Fat horses & starving sparrows

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From Overland:

In the last major survey, conducted by Macquarie University researchers in 2015, Australian authors were found to earn an annual average of just $12,900 from their writing work; the median, at $2,800, is even more concerning. In the UK, which has better longitudinal data, earnings of professional writers have dropped 42 per cent in real terms between 2005 and 2017, according to the Authors’ Licensing and Collecting Society. In that same time, the proportion able to make a living solely from writing work fell from 40 per cent to 13.7 per cent. The jobs at newspapers and magazines that used to so often be relied on to bolster book earnings have largely evaporated. Many of us know people who have lost their writing jobs, or who are just barely clinging on.

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Let’s start with ‘free is not fair’, the catchy slogan of a campaign led by the Copyright Agency, which has been used to argue against the proposed adoption of a ‘fair use’ exception to copyright. For those who haven’t been following, there has been fierce debate over whether Australia ought to adopt a flexible exception to copyright infringement that would permit, without payment, any kind of use, so long as it’s ‘fair’. This is already the law in countries such as the US, with ‘fairness’ determined by taking into account all relevant factors, including the effect of the use on the potential market for or value of the copyright material.

Many people claiming that ‘free is not fair’ know a lot about copyright. They know that our law has permitted, for over a century, fair use for purposes such as research, criticism/review and news reporting. And, unless you think you should pay for every use of every copyrighted thing – for example, every time you access a webpage, use a search engine, forward an email or retweet a photo – you know free can be fair. The slogan even contradicts itself, since under a fair-use exception, if the use of a work for free is not fair, it wouldn’t be permitted. That is the entire point. Thus ‘free is not fair’ is textbook bullshit.

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However well intentioned these claims might be, they sell authors short. The reasons why can be found in the two fundamental rationales for granting copyright in the first place. The first is to incentivise the creation of works, thus helping achieve the social benefits that flow from widespread access to information and culture. On top of that, copyright aims to reward authors: to secure them an additional share of the benefits arising from their creations, in recognition of their contributions of personality and labour.

To give effect to these aims, authors and publishers should be able to share between them the rights necessary to incentivise their investments in creating and distributing cultural works. But the rewards share – everything beyond that – is justifiable only for authors: the people who actually created the work.

Right now, Australian copyright law is designed to make it as easy as possible for investors to extract the entirety of authors’ copyright interest – not just the incentives component, but the additional rewards part as well. We call this a laissez-faire approach, French for ‘let people do as they choose’, but here better described as the freedom to sign away your rights, before anyone knows what the work is worth, often in exchange for not much at all.

I know a woman, ‘Kate’, who recently sold her book to a Big Five publisher for less than $1,300. The publisher extracted every right to every payment, worldwide, forever, leaving the author with zero entitlement to future royalties (even if the book becomes a surprise bestseller), or any licensing fees that might be paid for use of the book in schools or universities. Kate even lost her statutory right to compensation for use in libraries, since one’s claim to these payments depends on having an ongoing right to royalties.

That such a deal would be offered and agreed to won’t surprise anyone who has worked in or studied creative labour markets. As cultural economist Ruth Towse explains, commercial players in creative industries take advantage of the structure of artists’ labour markets and exploit their willingness to create. A surplus of creatives, coupled with a culture of short-term, project-specific contracts, puts artists in relatively poor bargaining positions when dealing with investors. All this explains how such a big share of copyright’s rewards can end up being transferred to others.

We see from all this that authors have a moral entitlement to the fruits of their labour, but a hard time holding on to them. Outside Australia, many countries have taken steps to even the playing field. In France, publishers have an ongoing obligation to market their books: if they fail to do so, authors can readily regain their rights. They can also terminate an agreement if, at least four years after publication, no royalties have been paid for two years in a row (publishers are required to provide accurate royalty statements too). Canada automatically reverts rights to heirs twenty-five years after an author’s death (as did the UK until 1956 and Australia until 1968). Authors can terminate their contracts in the US after thirty-five years. The Netherlands and Germany both have ‘bestseller’ clauses, entitling authors to a bigger share of the windfall gains that come from unexpected commercial success.

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Australia’s current approach to protecting authors is a manifestation of trickledown economics, that theory of horses and sparrows: feed the horses enough oats and some will fall through to feed the birds. There are plenty of oats. By 2016, according to their own publicly released data, publishing behemoths Penguin Random House and Simon & Schuster had seen their profit margins grow to 16 per cent. Yet a recent study, The Contribution of the Publishing Industry to the UK Economy, estimated that just 3 per cent of earnings went to the authors from whose minds sprang those rivers of gold. In other words, we have fat horses and starving sparrows.

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We should also be demanding greater transparency around the distribution of revenue from the statutory licences that pay for uses in schools and universities. Those are the revenues that, in Australia, are collected by the Copyright Agency. Australia’s schools pay far more to use copyrighted works than their overseas counterparts – almost $17 per student, compared to around $3 in the UK and NZ. This would be laudable if that money went to supporting authors, but as far as we can tell from the Copyright Agency’s reporting, publishers again take the lion’s share.

Link to the rest at Overland