Royalties

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.

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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.

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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.

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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.

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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

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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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Celebrity book advances: How much stars got paid to write

13 October 2016

From News.com/AU:

Celebrities can get paid staggering amounts of money to write books.
Stars typically receive a handsome advance which is like a signing bonus that the author receives before the book is published.

As Brian Klems from The Writer’s Digest explained, an advance is “paid against future royalty earnings, which means that for every dollar you receive in an advance, you must earn a dollar from book sales before you start receiving any additional royalty payments”.

. . . .

  • Tina Fey, Bossypants (2011). Advance: $US6 million
  • Amy Shumer, The Girl with the Lower Back Tattoo (2016). Advance: $US9 million
  • Keith Richards, Life (2011). Advance: $US7 million

Link to the rest at News.com/AU and thanks to Dave for the tip.

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Spotify Seeks to Fine-Tune Music Rights as It Gears Up for IPO

25 August 2016
Comments Off on Spotify Seeks to Fine-Tune Music Rights as It Gears Up for IPO

From The Wall Street Journal:

As Spotify AB gears up for a potential initial public offering next year, the music-streaming service is missing one key component in its pitch to investors: rights to play the music in years to come, according to people familiar with the matter.

Spotify is now operating on short-term extensions of its old contracts with all three major record companies, having been on a month-to-month basis with at least one of the labels for nearly a year. It is negotiating new deals that would make its finances more attractive to investors.

Spotify, which saw its net loss increase to roughly $200 million last year even as revenue doubled to more than $2 billion, wants to pay a smaller share than the nearly 55% of its revenue that it currently pays to record labels and artists, according to people familiar with the matter.

It pays roughly an additional 15% to music publishers and songwriters.

But some major label executives want Spotify to pay them as much as 58% of revenue from both its free and paid tiers. That is what Apple Inc. pays for Apple Music subscribers who aren’t on free trials, people familiar with the matter said. Apple has more than 5 million users on free trials, they said.

. . . .

The licensing disagreement highlights the tricky relationship between Spotify and the major record labels, which all took minority stakes in the Swedish outfit as part of their initial licensing deals. As investors, the labels have a direct interest in seeing Spotify succeed, while they are also counting on subscription streaming in general to make up for a long decline in record sales. Paid services yield far more per user than ad-supported ones, and Spotify is the world’s biggest subscription service, with double the 15 million paying subscribers that one-year-old Apple Music has.

But the labels and Spotify don’t see eye to eye on some fundamental issues. In addition to what Spotify should pay for the music, record companies and their artists have also butted heads with Spotify over its practice of making its entire 40 million-song catalog available to both free and paid users at the same time. Pop star Taylor Swift, British singer Adele and rocker Gwen Stefani are among the artists that have withheld albums from Spotify because they didn’t want to make them available on the free tier, where users can listen to entire albums, playlists or artist catalogs in a random order they can’t control.

Link to the rest at The Wall Street Journal (Link may expire)

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What’s a masterpiece worth?

1 July 2016

From Amadis of Gaul:

When Garci Rodríguez de Montalvo wrote his version of Amadis of Gaul, he probably wasn’t thinking of payment. In medieval times, writing was either a gentlemanly avocation or a vocation sponsored by a gentlemanly patron. Books were hand-copied, so literature couldn’t be commercialized. Montalvo was a gentleman whose occupation was managing the city of Medina del Campo near Valladolid.

But only a century later, the printing press had come into being and had turned books into an affordable mass commodity. Miguel de Cervantes wrote Don Quixote de la Mancha, a parody of books like Amadis of Gaul, for money. Writing had become a profession, and professionals got paid.

What did Cervantes earn for Quixote? We don’t know, but we have enough clues to try to guess. Cervantes was poor before it was published and poor after it was published, so it wasn’t a huge amount of money. Everyone agrees on that.

. . . .

Don Quixote de la Mancha was published in two parts, the first in 1605 and the second in 1615. Cervantes didn’t plan on a second part, but after another author wrote a continuation, he decided to write his own.

In 1604, Cervantes was 50 years old and living in Valladolid. He had written a short story about Don Quixote, and he presented the idea of a novelization to publisher Francisco de Robles, who agreed and urged Cervantes to get it ready fast. Then the book was hastily edited (which explains the many errors in the text), printed on cheap paper with worn type, and rushed to the market.

Probably no one considered it a universal masterpiece at first, but the first edition of 1,000 copies sold well — in fact, it was immediately pirated in Lisbon. Cervantes had already won notice as a playwright, and this book cemented his reputation as a major writer.

He had received a 10-year royal privilege to print Don Quixote, which he sold to Robles for an unknown amount; the paperwork was lost. But he had sold an earlier novel, La Galatea, to Robles’ grandfather for 1,336 reales, of which he eventually only received 1,086.

Nieves Concostrina, a journalist with Radio Nacional de España, reported in the series Acércate al Quijote that he received no more than 100 ducados (which equals 1,100 reales or 37,500 maravedíes) for the copyright, which she estimates is worth only about €200 today.

Daniel Eisenberg, the former editor of Cervantes, the scholarly journal of the Cervantes Society of America, wrote that he probably received 1,500 reales (51,000 maravedíes), which he says would have been worth 500,000 pesetas in 1992, or €5,503.72 today. That’s better, but no J.K. Rowling.

Link to the rest at Amadis of Gaul and thanks to MKS for the tip.

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On the True Costs of Bargain Books, Or Guilting Readers Because Authors Signed Bad Contracts

10 June 2016

From The Digital Reader:

James Mayhew has taken up the cause of trying to guilt, harangue, or otherwise convince readers to overpay for books from legacy publishers.

About a month ago (I just now found it) Mayhew published a post where he argues that fans should not buy bargain price books because an author’s royalties are slashed as the price drops.

So how does it all work? Authors get paid royalties, which are a percentage of the book price which you may (or may not) earn from books sales, usually around 5-10% of the price, but very often less; most books are discounted in any case, and the royalty shrinks accordingly. In simple terms, you would expect to get between 50p and £1 for each hardback book sold (and less on a paperback). This is completely normal, and I have no complaints, although it’s often a shock to people.

What happens when books get discounted further? Subject to contractual terms, the royalty may shrink on cheaper books. So you end up getting a tiny % of an even smaller amount. We are talking pennies. Once upon a time there was a system called the Net Book Agreement, limiting the extent to which books could be discounted. But that was abandoned in favour of a “free market” years ago. The result? books can be reduced to next to nothing.

But increasingly, publishers broker cold, hard, cynical deals with these people and then print to order. The publisher is complicit in the arrangement and sells books at extremely low prices (less than 50p per book) to the discount catalogue (but not at a loss to themselves) who then sell them on at a very nice profit – usually £1 per book. Tens of thousands of copies. And the author? I get less than 4p a book, while the discount company makes millions every year. …

. . . .

Authors and publishers might see things differently, but what I see here is an author who is trying to guilt readers over the price they pay for books.

That is a pretty obnoxious behavior, but it gets worse when we look at it sideways. That’s when we realize that the real issue here is not the price of the books but the contract terms Mayhew agreed to. He’s trying to make readers responsible for his, and other authors’, bad business decisions.

Link to the rest at The Digital Reader

That’s just the strategy for attracting more book buyers – make them feel guilty for doing so when books are discounted.

PG suggests that when indie authors are talking to readers, in addition to thanking them for buying the author’s books, it might be a good idea to let the readers know that when they buy indie ebooks on Amazon, in many cases, most of the money goes directly to the author. That’s why Amazon is such a great friend to authors and readers.

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