Are publishers under-reporting ebook sales to authors?


It’s been an interesting couple of days in the publishing world. It seems like some publishers may be under-reporting ebook sales to their authors, in some cases reporting as little as 10% of the actual sales in royalty statements.
Needless to say, this has a lot of writers confused and concerned.
Yesterday, Mike Stackpole talked about this issue. Today, David Farland wrote about it in his “Daily Kick” emails to writers, and Kris Rusch blogged about it on her Business Rusch blog. All three confirmed the problem. What seems to be happening is writers who have indie and corporate published books are comparing the results of the two for the first six months of 2010 right now. And finding that corporate books whose Amazon ranking was higher than their indie books are reportedly selling 30 copies to the 300 copies the indie book sold.
The better rank (which should mean more sales, not less) is getting 10% as many sales.
Kris Rusch went into a lot of detail about what she thinks is going on: basically, bad accounting practices designed to sort of tide the companies over while they get their act together. The problem is, that’s still money (potentially, a lot of money) not being paid out to writers.
This is a dangerous road for publishers to start down. Remember when everyone was appalled that Borders had stopped paying some of the publishers supplying the company with books? When you stop paying the people who provide what you sell, you’re a heartbeat away from going out of business. It seems like right now, some publishers are doing something similar to their writers. It’s a precarious place to be.
As David Farland said, “In such a world, authors really may have no choice but to walk away from the New York model.”


6 Replies to “Are publishers under-reporting ebook sales to authors?”

  1. As I commented on Kristine Rusch post, one solution would be the author to keep the e-book rights and every sale to go through them.
    Many aspects to this.
    1. The author could sell on his own the e-book version.
    2. Establish a standard amount of e-books per month. That’s an offer the publisher might take, since if pub.house sells more the rest goes to them 100%, but if they sell less, their loss.
    3. Receive a statement from the bookstores directly, in order to check the amount outside the pub.house.
    Maybe other forms too, those 3 above are what I thought of in 5 minutes.
    There are solutions and ways to enforce them.

    1. Yes. Except as Mike Shatzkin has already pointed out, some publishers are already seeing digital as the primary right (implying, incidentally, that they expect digital to represent more than half of revenue by the time books being bought *now* are in print). I don’t know that publishers are going to be able to bring themselves down to taking only the residual right (print) and allowing writers to retain and utilize the primary rights.
      I don’t know if a standard number works, either. We’re talking about hundreds of thousands of books whose control publishers will have for decades, in ebook form. Do they set a rate of 2000 a month, which is low for release for most books? Or 5 a month, which might be high for many books after a few years? The selling number is heavily impacted by what (and how much) the writer is still writing, too – writers who are more prolific will sell more of their older books. How to factor that in?
      I think I like #3 best. Ask the retailer to set up “viewing rights” for the stats on the author’s books published through someone else. That actually shouldn’t be too hard. It would cost a bit to set up though, and…the retailers have no financial incentive to do this, and Amazon at least is probably still pissed at the publishers over forcing them into the agency system. Amazon might be perfectly happy to see the major publishers burn – after all, it’s already quite obvious that writers will continue to get product to Amazon to sell, even if all of Big Publishing died tomorrow…

  2. As I commented on Kristine Rusch post, one solution would be the author to keep the e-book rights and every sale to go through them.Many aspects to this.
    1. The author could sell on his own the e-book version.
    2. Establish a standard amount of e-books per month. That’s an offer the publisher might take, since if pub.house sells more the rest goes to them 100%, but if they sell less, their loss.
    3. Receive a statement from the bookstores directly, in order to check the amount outside the pub.house.
    Maybe other forms too, those 3 above are what I thought of in 5 minutes.

    There are solutions and ways to enforce them.

    1. Yes. Except as Mike Shatzkin has already pointed out, some publishers are already seeing digital as the primary right (implying, incidentally, that they expect digital to represent more than half of revenue by the time books being bought *now* are in print). I don’t know that publishers are going to be able to bring themselves down to taking only the residual right (print) and allowing writers to retain and utilize the primary rights.
      I don’t know if a standard number works, either. We’re talking about hundreds of thousands of books whose control publishers will have for decades, in ebook form. Do they set a rate of 2000 a month, which is low for release for most books? Or 5 a month, which might be high for many books after a few years? The selling number is heavily impacted by what (and how much) the writer is still writing, too – writers who are more prolific will sell more of their older books. How to factor that in?

      I think I like #3 best. Ask the retailer to set up “viewing rights” for the stats on the author’s books published through someone else. That actually shouldn’t be too hard. It would cost a bit to set up though, and…the retailers have no financial incentive to do this, and Amazon at least is probably still pissed at the publishers over forcing them into the agency system. Amazon might be perfectly happy to see the major publishers burn – after all, it’s already quite obvious that writers will continue to get product to Amazon to sell, even if all of Big Publishing died tomorrow…

  3. Wow, that is really scary stuff. As a writer, it sometimes feels like everyone I meet has one hand out to be paid and the other hand in my pocket to snatch whatever is left.
    You want to believe the best of everyone, but the facts are the facts! Something is screwbally and the ones who suffer are the most necessary component of the product…
    YA: Cheat, Liar
    Adult: Shackled

  4. Wow, that is really scary stuff. As a writer, it sometimes feels like everyone I meet has one hand out to be paid and the other hand in my pocket to snatch whatever is left.
    You want to believe the best of everyone, but the facts are the facts! Something is screwbally and the ones who suffer are the most necessary component of the product…

    YA: Cheat, Liar
    Adult: Shackled

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