Royalties

Spotify’s Big Lie, Streaming Habits Mirror Purchasing Habits

24 April 2018

From Trichordist:

One of the biggest lies told by Spotify is that streaming will provide more revenue over the life of a record because every play will be monetized. This as opposed to the one time payment earned from a transactional purchase where all the revenue from the purchase of the record is paid at once. There is however, a very big problem with this theory, which is that the consumption curves of streaming match the consumption curves of transactional sales.

So, what about that so called long tail? Well, it doesn’t exist. Not for music consumption. Or we should say, it doesn’t exist any different for streaming than it did has for transactional sales. What do you think is more profitable in generating revenue? Is it the album sales of artists catalogs, or is streams?

Keep in mind, streaming is a fixed cap market. So it does not matter how much the market grows in actual consumption, the revenue is capped by the amount of revenue earned by the hosting provider. If consumption doubles, but revenues stay flat, every stream is worth half of what it was previously.

. . . .

We’re already seeing this trend as we noted earlier this year that Spotify per stream rates appear to be dropping steadily by about 8% per year.

Link to the rest at Trichordist

Kindle Unlimited Per-Page Rate Dips in March 2018 as the Funding Pool Increases

15 April 2018

From The Digital Reader:

While the Kindle Unlimited funding pool grew by 5% in March 2018, the per-page royalty did not.

. . . .

From Self-Publisher Bibel (please fill in the missing numbers):

  • US: $0.0045 (USD)
  • Germany: €0.0031 (EUR)
  • Netherlands, France, Spain, Italy: €0.0045 (EUR)
  • Canada: $0.0046 (CAD)
  • Brazil: R$ 0.0109 (BRL)
  • Japan: 0.5568 (JPY)
  • UK, Mexico, Australia, Canada, India: unknown

Link to the rest at The Digital Reader

The profits from publishing: authors’ perspective

27 March 2018

From The Bookseller:

Publishers’ figures show authors aren’t getting a fair deal.

. . . .

Authors’ incomes are suffering: a 2013 Authors’ Licensing & Collecting Society (ALCS) study showed professional authors’ typical annual income had fallen by 29%, to £11,000. ALCS is updating the study: we ask all authors to take part.

According to their own published data, the profit margins of the big corporate publishers are increasing. In 2008 Simon & Schuster Inc reported a profit margin of 9%; in 2016 it was 16%. Together, Penguin and Random House now record a margin of 16%, almost double what they recorded separately. You don’t just need to take my word for it. The Bookseller editor Philip Jones believes that trade publishing is now more profitable than it was, possibly by as much as third. That is a spookily similar figure to the 29% by which author incomes have fallen over a similar period. According to Jones, the average profit margin of a corporate publisher is now around 13%, where once it was 10%.

In the Publishers Association’s recent study The Contribution of the Publishing Industry to the UK Economy, consultancy Frontier Economics estimated that in 2016 £161m was paid to authors in advances, royalties and secondary rights revenue, and that the UK publishing industry’s turnover was £5.1bn, of which book sales contributed £3.5bn (69%) and sales of academic journals £1.2bn (24%). That means authors received around 3% of publisher turnover. Even if we take out journal revenue—where authors are, shockingly, paid next to nothing—authors were receiving less than 5% of turnover in the same year that (major) publishers’ profits were around 13%. (That turnover figure includes non-trade publishers, where margins are typically even higher).

. . . .

Society of Authors president Philip Pullman comments: “To allow corporate profits to be so high at a time when author earnings are markedly falling is, apart from anything else, shockingly bad husbandry. It’s perfectly possible to make a good profit and pay a fair return to all of those on whose work, after all, everything else depends. But that’s not happening at the moment. I like every individual editor, designer, marketing and publicity person I deal with; but I don’t like what publishers, corporately, are doing to the ecology of the book world. It’s damaging, and it should change.”

. . . .

Our experience shows that what publishers do pay is going to a smaller pool of authors. That is short-sighted. Figures from Nielsen BookScan, compiled by The Bookseller, show 5,093 authors had sales (not income, of course) more than £10,000 in 2017. Collectively, those authors accounted for 56% of the £1.59bn total books sold. So a big proportion of sales—44%, or £699m—came from authors with sub-five-figure sales. Publishers cannot ignore authors who net 44% of their sales, and authors cannot continue on the earnings they recoup from these sales: an EU study found the average an author earned from lifetime sales of each book was £6,000.

. . . .

“Working-class writers can’t afford to take up a career in writing, it is considered elitist and too risky. Families with uncertain incomes often expect their children to leave education earlier and to support them, and press them to get a ‘proper’ job rather than rely on writing.”

Link to the rest at The Bookseller

The Music Modernization Act Misses the Mark

26 March 2018

From Variety:

Three pieces of legislation that aim to update the ways that royalties are paid to songwriters and artists — the Music Modernization Act, the CLASSICS Act and the AMP Act — are going before Congress later this year.

. . . .

The Music Modernization Act (“MMA”) is an important piece of copyright legislation with the potential to benefit the music community, most important, songwriters and composers, who may finally receive just compensation for the millions of streams of their work fans enjoy and on which digital music services base their businesses. But the current draft fails to deliver on that promise.

As the MMA moves closer to a vote in Congress, those of us who have refrained from joining the cheering squad have had time to study its details and likely long-term consequences. The more we’ve looked at it, the more concerned we’ve become. While there are a good number of serious issues with the bill, its fundamental flaw is that it completely fails to accomplish one of its most important goals: ensure that all the writers whose music is played on digital music services get paid.

The idea sounds simple enough. The digital music services have agreed to pay for every stream of every song. There are ways to determine whose song is whose. The rate is all set. So what’s the problem?

The problem is that the major music publishers have seized this opportunity to attempt to tighten their tenuous grip on the music publishing business, using the MMA to install themselves as the gatekeeper for tens of millions of dollars in unclaimed royalties from digital music services, and, in effect appointing themselves as the sole judge and jury about who is entitled to be paid, how they will be paid, and even if they will be paid.

The publishers have gone so far as to claim that if the writer of a song doesn’t file a proper claim within 36 months of performance, 100% of the royalties from those streams will instead be paid to the top publishers (and some of their biggest writers) via the world’s largest “black box” of royalties. Really?

The music business is going through an unprecedented period of growth, fragmentation, and democratization. A new generation of writers is looking for new ways to get their music to market, and new business paradigms based on transparency and technology are being developed with and for them. Big music publishers still control a large portion of the business, but a global world of independent writers and publishers is beginning to challenge their dominance.

We won’t go into all the details of the MMA (it’s more than 100 pages long) except to say that the complicated organizational structure it establishes pretty much ensures that a big pile of money will end up in the black box, destined for distribution to the major publishers based on their market share. It is highly unlikely that the tens of thousands of independent self-published and unpublished writers whose music is performed on Spotify and other digital music services will ever get their fair share.

Proponents of the bill claim to have the support of the tens of thousands of music creators. We strongly believe that few, if any, of those writers understood the details of the bill or its implications when they were asked for support.

Link to the rest at Variety

Can Blocking Ads Help Artists?

22 March 2018

From The Trichordist:

In the fight for fair pay artists are not at war with the Internet or really even the streaming services, we are at war with the online advertising industry.   As we have demonstrated time and time again, subscription (paid) music streaming services pay at least 7 times the rate that the free services pay.   When you see artists (like myself) post absurdly low royalty payments it’s usually from one of the services that is predominately ad supported. Above is a chart that illustrates this nicely.

So for artists the solution seems easy:  get rid of ad-supported free tiers.  The problem is that in order to do away with these ad-supported tiers we have to fight not just the music streaming services but we have to fight the real power behind the throne:  the online advertising industry which is dominated by Google. Indeed all three ad supported services above rely on Google to serve their ads.

. . . .

So what would happen if most consumers decided to block ads?

First of all it’s not a question of if consumers will block ads but when.  Consumers have grown increasingly suspicious of the entire ad tech industry.  It’s not just the annoying banners, pop-ups and pre-rolls that slow down our browsing experience, consumers have finally become aware of the industrial scale data mining and spying operations used by the online advertising industry. These companies are tracking virtually every web page you visit and often know your physical location to within a few meters.

. . . .

While it’s relatively easy now to block pop-ups and banner ads it’s more difficult to block ads on Spotify and YouTube.   But it is doable (if a little clunky)  and it is only a matter of time before ad blocking technology catches up with the streaming services. Apple has announced its intention to allow ad blocking in the newest IOS.  It’s unclear if this will eventually block ads in Spotify and YouTube but most users would welcome it.

So what happens to artists if this happens?  If it becomes suddenly possible to block all ads?

In the short term artists would lose revenue.   But it is not as bad as you think.  If ALL the free streams on Spotify went away IMMEDIATELY artists would see their Spotify payments drop only 16%.

. . . .

YouTube is the biggest digital platform of all. Yet as a songwriter I received $12.87 from YouTube last quarter.  By my calculations YouTube paid all rights holders (label/publisher/songwriter) less than $340 for access to my catalogue.  YouTube revenue is not gonna save artists and or the industry at large.   I will barely miss it.  And YouTube is clearly inhibiting the growth of subscription services that pay higher revenues.

Link to the rest at The Trichordist

Audible is Paying Inexplicable Bonuses to Authors in Audible Romance

11 March 2018

From The Digital Reader

After news broke last week Audible was paying an abysmally low royalty rate for its romance audiobook service, Audible Romance, the audiobook retailer promised to patch the problem with a bonus, but wouldn’t give specifics.

The bonus payments have started to arrive, and we still don’t know any more than we did before.

. . . .

So far the reports from authors include:

  • I received my bonus. It was $140. I only made $5 in the program.
  • I got $25 and I had no minutes for the period.
  • I made one cent from two books and got a $25 bonus.

. . . .

While it’s great that Audible is making up for last quarter’s disastrous royalty payment, they still haven’t said anything about how they will fix the fundamental problem of the Audible Romance subscription service.

Link to the rest at The Digital Reader

PG says Amazon has rarely made a misstep when it comes to compensating authors, but he suspects more than one indie author (and way more than one voice actor) is mentally placing Audible on probation.

Audible’s product quality is also likely to take a hit as authors choose lower budget narrators like Uncle Harry, who was a shock jock in Los Angeles thirty years ago, still has a bunch of old recording equipment in the garage and promises not to do drugs before recording sessions.

Successful indie authors are entrepreneurial and will spend their time and effort where there’s a real payback.

Fair Royalties

10 March 2018

Independent Filmmakers for #FairRoyalties from Ballet Diesel Films on Vimeo.

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Link to the rest at Vimeo and thanks to Elizabeth for the tip.

How Indie Presses Are Elevating the Publishing World

13 December 2017

From Electric Lit:

Independent presses are a lifeline in the publishing world. At a time when large publishing houses are merging into even larger conglomerates, writers may feel like finding a home for their work requires a very specific, and at times corporate, mindset. But indies show that there’s another way. Via contests, open calls for submissions (for agented and unagented writers), and targeted requests, independent presses provide an alternate arena, making publishing more of a reality for marginalized artists and those with unique voices and writing styles. Plus, they’re getting more and more recognition.

. . . .

Jennifer Baker: In a world full of presses, why did you decide to create yours and what stands out about it that you saw lacking in the marketplace?

Rosalie Morales Kearns: I started Shade Mountain Press in 2013, and launched its first two books in 2014. Our focus is on literary fiction by women. As a feminist, I certainly am not surprised by the VIDA count and other research showing how underrepresented women are in terms of their work being reviewed in the major venues, winning literary awards, being taught in university classes, and being taken seriously in general. Living in a white supremacist culture, I’m not surprised that women of color are even more drastically underrepresented. But perhaps I had a utopian vision that the small press world was more egalitarian, more inclusive, etc. I learned how wrong I was when I was seeking a publisher for my short story collection Virgins & Tricksters. It ended up being published in 2012 by Aqueous Books, a woman-owned press. But before that, as I researched small presses, I kept coming across publishers that praised themselves for being willing to take chances on less commercial work. Then I’d look at their new and forthcoming lists, and see seven out of eight titles by men, nine out of ten titles by men, sometimes 100% of their titles by men.

. . . .

JB: What questions should authors be asking of their publishers in general? Authors may consider publication as that final step but there’s so much more to it.

RMK: Authors should get a really clear idea of their publisher’s timetable, and make sure that the publisher is intending to send out advance reader copies, in hard copy, in a sufficient number and in a timely way (four or ideally more months before publication date).

If the publisher is going to do a very light edit, they should be clear on that with the author, so that the author understands they will have to do various rounds of proofreading themselves. My press hires a professional proofreader, and I also do proofreading at later stages, when I’m working with the book designer and then when the file is converted to ebook format. All kinds of glitches can creep in in the layout stage and in the ebook stage.

The publisher should also be clear about how much of the publicity work will be on the author, and the author needs to realize that this could take a lot of time. As a publisher I take charge of creating copy for book jackets, for the press release, and for other promotional materials (frankly, a lot of authors just aren’t that good at describing their own work). Also I handle the work of identifying possible reviewers, querying them, following up, etc.. But that being said, it’s certainly a common practice at very small presses to let the authors create the copy and do the legwork in identifying and contacting reviewers. Small-press publishers have only so much time.

From Electric Lit

PG admits he’s biased in favor of authors.

If the CEO of a publisher is spending a lot of time proofreading, exactly what value is the author receiving from a publishing relationship that likely results in the publisher receiving most of the money the author’s book generates? Proofreading services can be obtained elsewhere at a lower price.

PG checked the websites of the three publishers featured in the OP and could not find any reference to the amount of compensation the writer would receive, a copy of the press’s standard publishing contract or any details of the proposed financial relationship between the publisher and the author.

Perhaps PG failed to learn that one of the foundational commandments of small presses is, “Thou shalt never talk about money.” Perhaps the target market for small presses (and large) is limited to authors who have day jobs or inherited wealth. Small presses might want to include a disclaimer or statement of purpose that says something like, “We serve authors who don’t need to earn much money from their writing.”

In the broader world of businesses that have financial relationships with individuals, it is customary for the business to provide detailed disclosures of the legal and financial terms of those relationships early on.

PG just did a Google search for credit card offers and near the top of the first page of a site he picked at random, the following appeared (you don’t have to read the whole thing):

The standard variable APR for purchases and balance transfers for the Citi ThankYou® Premier Card is 15.49% – 24.49% based on your creditworthiness. Balance transfers must be completed within 2 months of account opening. The standard variable APR for cash advances is 26.24%. The variable penalty APR is up to 29.99% and may be applied if you make a late payment or make a payment that is returned. Minimum interest charge – $0.50. Annual fee – $95 for each primary cardholder. However, the annual fee is waived for the first 12 months. Fee for foreign purchases — None. Cash advance fee — either $10 or 5% of the amount of each cash advance, whichever is greater. Balance transfer fee — Either $5 or 3% of the amount of each transfer, whichever is greater. New cardmembers only. Subject to credit approval. Additional limitations, terms and conditions apply. You will be given further information when you apply.

In the nature of such disclosures, the writing style of Citi’s attorneys leaves a bit to be desired, but you see numbers there right on the website and you’ll see more numbers provided for anyone who applies before they accept the agreement.

If a publisher, small or large, is soliciting manuscripts, what’s wrong with a simple financial disclosure? On the website?

Here’s a start for such a disclosure:

  1. Royalties payable to the author will be:
    1. Hardback editions – 10% of the suggested retail price for the first 5,000 copies sold and 15% of the suggested retail price for additional copies sold thereafter.
    2. Paperback editions – 8% of the suggested retail price for all copies sold.
    3. Ebook editions – 25% of the net amount received by the publisher.
  2. Royalties will be paid to the author every six months.
  3. In the event unsold books by author are returned to the publisher for credit or reimbursement or amounts received by publisher are subject to chargebacks with respect to unsold or returned books, royalties shall not be payable to author for such books. If royalties have already been paid with respect to unsold or returned books, future royalties payable to the author will be subject to chargebacks for overpayment of royalties in prior periods.
  4. Absent unusual circumstances, the maximum advance for a first book will be limited to $500.00.
  5. The average royalty payments received all of publisher’s current authors total less than $250 per year.

PG also noted some discrepancies in the state of the publishing industry described by the publishers described in the OP.

Shade Mountain Press cited “the VIDA count and other research showing how underrepresented women are” in the book business.

On the other hand, 7.13 Books states:

This is what we know: Big Five publishers are more or less the only way for writers to get a book advance large enough to resemble a living annual wage. What is not commonly known is that the Big Five announce roughly 160 such deals a year for debut authors of literary fiction, which does not include Sci-Fi, YA, Thrillers, etc. (Not all are announced)

Here’s what is also not commonly known:

– 75% of those announced deals were given to female writers. Out of 320 debut deals given by Big Five publishers and their imprints in 2015 and 2016, only 84 were given to authors who identified as male and one to an author who identified as transgender. If you are one of the thousands upon thousands of non-female writers with a novel or story collection manuscript, you’ll be fighting for one of what appears to be roughly 40 new deals annually. A rather large inequity that pretty much no one talks about.

– 30% of the debut deals were given to writers who live in NYC (the city represents 2.6% of the total U.S. population). A rather large inequity that almost everyone talks about.

– Under 25% of those debut deals were given to writers with MFAs. According to The Atlantic, 3,000-4,000 writers graduate from MFA programs each year.

To recap: thousands of new writers each year for 160 new spots.

PG is feeling underrepresented, so he will stop blathering now.

Why Everyone Is Mad at Patreon Now

9 December 2017

From Gizmodo:

Over the past four years Patreon has grown to become the de facto funding model for independent creators online—a platform where supporters pledge small monthly recurring donations that better support an enduring career instead of the need Kickstarter or GoFundMe’s per-project setup fills. But an overhaul of its fee structure announced yesterday has creators furious and patrons leaving in droves.

. . . .

Patreon—which supports YouTuber channels like Binging With Babish($11,000/month), animators like David Firth of Salad Fingers fame ($10,000/creation), and podcasts like Chapo Trap House ($87,000/month)—has long relied on a simple financial arrangement that allowed creators to receive a lump sum at the beginning of each month. Of course, that paycheck might vary somewhat because creators were obligated to eat payment processor fees in addition to the 5 percent take the platform shaved off the top.

The new structure—and why everyone is so angry—passes those processor fees on to patrons instead.

“Starting on December 18th, a new service fee of 2.9% + $0.35 will be paid by patrons for each individual pledge,” the company’s announcement post reads. “Streamlining these fees for creators and patrons ensures that creators take home as much of their earnings as possible.”

Sure, that math checks out—until you factor in a mass exodus of pledge-makers.

Link to the rest at Gizmodo and thanks to Maggie for the tip.

Kindle Unlimited is not here to Make Friends

3 November 2017

From author  and TPV regular Gene Doucette:

I want to talk a little about an Amazon service called Kindle Unlimited, because it’s complicated and interesting, and is increasingly the primary discussion subject among authors (of the indie variety) and not for a lot of really good reasons.

Here’s the summary, from the reader’s perspective: Kindle Unlimited (KU) is a subscription plan whereby a subscriber can, for $9.99 a month, read as many books as they want. (This is sometimes described as ‘ten books a month’ but this is inaccurate. A subscriber can only rent as many as ten books at one time, but that just means when they have ten books in their kindle they have to return one before picking up another. There’s no limit on the number of times they do this.)

Here’s what KU means from the author’s perspective: in order to be available in KU, a book has to be enrolled in KDP Select. (I apologize for the acronyms, but it’s not really my fault. KDP is ‘kindle direct publishing’ and it’s the name of the program authors use to publish to Amazon. All of us use KDP.) Being enrolled in Select means having access to a few perks aside from KU, but I won’t get into them here, because they’re not relevant to this conversation. What is relevant is this: if your book is enrolled in KDP Select, it cannot be published elsewhere.

I’m going to repeat that, because it’s important.

If you are selling an ebook through Kindle Unlimited, you can’t also sell it—as an ebook—anywhere else. Amazon will certainly still sell it (so you can get sales as well as KU downloads) but the marketplaces at Kobo, Nook, Apple, Google Play, Overdrive and so on can’t carry it.

. . . .

Since KU is a subscription model, users aren’t buying a copy of an ebook. (Side note: nobody who ‘buys’ one really is, either, but we’re not going to go down this road today.) They’re renting it, reading some or all of it, and returning it, and they aren’t paying whatever the cover price is for that right. Instead, Amazon collects monthly fees, puts them into a pool, maybe throws a few million extra in to boost that pool (more on this later) and then distributes it to the authors who participate in the program.

This means all of the authors are sharing in the same pool every month, where the amount in that pool varies based on how many subscribers there are, plus the aforementioned funds Amazon tosses in to boost the total.

How these funds are doled out has changed over time. The first version Amazon tried counted up the number of titles in KU that were downloaded and read to at least the 10% mark, divided the cash pool by that number, and paid everyone using this calculation. So for instance, if the math resulted in every ‘read’ getting $1.43, and an author had 10 reads, the author got $14.30 that month.

This system ended up promoting short books. People who published short stories got paid just as much as people who wrote full novels, so why write full novels? Or, why publish full novels in single installments, when one book broken into five parts could be five times as profitable?

This created a marketplace that turned off a decent percentage of readers, and so Amazon changed the way they paid authors to a system that counted actual pages read.

You probably heard something about this, because a number of hysterical articles came out when it happened. Most of those articles failed to distinguish between KU authors and all other authors, so that it sounded like Neil Gaiman and Stephen King were getting money by-the-page from the largest bookseller in the country.

KU2 (as it was called) rewarded longer works, which had the immediate positive effect of altering the Unlimited marketplace in a way that made Amazon’s subscribers happy. (Side note: this is always Amazon’s first goal. More on this later as well.)

. . . .

There are some questions that should arise naturally from the above description.

1: What is a page?

This is a simple and yet remarkably complicated question, because we’re talking about electronic books delivered to a wide range of devices with different screen sizes to readers who have the ability to adjust font sizes.

There’s no such thing as a ‘page’ in an ebook, essentially, and so Amazon had to invent a standard. They did, and it’s called Kindle Edition Normalized Page Count (or KENPC, and yay, a new acronym).

KENPC is enormously important, because the KENPC total for your book dictates how much you’re getting paid for a full read. It’s also calculated using a formula Amazon doesn’t share, which means there are now several hundred pages on Internet message boards consisting of writers trying to figure out that formula.

. . . .

2: How does Amazon count pages read?

( Note: Amazon doesn’t discuss this very much, so most of what follows is a combination of known things and best guesses. Feel free to call me on any detail you’d like to in the comments.)

Before dealing with how Amazon counts pages read, let’s talk about one of those things Amazon provided to customers because—again, the customer experience is the biggest thing for them. There’s a feature on Kindles called Page Flip. It allows users to essentially go up a level and skim across several pages at a time. This is so readers can navigate from one part of a book to another quickly, in the same way they would if they were browsing a physical book. This will be important in a second.

There have been multiple iterations of page reads. At first, Amazon simply recorded the last page a reader reached on whatever device they’re using. (Variant: the last page when the device was last synced with Amazon via WiFi connection. Some believe if a reader reaches the last page and then goes back to the beginning and then syncs, the pages won’t count.) They decided to adjust this approach, about a year ago, and that adjustment resulted in a lot of authors losing a lot of pages read more or less overnight.

What did they change? Best-guess, they started counting ‘pages read’ as ‘pages reached outside of Page Flip’. So, for instance, if a reader only wants to read the sex scenes in a book and uses page flip to get to those scenes, the author is only getting paid for however many pages that sex scene took up, and not the ones between.

As I said, this is not a known thing, it’s a best guess, but it’s (in my opinion) a good one given what has happened since: authors are reporting that some customers are reading entire books in Page Flip mode, and therefore costing them reads.

Amazon has stated that Page Flip is meant as a navigational tool, not for regular book consumption, but on some large devices the pages look big enough in that mode to be readable. Amazon’s also said that pages reached in Page Flip do not count toward the pages-read total, and further that it’s not significant enough to impact the totals.

. . . .

I’m surely going to get called an apologist for Amazon here, but look: I’ve been a part of the self-publishing marketplace since 2014, and it has not looked the same for more than six months at any point. It is constantly evolving. I can absolutely appreciate everyone upset that the money they’re getting paid per page has settled down to around $0.004 when it was $0.005 not so long ago, but this doesn’t mean Amazon is stealing money from you. It couldmean they have a lower limit to how unprofitable they are okay with KU being (note: Kindle Unlimited is not profitable, that’s why Amazon keeps throwing money in the pool) and are holding it there. It could mean sales across Amazon are down, or across the entire industry are down. It could mean a whole lot of things.

Link to the rest at Gene Doucette

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