Sunday, December 8, 2013

Authors Vs. Publishers: Who Wins?

It’s getting harder and harder to squeeze out a nickel in the publishing business these days. Authors, publishers and vendors continually struggle for the upper hand. The business models are changing, technology brings new opportunities, and everyone wants to be first to exploit the Next Big Thing.

In a recent online report, Publisher’s Weekly reports a new development in this ever-changing landscape: Regnery Publishing prevailed in an arbitration case where three authors accused the company of cheating them out of their royalties. (The case has many facets, but for our purposes today I will carve out this narrow angle.)

For those not familiar with the eccentricities of the business: It’s a standard feature of almost all book contracts (surely there’s an exception somewhere), that the author’s royalty can vary according to several factors. The part that’s relevant here, is that the royalty can be reduced for copies sold to books clubs or to big-box retailers (think Walmart or Target). This is clearly spelled out in the contract, and too big to miss.

In exchange for buying large quantities, these outlets demand abnormally steep discounts. In this arrangement the publisher makes less profit, so they expect the author to share the pain. A 12% cut might be reduced to 8. When the book sells thousands of copies, this pay cut can add up to some serious money. But the happy flip side is that you’ll probably attract buyers who would never have found your book any other way. Like most authors, I’ve come to accept this reality; we’d rather sell more books than less, right?

What makes the Regnery case unique, however, is that they’ve been accused of self-dealing: Instead of marketing these books to traditional retail outlets (at the standard 40% off cover price and a full royalty), the publisher opted to sell at deep discounts (and reduced royalties) to the Conservative Book Club. What’s wrong with that, you ask? The CBC happens to be a sister company, under the umbrella of Eagle Publishing. Hence, Regnery didn’t really have to bend to the wishes of a demanding customer.

Was Regnery truly innocent here, as the arbitrator declared?

I can’t claim to read the minds of the three plaintiffs, but somehow I suspect they knew about (and were attracted by) the book club connection. If they didn’t know, their agents did. Even the most cursory read of the company’s website will reveal it. And like every other author I know, I would LOVE to be featured on a book club website. It’s better than paid advertising. While they will probably never admit it out loud (or perhaps don’t even realize it), most authors need the exposure more than they need the money.

As for the other half of the complaint, that Regnery deliberately and malevolently (is that a word?) steered sales away from "regular" retail outlets for the sake of their affiliate? Short of a confession from the sales department, this is impossible to prove. Every book campaign is unique, the path of wisdom is very subjective, and any survey of any ten experts can render ten very different opinions. In any event, no publisher can punish its authors in this way without also punishing itself.

Indeed, these are crazy and confusing times in the pub world. Surely there are tons of legal and technological issues that must be resolved in these next few crucial years, some that we have yet to imagine. Anyone who says they know the future, is either lying or deceived.

One thing I know for sure: If you take the profit out of something, no one will want to do it. If writers can’t make a living with their books, they will find something else to do. If bookstores can’t operate profitably, they will go away. If publishers can’t eke out a decent margin, their presses will go quiet. And all of our civilization will be the worse for it.

We all need each other. Now let's play nice.

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