Investigation into publishers under-reporting ebook royalties

There have been stories for some time that major publishers have been systematically under-reporting ebook royalties, and hence stiffing their authors the payments they've earned.

Now a law firm has launched an investigation. Here are the details.

Publishers terrified to compete with Amazon Publishing

Publishers Weekly has begrudgingly acknowledged the obvious in an article titled "All Eyes on Amazon Publishing." After quoting a lot of grousing bookstore owners and nervous agents, the meat of the article -- which reveals the real concern of PW and its Big 6 clientele -- is to be found in the final two paragraphs:

For many agents, along with some booksellers, the real concern about Amazon Publishing has to do with what it could signal for traditional publishers. If Amazon lands enough bestselling authors, it could dominate traditional publishing the way it has come to monopolize online bookselling. Jeff McCord, owner of the Atlanta shop Bound to Be Read Books, thinks Amazon has long “wished to take over the book industry from top to bottom” and its recent foray into publishing is proof. “Amazon Publishing is a bigger worry for publishers than for bookstores,” he said.

While agents don’t want to see Amazon gain more control over any part of the business, they will go where they find the best deals. If Amazon is offering better royalty rates on both print and digital than many traditional houses—as some reports suggest—agents will be forced to do business with a company that, as one insider put it, “there is a lot of bad blood with.”

Translation: Publishers are scared out of their wits that Amazon is going to out-compete them for authors on the publishing end, just as booksellers are furious that Amazon's online and Kindle business has out-competed them on the retail end. Just you wait: It won't be long before all the dying dinosaurs try to get the government to crack down on this superb competitor with the bludgeon of antitrust" laws, instead of their own improvements in quality, author terms, and customer service.

Great advice for authors

Within the past day or so, some of the smartest, most successful participants in "the Self-Publishing Revolution" have posted valuable advice for authors who are trying to navigate through the chaos of today's publishing world. I thought I'd post here a roundup of links.

Dean Wesley Smith -- a prolific author (widely published, both traditionally and independently) who writes an invaluable blog -- has just posted a brief summary: "The New World of Publishing: Traditional or Indie? What To Do Now." For writers facing the decision as to whether to continue seeking a traditional agent and publisher, or to self-publish, he offers this advice, in a nutshell:

Take everything you can take into your own control and hold on.

What does that mean exactly?

Write like crazy.

Then with what you have finished, spend the next two years indie publishing your own stuff, learning all the tricks of being an indie publisher, and getting your own trade paper books into bookstores.

Then when things settle down in traditional publishing, you will be ready and practiced and have some work to present to traditional publishers.

Read the entire blog for his reasoning and explanations.

Not convinced? Then you need to read veteran author David Farland on the basic math of publishing, summarized here by the "Passive Guy." This brief excerpt from David's post about the sobering odds and the financial facts of life in today's publishing world make it clear that to seek a traditional print publisher is an almost sure career-killer for an author.

Meanwhile, another widely published and highly successful author, Bob Mayer, has summarized his own experiences and advice in two valuable publications that every author should peruse. Bob's blog is another don't-miss daily resource.

But if traditional print publishing is heading into a chaotic and uncertain future, how can one take advantage of the emerging opportunities in "indie" or self-publishing? David Gaughran has compiled the experiences of nearly three dozen successful indie authors in his just-released book, Let's Get Digital: How to Self-Publish, and Why You Should. The book is getting advance raves and ought to be a first stop for authors contemplating their publishing options.

Follow those links, Dear Author, and you'll get a crash course in how to survive during the Self-Publishing Revolution.

Borders' Fall -- and Fallout for Authors and Publishers

Kristine Kathryn Rusch (whose discussions of the publishing business are invaluable) has just published a long post detailing the terrible ripple effects that the Borders Books closing will have on authors and publishers in the third quarter. Here's just a snippet:

...The remaining stores, all 399 of them, and the remaining employees, 10,700 of them, will be gone by September.... The main financial squeeze that Borders will cause to the publishers on already delivered material has already happened.... But the bigger problem with Borders’ liquidation is upcoming....

The problem is the decreased shelf space. Think it through, my reading friends. Suddenly 399 bookstores are vanishing, with no replacement in sight.... Here’s the problem beautifully stated on Twitter by Kathleen Schmidt, a book publicist: “Here is how the Borders closing will impact publishers: Say you have a bestselling author and you usually do a 1st printing of 100K books. Out of that 1st print of 100K, B&N/Amazon would take a large quantity, then Target, maybe Costco/BJs/Walmart, then Borders, then indies. If you’re an author with a 1st print of 30K (a lot), you prob don’t have price clubs or Target. You have B&N, Amazon, Borders, and indies. Now, take Borders OUT of the 1st print equation. Also consider that B&N is conservative with numbers these days. That 30K turns into 15K.”

I found this quote in a good analysis piece on NPR’s book blog. As Rachel Syme, the author of the blog, added, “Granted the reduced print runs for books doesn’t mean fewer books will sell, but Borders closing does have a huge effect on how many physical copies will be out in the world.... There is no other outlet big or solid enough to absorb the blow; there is nowhere else for all those paperbacks and hardcovers to go. The most logical thing to do is to stop printing them”....

...Those things, however, would be a blip on the publishing radar if it weren’t for something that is happening this month that most people in traditional publishing don’t even know about.

Barnes & Noble issued an order from its corporate headquarters that it wants its stores to once again decrease the number of paper books the stores are going to carry.... What this means is that in the third quarter, just as traditional publishers are absorbing and dealing with the last of the Borders blow from the winter, they will get hit with a massive number of returns from Barnes & Noble.

Add to this the ailing economy, and the confluence of these events means that the third and fourth quarters are likely to be disastrous for traditional publishers and their authors. They rely heavily on chain bookstores as their main public showcases. But a huge portion of the shelf space for books in those stores will vanish, almost overnight -- right in the middle of the economy's non-recovery.

As always, read the whole thing as Rusch -- one of the best-informed people in the book business -- looks ahead at the far-reaching implications and consequences for all of us who have an interest in the printed word.

5 traditionally published authors who have gone "indie"

Here is an absolutely fascinating roundtable interview with five women, each traditionally published, who have decided to self-publish. Why? They provide a host of details about their experiences and the reasons for their respective decisions. Here is just a small sample:

How does self-publishing compare for you to your traditional publishing experience?

Kathryn Shay: For me, self publishing is a lot easier, and more lucrative, than traditional publishing. I’m thrilled so many of my earlier books are getting readers (over 38,000 people have downloaded AFTER THE FIRE, which just went free on Amazon). And in some ways, writing is more enjoyable for me because I get to write about what I want and write the way I want to. Don’t get me wrong, I enjoyed working with editors in many respects. But I’d rather have control of the content and style of my work.

Beth Orsoff: I’ve had much more success self-publishing than I did as a traditionally published author. I’ve sold many more books, earned ten times as much money, and I’m able to write what I want instead of what an agent or editor thinks will sell.

Patricia Ryan: Self-publishing has been a revelation for me! I love having control over the packaging and distribution of my books, and the high royalties, paid monthly, provide a steady income, something writers rarely get to enjoy.

Julie Ortolon: No comparison. I love everything about self-publishing. The freedom, the lack of stress, the control. That said, writing under contract for major print publishers was a great training ground. Succeeding at self publishing without that experience would probably be harder for me. Writing for a publisher taught me to think about the whole picture: the marketing, packaging, target audience. Working with editors and copy editors really helped me hone my craft. Does that mean I couldn’t succeed in self-publishing today if I were just starting out and hadn’t had that training ground? No. But writers who choose self-publishing need to know it’s not a short cut or easy out. You gotta put in the work. Sloppy craft just won’t cut it.

There is a wealth of experienced-based perspective here for any author or would-be author contemplating options. As ever, read the whole thing.