.

On the one hand, Amazon pays indie authors much higher royalties than traditional publishers do. On the other hand, Amazon always wants to be the lowest-priced seller of goods, so the publishers’ margins will come under greatly-increased pressure.

If publishers’ short-sited pricing tactics squeeze physical bookstores out of the market, the publishers’ main advantage in the eyes of most traditionally-published authors – access to physical bookstores – will be gone. Barnes & Noble is teetering on the edge of collapse so, in the US, publishers won’t have any large customer who can purchase a wide range of physical books in large numbers other than Amazon.

PG suggests that, in early 2018, smart authors will keep as many options open as possible.

He further suggests that an author signing a traditional publishing contract:

  • with non-compete and option clauses and
  • royalty provisions structured to make it likely the author’s effective royalty rate will be well below the “standard” royalties that are always listed first in these contracts and
  • that will last the rest of an author’s life and then some
  • is the archetype of an author failing to keep her options open.

And, of course, traditional publishing contracts are always subject to assignment and sale, so the dedicated and experienced book people working for the publisher who romance the author into signing the publishing contract won’t last long if the publisher is acquired by a venture or distressed property financial type. If an author thinks present-day royalty statements are difficult to understand, wait until she sees the statements the new owners create.

The Story Behind China’s Online Literature Boom

31 December 2017

From the Hong Kong Free Press:

The e-book market is exploding on mainland China. According to official estimates, there were 353 million online literature readers by June 2017 and more than 90 percent of them — nearly 327 million — access literature through their mobile phones.

Although the popularity of online literature means emerging authors have an opportunity to showcase their work to a growing audience, for some writers and readers alike, this new publishing model is creating some unforeseen negative effects.

. . . .

One big indicator of this explosion in online readership has been the market value surge of China Literature, China’s biggest online literature platform and a subsidiary of IT giant Tencent. The company’s value skyrocketed in the Hong Kong stock market after its initial public offering in November.

The company has a 70 percent share in China’s online literature market, with 9.6 million online works — primarily in the fantasy, palace-fighting, tomb-raiding, conspiracy, romance genres — created by 6.4 million writers to serve an average of 192 million monthly users.

Its income not only comes from readers’ content payment, but also from copyrights on the website’s most popular works, such as “Legend of Concubine Zhen Huan”, “The Secret of the Grave Robber” and “The Journey of Flower”, which have been adapted into TV dramas.

. . . .

In China, the copyright of a hot online novel can be sold for millions of yuan because a large fiction fan base can guarantee the popularity of an adapted TV series or a movie. In fact, in recent years, China’s TV and video market have increasingly been dominated by from online novels adaptations.

. . . .

Popular writers who release their works on the China Literature platform must sign contracts with the company, stipulating copyright ownership in China Literature’s favor and listing a set of “self-censorship” guidelines that must be followed.

The contract writers are paid through a pyramid pay-for-words model which is highly exploitative as the algorithm allocates a higher pay rate per word and varies based on the popularity of the writer. In 2016, China Literature paid nearly RMB 1 billion yuan — approximately US$150 million — for 5.3 million writers in which just over one hundred top authors gained more than 1 million yuan. The average payment was less than two hundred.

At the same time, the payment system does not encourage good quality work because writers tend to churn out large number of words in order to increase their income under the pay-for-words model.

. . . .

Moreover, writing has become an interactive process with pressure from reader feedback dictating the creative writing process. To woo readers, many writers have to invent bizarre plots as well as update a few thousand characters every day, or readers cancel subscriptions. Many writers have to suspend their publications because they are unable to fulfil their former plot designs or because they can’t stand the pressure of updates.

. . . .

“As a online literature writer, I am not as capable as others. They could write up to 10,000 or even 20,000 words per day while I can only write up to 4,000 to 5,000 words. How should I punish myself.”

An industry report conducted by Hu Run Net on top 85 online literature writers summed up a number of characteristics that these Chinese online writers seem to share:

1. Average age is 37-year old;
2. The youngest writer in the top 50 is just 26-year old;
3. 65 percent of the top 85 writers are male and 35 percent female;
4. On average each writer produces 5000 words daily, although that number can reach nearly 20,000 words per day. Most of them spent over 8 hours on their work.

Link to the rest at the Hong Kong Free Press and thanks to Gina for the tip.

Content duplication issue briefly keeps self-published chapbooks off Amazon

4 December 2017

From TeleRead:

Authors Sharon Lee and Steve Miller are running into a little static when trying to publish some of their short stories via Amazon—thanks at least in part to the automation by which Amazon has to run its self-publishing operation.

Lee and Miller have been self-publishing some of their short stories in chapbook form since long before self-publishing became the monster that it is today. They started back in the 1990s, publishing actual paper chapbooks, but in recent years closed down the paper operation and switched to electronic versions.

. . . .

Lately, Sharon Lee and Steve Miller have republished four of their previously-published short stories in e-chapbook form. The stories were and remain available as part of a larger Liaden short story collection from Baen.

. . . .

They published these stories as a pair of e-chapbooks to Apple, Barnes & Noble, Kobo, and Baen without any problem—but the trouble came in when it came time to place them on Amazon.

. . . .

When it comes to ensuring that someone isn’t trying to pull a fast one by republishing someone else’s content, [Amazon’s] automation effectively takes a similar form to plagiarism-checker Turn It In: if previously-published content appears in a new form, this calls for some special attention.

. . . .

Amazon wanted to see reversion letters to the stories, signifying that Baen returned their publication rights to Lee and Miller after their contract expired. However, those stories were never fully sold to Baen to begin with. They sold Baen anthology rights, for the purpose of that anthology, while keeping for themselves the rights to place the stories again elsewhere or self-publish them.

. . . .

Sharon Lee explains that, “in the Normal World of Publishing” this sort of thing simply isn’t done. When an author places a work with a new publisher, they sign a contract in which they agree they have the rights to do so. If it later turns out they don’t have those rights, the lawyers come out to play. But never does any publisher require or expect authors to provide a copy of their previous contract with another publisher. Lee writes:

Now, Amazon is in a strange situation; it cannot itself decide if it’s a publisher or a distributor, but in either case the demand for a copy of our contract with our publisher is out of line, and Steve and I will not comply.

Link to the rest at TeleRead

In an update to the OP, TeleRead says Amazon customer service solved the problem. PG is happy to hear that in part because the authors seem like nice people.

PG is usually on the little guy’s/gal’s side in these kind of disputes, but in this case, he understands Amazon’s concerns:

–  The plagiarism/copyright infringement checker shows that someone is submitting material that has already been published by another publisher.

–  The authors say they have the right to self-publish this material themselves.

–  When Amazon asks for a reversion letter from the authors to document their right to self-publish, the authors say they don’t have/need such a letter.

–  Amazon understands that if the authors are not telling the truth and the real rights-holder is upset, Amazon will probably be sued for copyright infringement along with the authors.

–  Zillions of people are trying to pull some sort of scam on Amazon each day.

What exclusive rights does the owner of a copyright have under US copyright law? (Note that an author typically passes these rights to a commercial publisher under a typical publishing contract.)

17 U.S. Code § 106 provides a summary. PG highlights some language that would reasonably concern Amazon:

Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

(1) to reproduce the copyrighted work in copies or phonorecords;
(2) to prepare derivative works based upon the copyrighted work;
(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;
(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and
(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.

KDP ebooks are certainly reproductions of copyrighted material. When someone pays Amazon for an ebook, Amazon is certainly reproducing and distributing a copy of the copyrighted ebook to a member of the public.

Under Paragraph 1 of the Kindle Store Terms of Use (the agreement which governs the relationship between Amazon and a customer with respect to ebooks) “Kindle Content is licensed, not sold, to you by the Content Provider.” In Paragraph 3 of the Kindle Store TOU, in the event of any violation of the TOU, Amazon is free to revoke a user’s access to the its Service, which, by definition, includes Kindle Content.

Although licensing is not expressly mentioned as an exclusive right under 17 U.S. Code § 106, it is difficult for PG to believe that a court would not find licensing to part of the exclusive rights of a copyright owner to control the “rental, lease, or lending” of an ebook.

Considering the above, is it unreasonable for Amazon to ask for a copy of the publishing contract between the authors mentioned in the OP and Amazon?

PG thinks it’s entirely reasonable and would almost certainly would have recommended reviewing the contract between Baen and the authors if Amazon had asked him what it should do.

He probably would have also recommended contacting Baen to confirm that it only had the limited rights the authors claimed to have granted.

The fact that this “isn’t done” in the publishing business will be no help to Amazon if it is sued by someone who has exclusive rights to publish a literary work that appears on Amazon despite what the authors have told Amazon.

Generally speaking, under most commercial publishing contracts, the publisher grabs every right its attorneys can think of from authors whose work is being published. “Anthology only” rights that apply to only a single edition of an anthology are rare birds indeed.

PG says there are a lot of things that “aren’t done” and a lot more things that “are done” in the traditional publishing business that are really bad ideas.

As far as “the Normal World of Publishing” is concerned, that world is what indie authors are fleeing from when they self-publish with Amazon. Amazon is disrupting “the Normal World of Publishing” to the benefit of both authors and readers.

If you want to decrease your chances of ever making a decent living from your books, stick with “the Normal World of Publishing” and the “rules” that apply to that world.

 

 

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