October, 2012 – The National Writers Union today strongly endorsed the objections to major book publishers’ treatment of e-book licensing terms made public last week in an open letter from the American Library Association.
“Readers need to know that the unfair demands of publishers, not writers, are the obstacle to library availability and lending of e-books,” announced NWU President Larry Goldbetter.
Earlier this year, Goldbetter and other NWU leaders met with the president and other national leaders of the ALA to discuss librarians’ and authors’ mutual grievances against publishers’ e-book licensing and royalty terms. “We’ve made clear to the ALA that the NWU is eager to work with libraries to enable writers to license e-books directly to libraries and to enable library catalogs to include pointers about e-book editions available directly from authors,” Goldbetter said. “If writers are able to keep our fair share of e-book revenues, we can offer libraries lower-priced, more flexible e-book licenses than those offered by publishers, which will make it possible for more writers to earn a living from our work.”
The ALA’s letter focuses on several major publishers’ refusal to “sell” e-books, and insistence on restrictive e-book licensing terms prohibiting library lending.
But those same publishers are reporting e-book revenues as “sales” when they calculate authors’ royalties, the NWU found in a survey of its members. The NWU denounced publishers’ hypocrisy in telling readers and librarians that e-books are licensed, not sold, while paying authors as though e-books were sold, not licensed.
“Publishers can’t have it both ways. Publishers either have to treat e-book transactions as true sales that grant buyers ‘first sale’ rights for lending and resale, or they have to split e-book revenues with authors according to the licensing clauses in existing contracts, ” demanded Goldbetter.
Until recently, typical author-publisher contracts entitled authors to 5-15 percent of revenues for “sales” of print books and 50 percent of revenues for “licensing” of other subsidiary rights, including electronic uses or e-books.
As revenues from e-book licensing have begun to surpass print book sales, publishers have been pressuring authors to agree to contract amendments reducing e-book royalties from 50 percent to a new norm, unilaterally imposed by publishers, of 25 percent of net proceeds. Most publishers’ current contracts limit e-book royalties to 25 percent of net.
“It’s one thing for publishers to keep most of the price of a physical book to cover the costs of printing and distribution,” Goldbetter noted. But it’s unconscionable for publishers to claim anything close to the same percentage of e-book revenues when they have no printing, binding, warehousing, or shipping costs.”
“Publishers need to honor the subsidiary rights’ royalty terms they agreed to in existing contracts for their backlists, and substantially increase the e-book royalty percentage for new books. Seventy-five percent for the author and 25 percent for the publisher would more accurately reflect how much each has invested in the joint venture.”
October 5, 2012