PG’s Thoughts

A Publishing Contract Should Not Be Forever

28 July 2015

From The Authors Guild:

From The Authors Guild:

Diamonds may be forever, but book contracts should not be. There’s no good reason why a book should be held hostage by a publisher for the lifetime of the copyright, the life of the author plus seventy years—essentially forever. Yet that’s precisely what happens today. A publisher may go bankrupt or be bought by a conglomerate, the editors who championed the author may go on to other companies, the sales force may fail to establish the title in the marketplace and ignore it thereafter, but no matter how badly the publisher mishandles the book, the author’s agreement with the original publisher is likely to remain in effect for many decades.

That’s the way most book contracts have been drafted for more than a century, and publishers take it for granted; only a few brave souls have asked why or argued with it because that’s the way it has always been. In the ideal traditional publishing partnership—where the publisher nourished the author’s career; where the same editor worked closely with the author over decades, editing and reworking books and new book ideas; where the publisher actively marketed and promoted the author and gave the author a sufficient advance to live on between books—then it might have made sense for the publisher to own the rights for the entire copyright term. But that is the rare author-publisher relationship today.

. . . .

Authors victimized by this status quo know that it’s long past time for publishers to offer a fair deal. We believe three basic changes are urgently needed: (1) time-limited contracts, (2) a clause that provides for reversion of unexploited rights, and (3) a specific new unchallengeable definition to replace historic “out of print” clauses that are not remotely relevant in the electronic age.

When it comes to time limits in agreements, publishers historically have positioned themselves on the lucrative side of the line. With authors, the deal they offer basically lasts forever. But when they’re on the other side of the deal, licensing things like paperback reprints or foreign rights to other companies, publishers typically don’t make agreements that continue for the life of a book’s copyright. Instead, the contracts are good only for fixed periods—seven years, for example. If publishers can routinely demand licenses that expire, why shouldn’t authors?

We think the “standard” contract should last for a limited period of time from the date of publication; it should end well before the 35-year termination window opens. When the contract expires, if a book is still doing well, the author and publisher might negotiate another time-limited deal—or the author might choose to move the book to a house that has put more effort into marketing the author’s later works. If the book is no longer gaining support from the original publisher, the author might choose to self-publish it or take it to another publisher. In any case, a time-limited contract gives authors the leverage and flexibility that they need in today’s publishing environment.

. . . .

That brings us to the third step: the “out of print” clause, which has failed woefully to keep up with modern publishing practices and must be replaced. The original concept was straightforward: When a publisher fails to keep a book on the market in a profitable way, the author should get all the rights back. This is more important today than ever, since e-books and print-on-demand make it easy for authors to republish their backlists: a recent study conducted by the British Authors’ Licensing and Collecting Society (ALCS) showed that 70% of authors who were able to reclaim their rights were able to earn more money from the work in question.

. . . .

The remedy is simple: Kill the entire outmoded concept of “out of print.” Instead, the contract should define when book rights are being “inadequately exploited” and therefore available for reversion to the author when the book fails to generate a certain amount of income—say, $250–$500—in a one-year period. Using income as the yardstick, not a specific number of sales, is essential: Publishers might otherwise be able to game the clause by offering one-cent e-books the way they’ve gamed existing clauses by using e-books and print-on-demand.

Link to the rest at The Authors Guild and thanks to Melinda for the tip.

PG will note that The Authors Guild proposal for revised out of print provisions is identical to A Minimum Wage for Authors which PG first publicly suggested in 2011.

He believes that the $250-500 per year threshold for reversion is too low, however. This is especially true if the threshold amount is not indexed for inflation (another PG suggestion from 2011). In the US at least, we’ve become accustomed to very low rates of inflation during the past several years. However, PG believes this is not the new normal.

$250 might not buy you a hamburger at McDonalds in a few decades. In 1964, a McDonalds hamburger cost 15 cents.

Authors, ABA to DOJ: Investigate Amazon’s Abuse of Its Dominance in the Book Market

14 July 2015

From the American Booksellers Association:

Today, in an unprecedented joint action, U.S. booksellers, authors, and literary agents called on the U.S. Department of Justice (DOJ) to investigate the business practices of Amazon.com. The action comes as similar efforts are underway in the European Union.

In a letter delivered to the Department of Justice on July 13, the group Authors United called for an investigation of Amazon’s “abuse of its dominance in the world of books.” The letter stresses that Amazon’s monopolization of the book industry has had a negative impact on free expression and the health of America’s book industry.

On the same day, the American Booksellers Association also wrote to the Department of Justice, urging the department to give “careful consideration” to the letter sent by Authors United. (To read both letters in full, click here.) The Authors Guild and the Association of Authors’ Representatives have expressed their support of the action, and the Authors Guild is also sending a letter to the DOJ.

Over the past year, many of Amazon’s business tactics have called into question the power the online retailer wields over the book industry — and whether it constitutes a monopoly that demands government action.

In 2014, a dispute over e-book terms between Amazon and Hachette Book Group became public when Amazon appeared to delay shipping of popular Hachette titles and removed the preorder button for upcoming books in an effort to pressure the publisher into giving the retailer the terms it wanted.

Amazon is also well-known for selling books as loss leaders (below cost) in an effort to sell other, more high-priced items and to increase its market share in the book industry.

. . . .

The authors point out that Amazon now controls the sale of more than 75 percent of online sales of physical books; more than 65 percent of e-book sales; more than 40 percent of sales of new books; and about 85 percent of e-book sales of self-published titles.

In ABA’s letter, CEO Oren Teicher and ABA President Betsy Burton write: “A central tenet of ABA’s mission is to ensure that a broad array of books is as widely available to American consumers as possible. The greater the number of books, the greater the number of voices and ideas; the greater the number of voices and ideas, the richer are the lives of our citizens and the stronger our society.”

Amazon’s business tactics, the ABA letter continues, threaten publishers’ ability to support new and lesser-known authors and publications, thereby hindering the diversity of speech. “We have already seen fewer titles published by the major publishing houses each year,” it notes. “And while it might be tempting to chalk this up to a changing economy, the truth is that these changes have been manipulated by one retailer, which uses scorched-earth tactics to extract concessions and kickbacks from publishers in exchange for offering their books for sale.”

Link to the rest at American Booksellers Association and thanks to Melinda for the tip.

Following is an excerpt from an overview of Section 2 of The Sherman Antitrust Act found on the website of the US Department of Justice (citations omitted):

Section 2 also advances its core purpose by ensuring that it does not prohibit aggressive competition. Competition is an inherently dynamic process. It works because firms strive to attract sales by innovating and otherwise seeking to please consumers, even if that means rivals will be less successful or never materialize at all. Failure–in the form of lost sales, reduced profits, and even going out of business–is a natural and indeed essential part of this competitive process. “Competition is a ruthless process. A firm that reduces cost and expands sales injures rivals–sometimes fatally.” While it may be tempting to try to protect competitors, such a policy would be antithetical to the free-market competitive process on which we depend for prosperity and growth.

Likewise, although monopoly has long been recognized as having the harmful effects of higher prices, curtailed output, lowered quality, and reduced innovation, it can also be the outcome of the very competitive striving we prize. “[A]n efficient firm may capture unsatisfied customers from an inefficient rival,” and this “is precisely the sort of competition that promotes the consumer interests that the Sherman Act aims to foster.” Indeed, as courts and enforcers have in recent years come to better appreciate, the prospect of monopoly profits may well be what “attracts ‘business acumen’ in the first place; it induces risk taking that produces innovation and economic growth.” Competition is ill-served by insisting that firms pull their competitive punches so as to avoid the degree of marketplace success that gives them monopoly power or by demanding that winning firms, once they achieve such power, “lie down and play dead.”

Section 2 thus aims neither to eradicate monopoly itself, nor to prevent firms from exercising the monopoly power their legitimate success has generated, but rather to protect the process of competition that spurs firms to succeed. The law encourages all firms–monopolists and challengers alike–to continue striving. It does this by preventing firms from achieving monopoly, or taking steps to entrench their existing monopoly power, through means incompatible with the competitive process.

. . . .

Protection of Competition, Not Competitors

The focus on protecting the competitive process has special significance in distinguishing between lawful and unlawful unilateral conduct. Competition produces injuries; an enterprising firm may negatively affect rivals’ profits or drive them out of business. But competition also benefits consumers by spurring price reductions, better quality, and innovation. Accordingly, mere harm to competitors is not a basis for antitrust liability. “The purpose of the [Sherman] Act,” the Supreme Court instructs, “is not to protect businesses from the working of the market; it is to protect the public from the failure of the market.” Thus, preserving the rough-and-tumble of the marketplace ultimately “promotes the consumer interests that the Sherman Act aims to foster.”

The Supreme Court has underscored this basic principle repeatedly over the past several decades. In 1984, it observed in Copperweld that the type of “robust competition” encouraged by the Sherman Act could very well lead to injury to individual competitors. Accordingly, the Court stated that, without more (i.e., injury to competition), mere injury to a competitor is not in itself unlawful under the Act. In so stating, the Court cited its 1977 decision in Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc. for the proposition that the antitrust laws “were enacted for ‘the protection of competition, not competitors.'”

Link to the rest at Justice.gov

Amazon is not a competitor to authors. So why is Authors United, a handful of authors who are unrepresentative of authors as a whole, complaining about Amazon? PG says never seems to occur to them that, if a genius organization with Amazon’s corporate values had never come into existence, book sales would almost certainly be much lower than they are today. Amazon has made books far more accessible via both price and online convenience to average American consumers than they were before Amazon.

Amazon Publishing notwithstanding, Amazon is not a serious competitor to traditional publishers. The publishing industry was in a long-term consolidation phase before Amazon became a power. The creativity generated by dozens of US publishers was rapidly disappearing into the maw of huge corporate conglomerates before Amazon.

Does anyone seriously contend that traditional publishing is more creative and vibrant today than it was in 1960s when major publishers released books by John Updike, Harper Lee, Günter Grass, John Steinbeck, Henry Miller, J.D. Salinger, Aleksandr Solzhenitsyn, Mary McCarthy, Saul Bellow, Ken Kesey and Frank Herbert? (And that’s just fiction in the first half of the 1960s) Similar lists could easily be created for the 70s and 80s.

According to Publishers Weekly, only one adult title made the print bestseller list in 2014. PG says that represents a real decline in the traditional literary world and Amazon had nothing to do with it.

Amazon does not act as a literary agent for any authors, so why is the Association of Authors’ Representatives complaining?

Amazon’s real competitors, including such companies as Barnes & Noble and Kobo, don’t appear to be participating in this petition to the Justice Department. Barnes & Noble has allied with the ABA on some other issues, but not this one. Perhaps they have better antitrust legal advice than the signators do.

The real complaint that Authors United, the Author’s Guild, the American Booksellers Association and the Association of Authors’ Representatives have is that Amazon is changing their world.

PG agrees that Amazon is, in fact, changing the book world. Unfortunately for the complainers, that’s not illegal.

Comments

8 July 2015

PG has said several times that the comments are the best part of TPV.

A couple of weeks ago, TPV received its 200,000th comment (sorry, but PG doesn’t know which comment was number 200,000 and can’t see see an obvious way to persuade WordPress to divulge that information).

PG would like to thank everyone who has contributed and continues to contribute comments. Additionally, he congratulates the very large majority of commenters who are courteous and respectful even when they disagree with another visitor.

‘A Year of Women’? How About ‘A Year of Publishing Parity’ Instead?

7 July 2015

From The Huffington Post:

Occasionally I sit outside certain issues, looking at how and why ideas emerged, if all parties involved explored the ramifications, and, if so, just how well thought out the process was.

A good example is the cause célèbre swirling around literary circles these days, the recent throw-down by author Kamila Shamsie in her piece titled, The year of women. Its thesis? An actual year in which only women will get published.

. . . .

So, 2018 will be the year in which, ostensibly, no male writers will be published. It’s believed (hoped) this will go a long way toward righting sexist wrongs. It’s also hoped that feminist-oriented males will go along with the program, with literary contest organizers, judges, and publishers, large and small, jumping on the bandwagon.

. . . .

I found myself getting twitchy and all “devil’s advocatey” about the whole thing. Certainly I get the reason for such affirmative action — women are deeply under-represented in all areas of the arts, literature no exception — but what does it say that those taking on gender politics believe the way for women to rise is to literally removemen from the equation? Do we, as strong, female artists, really believe it’s necessary to excise men in order for fairness to reign? It seems many do.

. . . .

There’s also the fact that many “gatekeepers” in this industry — agents, publishers, publicists, marketers, etc. — are women, and they have much to do with which writers get agents, publishers, publicity; win contests, or, even, just get in the damn door. Personally, and from a strictly anecdotal perspective, I know countless female writers, many of whom are excellent writers, who cannot, for the life of them, get past the query letter stage with agents… and most of the agents rejecting them are women. As for publishers at the helm deciding which writers to push, which to give publicity, and which to send to various high profile contests, may I ask: how many female publishers pushed their female writers with the same verve, and in the same numbers, as their male counterparts?

So there’s that.

Then there’s the fact that — again, anecdotally — a great many excellent male writers are just as frustrated and stymied in their efforts to advance their careers as female writers. I know several myself. They’re out there in the undulating white water of independent publishing, thrashing their arms in attempts to even be seen, much less reviewed and rewarded. Are we to make the literary marketplace just a little bit harder for them as a way to assuage gender imbalance, particularly when that imbalance is no fault of their own? Does that seem fair?

. . . .

But I am also a humanist: the wife of a man, mother of a son, sister to five brothers, and friend to a great many wonderful men, many of whom are artists struggling to build careers and find footing in industries that are challenging for anyone, male or female. So, to suggest that a hardworking, talented male writer, by virtue of his gender alone, would not be able to get his book published in 2018, because that year has been deemed “a year of publishing women,” seems punitive. It seems unfair. It seems… sexist. Which inspires the question: is the only solution to gender bias reverse gender bias?

. . . .

So how about this? Instead of “a year of publishing women,” let’s have “a year of publishing parity.” TYOPP. Let’s throw down a challenge to demand parity in every aspect of publishing. Every aspect:

  1. Agents will be obligated to sign as many female writers as male writers.
  2. Publishers will be obligated to give deals to as many female writers as male writers.
  3. Publishers (or anyone) submitting books to contests will, by virtue of the rules of TYOPP, submit as many by women as men.
  4. Book reviewers will be required to review as many books by women as men.
  5. Book sections of any media will be obligated to feature as many women writers as men.

And so on. Ah… wouldn’t it be lovely if that could actually happen?

Link to the rest at The Huffington Post and thanks to Meryl for the tip.

PG says if the gatekeepers are biased, don’t mess around with the gatekeepers. If you’re a serious author, you probably don’t have time to reform a declining industry.

Speaking of decline, PG doubts anyone working in tradpub is going to risk a career by choosing a manuscript based on factors other than likely sales success. Points for political correctness won’t protect them from being fired by the big boss (male or female) because they didn’t find bestsellers.

Plenty of women use male or genderless pen names. More than a couple of men who write in genres dominated by women use female pen names. English author Bill Spence has written twenty-odd historical romances as Jessica Blair. Harold Lowry, who writes as Leigh Greenwood was RWA president. Other authors use different pen names and different genders for different genres.

Some authors are anxious to meet their readers face-to-face. Some are happier with email and blog posts. To PG’s knowledge, Amazon doesn’t check your author page for accuracy (here’s the author page of Jessica Blair AKA Bill Spence). Your gender secret can be as deep as you want it to be.

Your pseudonym is not undergoing a background check. Send your pen name to an Ivy League school if you like or make him/her an antiques dealer. Your pseudonym can be as eccentric and offbeat as you always wished you had the courage to be.

Pen names are just one of many marketing tools that authors have used for centuries. There is an ongoing debate about whether William Shakespeare is a pen name. Benjamin Franklin wrote under several pen names in the 1700’s.

The author known as Anne Rice was born Howard Allen Frances O’Brien, reportedly named after her father.

Stephen King wrote four novels under the pen name Richard Bachman, hoping to lure Bachman-Turner Overdrive fans.

Joanne Kathleen Rowling chose J.K. Rowling.

Lawrence Block wrote as Jill Emerson, Chip Harrison, Paul Kavanagh, and Sheldon Lord.

E.L. James is Erika Leonard, born Erika Mitchell.

Joyce Carol Oates wrote a mystery (Lives of the Twins) under the pseudonym Rosamond Smith because she wanted to “escape her own identity” – and because she could put out a novel every two weeks, her preferred pace. When her ruse was revealed, it was a surprise even for her publisher.

If your purpose is to reform society, push for quotas or years when publishers only choose manuscripts written by a particular oppressed group or whatever solution you feel will remedy the problem.

If you really want to be published and you believe your gender or race or national origin or religion, etc., is a barrier, quit messing around with those who are biased against you for irrational reasons and go indie. Success is the best revenge.

 

U.S. Romance Readers Outnumber Gun Owners

27 June 2015

From  author Giulia Torre:

Did you know they stopped counting?

The last time anyone counted the number of romance readers in America was 2005, when marketing research group Corona Insights conducted a nationwide telephone survey for the Romance Writers Association (RWA).

The conclusion was that in that year 64.6 million Americans read at least one romance novel. In 2002, it was estimated at 51.1 million romance readers in America. In 1998, 41 million readers.

Ten years later, I predict that number has increased, based on the rise of self-publishing, the advent of the eBook, and the explosion of the erotica market. It’s been a big decade for reading in general, and romance has been a principal in the revolution.

Corona’s figures at the time were extrapolated by a definition of romance that adapted to readers. According to Kevin Raines, the CEO and founder of Corona who worked on the 2005 survey, although RWA had a strict definition of ‘romance’, survey respondents were allowed to self-identify the genre.

. . . .

From 1998 to 2005, according to Corona’ s figures, the US population of romance readers saw an average annual 8% growth, a number too large to apply going forward at liberty.

In fact, based on revenue alone, RWA claimed in 2005 that romance fiction generated $1.4 billion in sales. However, that reported number has since dipped, with RWA reporting $1.08 billion in revenue in 2013, a 22.8% drop.

. . . .

Guns are a lot like romance novels. People advocate on their behalf. Collect them. Buy them with variable frequency. Sometimes lie about the number they own. And, like romance novels, most guns don’t need to be registered.

Somehow, in spite of these vagaries, credible numbers are reported.

According to University of Chicago’s General Social Survey, the number of people who reported having a gun in their home in the 1970s averaged about 50 percent, the 1980s averaged 48 percent, the 1990s at 43 percent and 35 percent in the 2000s. Now, numbers are being reported at an all-time low of 30%. By my count, that’s 72.8 million American adults.

. . . .

Based on the most recent numbers we have, and the arguable trend upwards in romance consumption and the reported trend downward in gun ownership, romance readers by now may actually outnumber gun owners.

That’s good news.

Link to the rest at Giulia Torre and thanks to Christopher for the tip.

Here’s a link to Giulia Torre’s books

PG says this is an interesting hook for a blog post about romance readers. It hooked him.

He will make a couple of observations:

1. A lot of romance readers are also gun owners.

2. He believes that survey respondents substantially underreport their gun ownership due to social attitudes towards guns.

In the US, if a person wants to purchase a firearm through a licensed firearm dealer, he/she fills out a form which dealer submits for a criminal background check by a division of the FBI. The firearm can’t be sold unless the FBI reports confirms that the purchaser has a no criminal record.

While the number of background checks understates the total number of gun sales because not all sales require a background check, the relative number of background checks is a generally reliable proxy for the increase or decrease of gun sales over time.

The FBI keeps track of the number of background checks it performs. That number increased every year from 2002-2013. In 2002, a total of 8,454,322 background checks were performed. In 2013, a total of 21,093,273 background checks were performed so it was more than a minor increase over 10 years. There was a slight drop in background checks in 2014 to 20,968,547. (See the 2014 Background Check System report from the FBI for much more information)

Ms. Torre cites the University of Chicago’s General Social Survey for the proposition that fewer people report having guns in their homes now than in past decades.

While PG has no doubt that the University of Chicago is accurately reporting its survey results, but its information is based on answers given to survey questions in face-to-face or telephone interviews.

In the 1950’s and ’60’s gun ownership was common and held no particular social significance. PG purchased a shotgun when he was 12 years old and, other than having his father accompany him to the hardware store, no formalities were necessary, no records kept. He needed a license to hunt pheasants, but no license to own or carry a gun.

During this era, more than a few homes had military rifles and pistols that had been brought back to the US by returning World War II veterans. When he was about 10 years old, PG went deer hunting using the standard military rifle used by the British Army during the war. He shot the rifle once and it almost knocked him over. No deer came close to being harmed during this exercise.

Over time, gun ownership became subject to more and more disapproval in certain segments of society and gun regulation, both federal and state, grew much more stringent. Strong and well-funded anti-firearm organizations were created.

The net effect of these changes is that a growing segment of gun owners stopped talking about their guns to anyone other than friends and fellow gun owners. PG suggests that today, a significant portion of gun owners answering questions from a stranger about guns in their home would be inclined to lie based upon the belief their guns were nobody’s business.

In addition to the growing increase in FBI background checks for gun purchases, since the election of President Obama, who supports increased restrictions on gun ownership, US gun and ammunition manufacturers have enjoyed booming sales and wonderful profits.

Rapidly-growing gun sales are reflected in rising stock prices of publicly-held gun manufacturers, Smith & Wesson Holdings, up 150.1% in the last five years, and Sturm Ruger, up 370.6% in the same period. The stock prices of large publicly-held retailers with significant gun sales have also boomed, Dick’s Sporting Goods and Cabela’s, up 168.7% and 423.1% in the same five years, respectively.

PG definitely does not want to start a comment war over gun ownership and regulation and he strongly favors ever-increasing sales of romance novels. He doesn’t, however, believe that romance sales and gun ownership are inversely related to each other.

Barnes & Noble looks to boost sales with revamped website

26 June 2015

From ZDNet:

Retail bookseller Barnes & Noble is hoping that a scheduled website redesign will help bolster the struggling chain’s omnichannel efforts, as sales of its Nook e-reader continue to slip.

During a post-earnings report conference call Thursday, Barnes & Noble CEO Michael Huesby said the company’s customer engagement focus is shifting beyond brick-and-mortar and toward e-commerce.

“I am pleased to announce that we are launching our improved BN.com website next week, which has better search capabilities and improved user experience, and is expected to increase sales and yield cost savings,” Huesby said. “We expect the website to be a valuable resource for customers, whether they choose to have their orders shipped to home, or made available for in-store pickup.”

The contrast between physical Barnes & Noble bookstores, which were just treated to a year-long merchandising effort, and the digital BN.com storefront is certainly stark. While the company’s brick-and-mortar locations feature cozy accouterments and wafts of coffee and paperbacks, the BN.com website is dated, clunky and uninviting.

The company doesn’t break out e-commerce sales, they’re instead lumped in with sales from the physical bookstores, but given the redesign and website’s current form, it’s unlikely digital did much to move the needle.

Link to the rest at ZDNet and thanks to Dave for the tip.

PG will state categorically that the people in charge of marketing at Barnes & Noble don’t understand how to sell products and services online. Should anyone with real aptitude for ecommerce have mistakenly wandered into a job at Barnes & Noble, they’ve left for greener pastures. Just about any place other than Barnes & Noble is a greener pasture.

Unfortunately for Barnes & Noble, their primary competitor is the best ecommerce company in the world.

Amazon doesn’t announce launches of an “improved website” because it is constantly studying and improving  the performance of its website. Few that aren’t actively reviewing Amazon’s website will notice the ongoing improvements, but if you were to carefully examine Amazon’s website of a year ago (sorry, but the Wayback Machine won’t catch much about how the site has functionally changed) and compare it to today’s site, you would see many, many changes.

And there are at least ten changes you don’t see behind the scenes for every change that shows itself to a visitor.

Serious ecommerce websites are never “done.” Each minute, each hour, each day provides additional information that allows smart website operators to make their sites even better.

And that’s only one aspect of Amazon’s operations. Robots in the warehouses, new product development, etc., etc., etc. contribute to Amazon’s overall excellence.

Barnes & Noble vs. Amazon in ecommerce is like a Pop Warner team lining up against the Green Bay Packers. The competition is so one-sided, it’s not even interesting to watch.

If PG were a shareholder of Barnes & Noble, he would suggest that Barnes & Noble avoid wasteful spending by shutting down its ecommerce website and focus on figuring out how to keep from closing physical stores.

Publishing’s Swiftian future

23 June 2015

From Futurebook:

Publishing has a new question to ponder this week: what could Taylor Swift do for us? Swift’s triumph: she got a tech giant to change its mind.

In an open letter to Apple, Swift said she was withholding the record, 1989, from Apple’s new music streaming service, Apple Music, because she was unhappy with the three-month free trial offered to subscribers. “I’m not sure you know that Apple Music will not be paying writers, producers, or artists for those three months. I find it to be shocking, disappointing, and completely unlike this historically progressive and generous company,” wrote Swift. “Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing.”

The blog prompted the following response from Eddy Cue, Apple’s senior vice president of Internet Software and Services,

“#AppleMusic will pay artist for streaming, even during customer’s free trial period”

“We hear you @taylorswift13 and indie artists. Love, Apple”

. . . .

Speaking to Billboard magazine Cue said they had already been been hearing “a lot of concern from indie artists about not getting paid during the three-month trial period” before Swift spoke out. Apple had sought to ameliorate the three-month royalty free window by paying a higher rate after the initial period. Now it will pay artists during the free period, and retain the higher fee afterwards. Still, Apple can afford it.

Could a little bit of Swiftian kick-back help the book business too? It is worth contrasting Apple’s manoeuvre with the changes Amazon made to how it will pay indie writers signed up to its all-you-can-read Kindle Unlimited (KU) and the Kindle Owners Lending Library (KOLL). The change (in brief) is that from 1st July authors with books in those schemes will no longer be paid their percentage of Amazon’s pool of money once 10% of a book has been read, they will now be paid based on what the number of pages read, after the Amazon-mandated “Start Reading Location” (SRL).

. . . .

Much will be written once the impact of the change hits. However, what I have read less about is how, in altering its payment terms, Amazon itself was responding to artist feedback. As the company noted: “We’re making this switch in response to great feedback we received from authors who asked us to better align payout with the length of books and how much customers read.”

In his two blogs about the subject Hugh Howey notes his own influence: “We have different degrees of leverage. I’ve tried to use my leverage to win concessions for all authors. A number of the bestselling authors have done this. We ask for pre-orders for everyone as soon as possible. Better reporting. More categories. All kinds of stuff. I pressure Amazon to extend the 70% down to 99 cents for shorter works, which I think is fair. I give them hell about the exclusivity requirement every chance I get, from the bottom of the ladder to the top.”

There is something intriguing about the growing power of individual artists or collectives—like Howey, Swift claims to be speaking up for those who don’t yet wield the same power as her, “This is not about me. Thankfully I am on my fifth album and can support myself, my band, crew, and entire management team by playing live shows. This is about the new artist or band that has just released their first single and will not be paid for its success.”

. . . .

Similarly, one wonders how indie authors outside of the elite group feel about Amazon’s change in terms. Many were co-opted into Kindle Unlimited without prior request because Amazon felt compelled to move against Scribd and Oyster, and though writers can opt out, the fund from which Amazon generates payments (though it has risen month on month) is still entirely made-up. Now how writers get paid has changed too—and without any sense of their being any negotiation. It is an extreme scenario, but not one we should feel entirely comfortable about.

. . . .

A more pertient question book publishers should be asking, is not what could Taylor Swift do for them, but how the music business got into a position where it had to rely on a single artist to run its negotiations for them.

Link to the rest at Futurebook

PG isn’t an expert in the music business, but does know enough to wonder which industry treats its artists worse, music or publishing.

It’s not hard to treat authors better than Big Publishing does, so Amazon can consistently do so without breaking a sweat.

For example, PG doesn’t think the Authors Guild project to improve publishing contracts has attracted enough attention or analysis.

The list of contract provisions AG wants traditional publishing to change is an indictment of the industry’s horrible treatment of its authors. Even prisoners in the Soviet Gulag were released from oppression when they died. Under life-of-copyright contract terms, the maltreatment of authors continues down to their heirs.

As PG has mentioned before, in his experience with American business contracts across a wide variety of industries, no other group of (supposed) competitors offers such one-sided agreements whose terrible terms are so uniformly applied as does New York publishing. One might suspect collusion was occurring.

To make one point of comparison, which major New York publisher has provided any explanation of changed contract provisions impacting how authors are paid as Amazon has with its KDP Select Global Fund announcement?

Amazon treats authors as business partners. No one will contend that the partners have equal power, but with actions such as paying authors on a monthly basis, providing all authors with detailed sales information in close to real time, allowing authors to opt out of some royalty programs and choose which countries in which Amazon can sell their books, Amazon is miles and miles ahead of Big Publishing in the “authors are our partners” race.

If Taylor Swift were a megastar author, she would be condemning Big Publishing for underpaying authors at least as vigorously as she attacked Apple for underpaying musicians.

The Recent Tintin Ruling Offers a Valuable Reminder that Creators Need to Understand the Contracts They Sign

18 June 2015

From Ink, Bits & Pixels:

How well do you know the contracts you’ve sign?

In the case of the Belgian cartoonist Herge (or rather his estate), the answer is not very well.

The Comics Reporter and Artnet reported last week that the Herge estate has lost an important copyright lawsuit over Tintin, the famous Belgian cartoon character. The estate had sued a Netherlands-based Tintin fan club in 2012 over its use of the original copyrighted images in newsletters sent out to club members. The estate sued the club in a Belgian court, and after three years of legal wrangling the judge ruled in favor of the club.

And here’s where things get interesting.

The fan club won the case not because of fair use (as I would expect) or because the estate didn’t own the copyright (it still did). The estate lost this case after lawyers working for the fan club found and submitted an old contract which showed that Herge had assigned the publishing rights to his publisher in 1942. The court has ruled that 73-year-old contract was still valid, casting a legal shadow on all rights contracts for Tintin.

. . . .

Between the book rights, movie and tv rights, and most importantly the merchandising rights, the Tintin decision just upset contracts worth millions of dollars a year – no joke.

Link to the rest at Ink, Bits & Pixels and thanks to Michael for the tip.

PG says you should think long and hard before you commence litigation. In the nature of lawsuits, any relevant contracts are examined much, much more carefully after a suit is filed than they likely were before they were signed.

In PG’s litigating days, the local Legal Aid office asked him to represent an indigent client who was being sued by a large bank in connection with the repossession of the client’s auto by the bank.

Essentially, the bank loaned too much money on the auto and, following repossession, couldn’t recoup the full amount of the loan balance by selling the vehicle. They sued PG’s client for the deficiency.

PG told the bank’s attorney that the man had no money (you had to be indigent to qualify for Legal Aid assistance) and, even after the bank succeeded in the lawsuit (an almost certain thing), there wasn’t property or income available to pay any meaningful portion of the amount owed.

The bank’s attorney insisted on a trial because PG’s client had signed a contract and contracts were sacrosanct, dammit.

During his trial preparation, PG discovered the bank had made a basic error in drafting its form auto loan documents. PG had no obligation to disclose his discovery to the other side and he decided it would be interesting to surprise the bank’s attorney with this news during the trial.

The bank’s big attorney brought two little attorneys with him to court and PG brought his briefcase (in later times, he would bring his computer, but this is an old story).

The bank presented its slam-dunk case and PG pointed out that the document the bank had required his client to sign referenced a specific statute number as its basis for repossession. That statute number referred to nothing. There was no statute with that number. The bank couldn’t enforce a non-existent statute against PG’s client.

The bank’s lawyer said that the bank clearly meant to reference another statute number that did exist. The little attorneys frantically paged through stacks of papers.

PG responded that the bank wanted to strictly hold his client to the detailed provisions in the loan documents and, in fairness, PG thought the bank ought to be held to the specific language it had included in documents PG’s client had signed. Contracts were sacrosanct, dammit.

Darned if the judge didn’t rule in favor of PG’s client.

The bank’s lawyer was very upset and said the bank would appeal. PG pointed out that, since this was a standard bank form, the bank had probably used the same document for thousands of auto loans. (It was a very big bank.)

An appeal would be a higher profile affair than a trial in a small courtroom with no one other than the parties and their attorneys in attendance. Did the bank want additional publicity about its defective documents and their imaginary statute?

Shortly thereafter, the bank dismissed its suit and released PG’s client from any claims.

So, there’s one war story about unanticipated consequences that can arise during a lawsuit.

 

 

Disruption in Publishing

12 June 2015

Lots of comments were generated by the post regarding his latest industry predictions from veteran publishing consultant Mike Shatzkin yesterday.

Among the comments to that post, Felix J. Torres said:

The biggest disruption is well on its way: the diminished importance of the BPHs. Best highlighted by the recent Nielsen fiasco.

And the only reason he doesn’t see the big guys bolting (yet) is because the decline has only now starting to hit their pocketbook.

But even when they do start to defect, that won’t be the kiss of death. The kiss of death has already been administered. It’s a slow acting poison but will kick in over time.

The BPH killer isn’t losing today’s Bestsellers, it’s losing tomorrow’s best sellers.

And no, they still don’t see that.

Perhaps PG has missed it, but he hasn’t seen anyone in legacy publishing acknowledge that authors are among the “customers” of traditional publishers. Of course, bookstores are also customers, but in the world of disruptive innovation, customers aren’t just people who pay you money for whatever physical stuff your business shovels out the door.

Traditional publishers would never think this way, but authors are their “customers” because authors are seeking someone to provide the service of replicating their books and effectively moving those books into the stream of commerce.

If Mike would learn about disruptive change, he would understand that disruptions often start with non-customers of the business being disrupted, then move on to the least-profitable customers and work their way up the food chain. One reason established businesses so ofen dismiss the dangers of disruptive change is that begins with customers the establishment doesn’t care about.

The mega-selling 1% of authors are the most profitable customers for the services provided by publishers. They will be the last to go in part because, like the best customers of any business, they get the best deals.

The financial arrangements bestsellers receive are much different than those included in standard publishing agreements. In standard agreements, the author receives a small portion of the money the publisher receives for the author’s books. A big publisher’s top-selling authors receive a significantly larger portion of the money the publisher generates from sales of their books, often in the form of a large advance, so large that it will almost certainly never earn out.

Treating their best and best-selling author-customers so well makes sense because those customers create so many highly-profitable sales for the big corporate media conglomerates. The only financially justifiable purpose for taking on a new author is the possibility that the new author might provide bestselling books. But, as in other industries, most new products fail, so publishers try to minimize the amount of money they spend on new authors because such authors are unprofitable or low-profit customers.

As Felix commented in yesterday’s post, publishers are primarily relying on the bestsellers they discovered yesterday for their profits and continued existence.

More and more of the bestsellers of tomorrow are indie publishing, utilizing Amazon, editors the authors hire, etc., to provide the “service” that publishers have historically provided. These indie publishing services are much less expensive for authors  than the competing services of traditional publishers paying traditional royalties.

In terms more closely related to disruption theory via Wikipedia:

In low-end disruption, the disruptor is focused initially on serving the least profitable customer, who is happy with a good enough product. This type of customer is not willing to pay premium for enhancements in product functionality. Once the disruptor has gained a foothold in this customer segment, it seeks to improve its profit margin. To get higher profit margins, the disruptor needs to enter the segment where the customer is willing to pay a little more for higher quality. To ensure this quality in its product, the disruptor needs to innovate. The incumbent will not do much to retain its share in a not-so-profitable segment, and will move up-market and focus on its more attractive customers. After a number of such encounters, the incumbent is squeezed into smaller markets than it was previously serving. And then, finally, the disruptive technology meets the demands of the most profitable segment and drives the established company out of the market.

PG found The Innovator’s Dilemma, the first of many books on the subject written by Harvard business professor Clayton M. Christensen to be quite readable. He suggests it is a crystal ball for the future of Big Publishing.

Up the Amazon with the BS Machine

1 June 2015

From author Ursula K. Le Guin via Book View Café:

Amazon and I are not at war. There are vast areas in which my peaceful indifference to what Amazon is and does can only be surpassed by Amazon’s presumably equally placid indifference to what I say and do. If you like to buy household goods or whatever through Amazon, that’s totally fine with me. If you think Amazon is a great place to self-publish your book, I may have a question or two in mind, but still, it’s fine with me, and none of my business anyhow. My only quarrel with Amazon is when it comes to how they market books and how they use their success in marketing to control not only bookselling, but book publication: what we write and what we read.

Best Seller lists have been around for quite a while. Best Seller lists are generated by obscure processes, which I consider (perhaps wrongly) to consist largely of smoke, mirrors, hokum, and the profit motive. How truly the lists of Best Sellers reflect popularity is questionable. Their questionability and their manipulability was well demonstrated during the presidential campaign of 2012, when a Republican candidate bought all the available copies of his own book in order to put it onto the New York Times Top Ten Best Seller List, where, of course, it duly appeared.

If you want to sell cheap and fast, as Amazon does, you have to sell big. Books written to be best sellers can be written fast, sold cheap, dumped fast: the perfect commodity for growth capitalism.

The readability of many best sellers is much like the edibility of junk food.

. . . .

I believe that reading only packaged microwavable fiction ruins the taste, destabilizes the moral blood pressure, and makes the mind obese. Fortunately, I also know that many human beings have an innate resistance to baloney and a taste for quality rooted deeper than even marketing can reach.

. . . .

But you can’t buy and read a book that hasn’t been kept in print.

Consistent in its denial of human reality, growth capitalism thinks only in the present tense, ignores the past, and limits its future to the current quarter. To the BS machine, the only value of a book is its current salability. Growth of capital depends on rapid turnover, so the BS machine not only isn’t geared to allow for durability, but actually discourages it. Fading BSs must be replaced constantly by fresh ones in order to keep corporate profits up.

. . . .

Once it’s less read and talked about the BS is no longer a BS. Now it’s just a book. The machine has finished with it, and it can depend now only on its own intrinsic merit. If it has merit, reader loyalty and word of mouth can keep it selling enough to make it worth keeping in print for years, decades, even centuries.

The steady annual income of such books is what publishers relied on, till about twenty years ago, on to support the risk of publishing new books by untried authors, or good books by authors who generally sold pretty well but not very well.

That idea of publishing is almost gone, replaced by the Amazon model: easy salability, heavy marketing, super-competitive pricing, then trash and replace.

Link to the rest at Book View Café and thanks to Loretta for the tip.

PG has read several of Ms. Le Guin’s books and enjoyed them, but must observe that “in print” is becoming less relevant by the day.

Indie authors don’t presently have and, PG believes, are unlikely to experience any problems keeping their books “in print.”

The only authors PG encounters who can’t find their books (or their royalties) are those yoked to traditional publishers whose minions regularly generate circumstantial evidence of substance abuse or dementia.

If you want to find what’s working, vibrant and innovative about the book world today, you’re advised to look toward Seattle rather than New York.

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