Royalties

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

How Spotify (and others) Could Have Avoided Songwriter Lawsuits, Ask The Labels.

5 September 2017

From The Trichordist:

Spotify could have completely avoided its legal issues around paying songwriters.  The company could have sought to obtain the most recent information about the publishing and songwriters for every track at the service.  The record labels providing the master recordings to Spotify are required to have this information. All Spotify (and others) had to do, was ask for it.

Here’s how it works.

For decades publishers and songwriters have been paid their share of record sales (known as “mechanicals”) by the record labels in the United States. This is a system whereby the labels collect the money from retailers and pay the publishers/songwriters their share. It has worked pretty well for decades and has not required a industry wide, central master database (public or private) to administer these licenses or make the appropriate payments.

This system has worked because each label is responsible for paying the publishers and songwriters attached to the master recordings the label is monetizing. The labels are responsible for making sure all of the publishers and writers are paid. If you are a writer or publisher and you haven’t been paid, you know where the money is – it is at the record label.

Streaming services pay the “mechanicals” at source which are determined by different formulas and rules based upon the use. For example non-interactive streaming and web radio (simulcasts and Pandora) are calculated and paid via the appropriate performing rights society like ASCAP or BMI. These publishing royalties are treated more like radio royalties.

. . . .

Every physical album and transactional download (itunes and the like) pays the “mechanical” publishing to the record label directly, who then pays the publishers and writers.  This publishing information exists as labels providing the master recordings to Spotify have this information. All Spotify (and others) have to do, is ask for it.

Link to the rest at The Trichordist

PG says the system doesn’t sound all that simple, but he’s not in the music business.

Erotica publisher, author charged for manipulating book sales

17 June 2017

From the Weld County District Attorney:

A Johnstown woman who publishes and writes romance novels is facing nearly two dozen charges after altering her clients’ book sales and pocketing the stolen royalties.

Jana Koretko was arrested and charged Monday with five counts of money laundering, four counts of felony theft, nine counts of computer crime and three counts of tax evasion.

According to the arrest affidavit, Koretko owns JK Publishing, primarily exclusive to romance and Erotica authors, and is accused of stealing more than $125,000 from multiple clients over a two-year period.

The Weld County District Attorney’s Office was first notified of the alleged scheme in August 2015 when one of the company’s authors noticed several discrepancies in her royalty payments. After further investigation, authorities learned Koretko was manipulating the monthly and quarterly sales reports from E-book retailers, like Amazon, iTunes, Barnes and Noble and Kobo, to indicate lower sales.

In some instances, she even inflated or exaggerated book sales to make the authors believe the novels were doing well or becoming bestsellers.

Over the course of the investigation, 15 authors were identified as victims in Koretko’s alleged scam. It was also determined she under-reported book sales by more than 10,000 books, resulting in more than $125,000 in royalty losses to her clients.

Link to the rest at Weld County District Attorney and thanks to Kris for the tip.

PG never thought about criminal prosecution for publishers who cheat their authors.

He really likes the idea.

As celebrity books boom, professional authors are driven out of full-time work

7 February 2017

From The Guardian:

Despite scoring three bestsellers in five years and a clutch of awards, The Spinning Heart author Donal Ryan has been forced to return to his day job in the Irish civil service in order to pay his mortgage.

Ryan has become the latest casualty of tumbling incomes for writers. Despite receiving advances and signing a deal to write three more books with his publisher, the Irish novelist said he had found it impossible to earn a living wage as a full-time writer.

. . . .

Saying his earnings amounted to about 40 cents per copy sold, he told the newspaper he had taken a job in the Workplace Relations Commission.

. . . .

Ryan’s decision came as children’s authors hit out at celebrity children’s books. Tales of Terror author Chris Priestley told the Bookseller that professional authors were finding it hard to compete for advances and shelf space. “It’s a tricky time in publishing at the moment,” he said. “I met a lot of writers last year who were having a hard time and in negotiations they were finding it harder to get the advances they got a couple of years ago.”

Priestley said that while the market was tough for all writers, celebrities were at an advantage competing for book deals. “It seems as though if you’re a celebrity you can just express the idea you would like to do a book – like [radio DJ] Christian O’Connell did on Twitter – and you will get a deal. I still have to pitch my books.”

In the last two years comedians and YouTubers have rushed into the market, some signing six-figure deals, while professional authors’ advances slipped to as low as three and four figures. Adding “children’s author” to their CV are the likes of David Walliams, Russell Brand, Danny Baker, Frank Lampard and Pharrell Williams.

CJ Daugherty, who writes thrillers for young adults, claimed ghostwritten children’s books risked undermining readers’ trust. “We can tell ourselves that readers must know a C-List celebrity, famous for opening makeup boxes on YouTube, isn’t capable of writing an 80,000-word novel,” she told the Bookseller. “But the whole system seems designed to fool people into thinking they are.”

Author and children’s book critic Amanda Craig told the trade magazine: “It’s distasteful [that] celebrities and their agents seem to think publishing a novel is a way to use their brand to make more money and, with the exception of David Walliams, they’re not very good.”

Link to the rest at The Guardian and thanks to Dave for the tip.

Survey Indicates Indie Publishing is Pot of Gold for Some, Work in Progress for Many

13 December 2016

From author Marie Force:

Survey responses from nearly 2,000 indie authors, half of them entirely indie published, give insight into the industry and advice on how indie authors can make a better success of their business. Marie Force, the New York Times-bestselling hybrid author of more than 30 indie-published titles, conducted the survey through Survey Monkey with questions developed by Marie with input from many other indie authors. It was widely publicized through indie author groups and social media. Nearly 90 percent of responding authors were female, the majority between the ages of 41 and 50. More than 60 percent of respondents identified a subgenre of romance as their primary genre. Five percent were science fiction authors, five percent were mystery/thriller authors and four percent were fantasy authors. The survey was live from Oct. 8 to Nov. 8, 2016.

When asked the reason for taking the indie publishing path, authors cited greater revenue as their primary reason followed by greater product control. Conversely, their greatest frustrations with being indie authors are the perceived lack of a level playing field on the retail platforms and industry instability. However, 29 percent reported they are indie authors because the frustrations are minimal. More than half the respondents say the biggest benefit to being an indie author is agility and the ability to pivot when needed.

. . . .

When asked the reason for taking the indie publishing path, authors cited greater revenue as their primary reason followed by greater product control. Conversely, their greatest frustrations with being indie authors are the perceived lack of a level playing field on the retail platforms and industry instability. However, 29 percent reported they are indie authors because the frustrations are minimal. More than half the respondents say the biggest benefit to being an indie author is agility and the ability to pivot when needed.

. . . .

On an average day between releases, 1543 authors, or 49 percent of those surveyed, report selling between zero and five books while on the other end of the spectrum 8 authors, or 0.43 percent, report selling more than 1,000 books on an average day between releases with another 13 authors, or 0.69 percent reporting selling more than 500 books on an average day between releases. In an average month between releases, 608 authors or 33 percent, report making between zero and fifty dollars on their books. On the opposite end, 15 authors or 0.80 percent, reported making between $30,001 and $40,000 in an average month with no new releases, with 15 others reporting revenue in the higher ranges, and 1 reporting average monthly revenue in excess of $500,000. The numbers increase during release months with most reporting income at $10,000 or below for new releases. At the upper end, 18 authors reported release month income exceeding $100,000.

Link to the rest at Marie Force Blog

Here’s a link to Marie’s books. If you like an author’s post, you can show your appreciation by checking out their books.

The KU Conundrum

11 December 2016

From author Ruby Madden:

I’m re-assessing how I run my publishing business for 2017 and wanted to share some of my frustrations as an Author.

Recently, many authors have noticed that over the last few months, the pages-read numbers for our eBooks that are borrowed at Amazon and read, have decreased dramatically. Some say it is just a slump resulting from an Election Year. Others say that something is amuck with Amazon’s pages-read reporting system that lets us know how many pages were read for stories that we have enrolled in the Kindle Unlimited (KU) program.

. . . .

Up until Oct, Nov, & Dec – I was pleased. But something has shifted and many authors have been left scratching our heads. Our pages-read numbers (how we earn money from the KU program) are seriously decreased. Many of us have been in the indie publishing business for a while now and we are savvy about using reporting and tracking programs to understand the trends. We know when book-buying or borrow-reading tends to be at its best and worst. We plan ahead with publishing dates, marketing & advertising campaigns. Like any business, some times are better than others.

. . . .

So, I have a favor to ask…

Amazon listens to their customers. They don’t quite seem to value their content providers (writers & authors) as much as they do their customers. Would  you be willing to send an email and express your concern as a reader? Here, I’ll make it easy. Here is a cut & paste letter you can copy and amend:

Dear Jeff & Amazon,

I’m a customer of yours who likes to read and buy and/or borrow eBooks from your website. Over the last couple of months, I’ve heard concerns from authors whose books I read, that they are experiencing an atypical decline, overall, in the pages-read numbers for their stories that are in KINDLE UNLIMITED (KU). 

They’ve shared that they have contacted KDP support and are being provided unsatisfactory responses or cookie-cutter type replies.

It’s important to me that authors are fairly compensated for the work and content they provide. As entertainers, they are important to society and deserve to regarded with respect. I enjoy the books they enroll in KINDLE UNLIMITED and I’m concerned that they will start to pull them out of the KU program. 

Can you please look further into this matter and research it? 

Kind Regards,

Your Name

EMAIL to send to:

jeff@amazon.com; ecr-kdp@amazon.com

Link to the rest at Ruby Madden and thanks to SFR for the tip.

Here’s a link to Ruby Madden’s books. If you like an author’s post, you can show your appreciation by checking out their books.

UPDATE: PG has received several emails, including links to online discussions, claiming that Ms. Madden has not paid royalties for some boxed sets she has published that include works by other authors.

PG is not acquainted with Ms. Madden and has no personal knowledge about these matters, but felt an obligation to update in light of the warnings he received.

Canada’s Access Copyright predicts 55% royalty drop in 2017

14 November 2016

From The Bookseller:

Canadian national organisation Access Copyright is warning creators and publishers that 2017 royalties could fall by as much as 55% due to a reduction in revenue from the educational sector.

Access Copyright represents tens of thousands of Canadian writers, visual artists and publishers and their works, to license the copying of content to educational institutions, businesses and governments, among others.

The organisation estimated the amount it pays to creators will fall from $11m to $5 next year, according to Canada’s book trade monthly the Quill and Quire.

The drop in educational revenues for Access Copyright and the creators it supports is down to the introduction of an expanded definition for “fair dealing” in Canada’s copyright laws. In 2012, the Supreme Court of Canada issued five rulings in a single day ultimately changing how fair dealing is assessed, meaning schools could rely more heavily on fair dealing for photocopying that takes place on campus and in the classroom. With licences becoming less necessary, the result is less money from Canadian schools to copyright holders.

Roanie Levy, executive director at Access Copyright, told the Quill and Quire that its 2017 payout to creators would be 80% less than it distributed in 2013, when copyright holders received $23.5m.

Link to the rest at The Bookseller

Harry Shearer Files $125 Million ‘Spinal Tap’ Fraud Suit, Copyright Termination

19 October 2016

From The Hollywood Reporter:

For a Hollywood accounting case, this one is an 11.

Harry Shearer has launched a $125 million fraud and contract-breach lawsuit against Vivendi and StudioCanal over the 1984 rockumentary classic This Is Spinal Tap. The complaint, filed Monday in California federal court, is packed with enough nuggets to instantly make this a must-watch “Hollywood accounting” case. Through the lawsuit, Shearer also reveals he is attempting to claw back rights to the film and its continually popular soundtrack.

Shearer, perhaps best known for the 23 characters he voices on The Simpsons, co-created the semi-fake band Spinal Tap in the 1970s with Christopher Guest and Michael McKean. The film, directed by Rob Reiner and featuring Shearer as bassist Derek Smalls, was produced and released by Embassy Pictures. After a series of transactions, rights to Spinal Tap landed in the hands of Vivendi, the French conglomerate that once had the ambitious goal of becoming one of the largest studios in the industry.

Despite the film’s legacy and Spinal Tap’s enduring success as an actual band able to sell out arenas, Shearer’s company Century of Progress Productions alleges that the four lead creatives have received just $81 in merchandising income and $98 in musical sales income in the past three decades from the franchise.

. . . .

“The accounting between the Vivendi subsidiaries is not at arm’s-length, is anti-competitive, and deprives the TIST creators of a fair reward for their services,” states the complaint.

With other accounting improprieties alleged, such as undocumented marketing expenses and improper deductions, Shearer’s lawsuit references the Copyright Act’s termination provisions, which allow authors to cancel grants and regain rights after 35 years.

“Particularly given that Vivendi has offset fraudulent accounting for revenues from music copyrights against equally dubious revenue streams for film and merchandising rights also controlled by Vivendi subsidiaries, Shearer is concurrently filing notices of copyright termination for publishing and recording rights in Spinal Tap songs he co-wrote and co-recorded, as well as in the film itself,” states the complaint.

That means that Vivendi would potentially lose rights to This Is Spinal Tap in 2019. Copyright termination has been a big subject in the music industry, but is only beginning to impact the film business.

. . . .

Shearer’s company says that in 2013, in anticipation of the film’s 30th anniversary, it commissioned a study of accounting statements and revenue streams that “first discovered that Vivendi had engaged in a pattern of anti-competitive and unfair business practices, had abandoned enforcement of valuable TIST rights, and had willfully concealed and manipulated years of accountings to retain monies due and owing to Plaintiff.”

Link to the rest at The Hollywood Reporter and thanks to Meryl for the tip.

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