Amazon Is Changing Its Ebook Return Policy in Major Breakthrough for Authors

From The Authors Guild:

The Authors Guild is proud to report that our discussions with Amazon’s senior executive team concerning the platform’s policy that allows readers to return ebooks online within seven days of purchase, regardless of the amount read, have resulted in a major breakthrough. Yesterday, Amazon informed us of its plans to change its ebook return policy to restrict automatic returns to purchases where no more than 10 percent of the book has been read.

The planned change will go into effect by the end of the year. Any customer who wishes to return an ebook after reading more than 10 percent will need to send in a customer service request, which will be reviewed by a representative to ensure that the return request is genuine and complies with Amazon’s policies against abuse. This process will create a strong deterrent against buying, reading, and returning ebooks within seven days, and readers who attempt to abuse the return policy will be penalized under Amazon’s policies. The Authors Guild and the Society of Authors, its counterpart organization in the U.K., had taken up this issue with Amazon’s senior executives earlier this year. We applaud the scores of indie authors who advocated for this change.

Link to the rest at The Authors Guild

PG notes that traditional publishers will also experience a financial gain as well, more than the author will.

Writers’ Arbitration Ruling Yields $42 Million From Netflix

From Publishing Perspectives:

On Thursday (August 4), it was announced to members of the Writers Guild of America that a case of arbitration with Netflix has resulted in a huge win for screenwriters, coming to some US$42 million in residuals.

As the pace of development of books to film picks up—and as many international book publishers and literary agencies work to develop stronger channels into screen development deals for their properties and authors—the case highlights an interesting inflection point in the relationship of filmmakers’ writers and the streamers. And as EJ Panaligan at Variety reports, the arbitration was based in the case of the Netflix Original Bird Box, a film based on the 2014 novel of the same name by author Josh Malerman from HarperCollins’ Ecco. (Our interview with Malerman and background from literary agent Kristen Nelson is here.)

As reported by Wendy Lee at the Los Angeles Times, the Writers Guild of America West has reported that 216 writers who worked on Netflix’s theatrical films are being paid a total US$42 million in unpaid residual fees, thanks to the arbitrator’s ruling.

Eric Heisserer (Bird Box, Arrival, Hours) is the most visible screenwriter, thanks to his work on Bird Box. The arbitration has resulted in Netflix being required to pay him US$850,000 in residuals as well as $350,000 in interest.

The point on which the arbitration turned was Netflix’s own move into self-production, the Netflix Originals work—some of it written by guild members—which has become a major element of the company’s film library.

David Robb, writing for Deadline, carries part of an explanation provided by the union to its members on Thursday, and it’s a good summation of how the self-production vs. third-party production aspect of this was at the heart of the decision.

For our international readership: there are several industry acronyms here, all of which may not be familiar. Rather than spell each out on first reference–which complicates the text–we’ll list them here in the order you’ll encounter them before quoting the guild.

MBA: minimum basic agreement
DGA: Directors Guild of America
SAG-AFTRA: Screen Actors Guild-American Federation of Television and Radio Artists
AMPTA: Alliance of Motion Pictures and Television Producers

The Writers Guild of America West leadership writes to members:

“When a theatrical [film] is licensed or released in any other market—like streaming or television or home video—residuals must be paid on revenues earned in those markets. The typical residual for the credited writer is 1.2 percent of the license fee paid to the producer for the right to exhibit that film.

“If the license is between related parties—for example, when Netflix is both the producer and the distributor of the film—the MBA [minimum basic agreement] requires that the company impute a license fee based on arm’s-length transactions between unrelated parties of comparable pictures—for example, a Sony film licensed to Netflix. This critical definition, negotiated as part of the resolution of our strike in 2008, protects against the undervaluation of license fees through self-dealing.

“Rather than follow the established MBA definition for related-party transactions (which exists in the DGA and SAG-AFTRA agreements with the AMPTA as well), Netflix negotiated new deals with the DGA and SAG-AFTRA that allow Netflix to pay residuals on significantly less than the cost of the film. Netflix then tried to force the Writers Guild of America to take this ‘pattern’ deal. Since it was clear the new formula negotiated by the other guilds undervalued these ‘imputed’ license fees, the guild instead took the dispute to arbitration.

“During the arbitration, the guild showed that when Netflix licensed comparable theatrical films from third party producers it almost always paid a license fee that exceeded the budget. The industry refers to this model as ‘cost-plus.’ The guild argued that Netflix must apply this cost-plus model to its own films and impute license fees in excess of the budget for the purpose of paying residuals. The arbitrator agreed and ruled that the license fee should be 111 percent of the gross budget of the film.”

Link to the rest at Publishing Perspectives

Authors are protesting Amazon’s e-book policy that allows users to read and return

From National Public Radio:

Earlier this month, Lisa Kessler, a paranormal romance author, logged into Kindle Direct Publishing to check her earnings from the previous month. On her publishing dashboard, she saw something she had never seen before in her 11 years as an author: a negative earnings balance.

The reason for the negative balance? Kindle e-book returns.

Authors are protesting Amazon’s e-book return policy, a system they say allows readers to “steal” from self-published authors. Amazon’s current return policy for e-books allows customers to “cancel an accidental book order within seven days.” But, for some readers, seven days is more than enough time to finish a book and return it after reading, effectively treating Amazon like a library.

When an Amazon customer returns an e-book, royalties originally paid to the author at the time of purchase are deducted from their earnings balance. Authors can end up with negative balances when customers return books after the author has already been paid by Kindle Direct Publishing, an Amazon spokesperson said.

. . . .

Authors and readers want to change the policy

Reah Foxx, a book lover from Louisiana, started a petition to change the policy after seeing “life hacks” circulating on social media that teach readers to abuse the Amazon return policy and read for free. To date, the petition has garnered almost 70,000 signatures.

Kessler said prior to the “read and return” trend, she would normally have one or two book returns a month, something she attributed to genuine accidental purchases. Now, she sees entire series of hers being returned.

“It really rattled me,” she said. “You think, ‘Can I still make a living if this continues?’ and that’s very disheartening.”

Kristy Bromberg, a romance author, said she’s had more returns in the past two months than she had in the entire eight months before that combined.

Those suggesting the read-and-return practice think they’re “sticking it to Amazon,” but in reality are only harming the authors, said Eva Creel, a fantasy writer who publishes under the name E. G. Creel.

“I have my book available at the library. If somebody wants to read it for free, they can,” Creel said. “But reading it and making me think that I’ve made an income and then that income being taken away from me, that feels like stealing.”

Link to the rest at National Public Radio

PG wonders if this happens for Kindle Unlimited books where authors are paid by the number of pages read.