After Action Reports or Royalty Statement Shock Control

This past weekend was one of those rare weekends when I didn’t write, didn’t edit, didn’t do anything with regard to the publishing industry other than re-reading one of Dave Freer’s books for fun.  I didn’t even read the blogs I normally do.  Instead, I enjoyed spending the weekend at university with my son — always a reason to celebrate.

So, imagine my reaction when I got home last night and started going through my regular blog reading and found some of my concerns now being voiced by names bigger and more knowledgeable than I.

A little background first.  I may be a very small fish in a huge pond when it comes to being a published author, but I keep my ear to the ground and I talk to a number of others who have been in the business a lot longer than I.  One thread has seemed to be consistent of late — the concern that royalty statements aren’t accurately reflecting the number of sales any given author is making.  Now, this concern isn’t anything new.  Writers have had issues with Bookscan numbers for quite awhile simply because Bookscan doesn’t report all sales.  It simply reports sales from selected markets and then extrapolates from there.  Okay, it might be easier for a a publisher to simply pay a third party to do this, but come on, guys, the publisher surely knows how many books are printed, how many are shipped, how many are sitting in a warehouse somewhere and how many have been returned.  A simple in-house computing program could track that.

So, Bookscan had been an issue of concern.  Then Amazon did something the publishers hated.  They made Bookscan numbers available to authors who take part in their Author Central program.  Oooops.  Now writers can track their own numbers for printed books without breaking the bank.

That then focused attention on e-book sales and gets back to my conversations with some of my writer friends.  More than one talked about how they were getting royalty statements saying they had sold a very small number of e-books — far less than what their fan mail and in-person conversations with readers led them to believe — and, very suspiciously, they sold the exact same number of copies of multiple titles.  Okay, I’m a pretty trusting person, but when a royalty statement says Author A sold 8 copies each of three books and this is exactly what they sold the previous royalty period as well…well, I start getting suspicious.

Seems I’m not alone.  One of those I respect a great deal in the business is Kristine Kathryn Rusch.  I’ve never had the pleasure of meeting Ms. Rusch, but I have followed her posts in “The Business Rusch” for some time now.  Her post on the 13th about royalty statements is something every writer needs to read, digest, read again and then act on.  Remember, the publishing industry is changing very rapidly right now and publishers are struggling to figure out how to adapt — I hope they are at least — and I think Ms. Rusch is right when she says that adopting a new accounting method that accurately tracks e-book sales is not high on publishers’ priority lists right now.

Maybe Bookscan will soon start tracking e-book sales as well.  It won’t be perfect, far from it.  But it will be one more weapon in a writer’s arsenal to protect himself.

(As an aside, another blog every writer should be following is Dean Wesley Smith‘s.  Between him and Ms. Rusch, the business of publishing is made much more understandable for writers at all stages of their careers.)

8 Comments

  1. “A group audit of all the traditional publishers . . . ”

    Holy Confetti, Batman!

    Or perhaps I should say Holy Electrons, since Ms. Rusch is talking about e-book sales. I wonder how many old time publishers are contemplating retiring _right_ _now_ and letting their Mega Corp masters deal with it.

  2. Pam, my questions are how many of these traditional publishers will wind up having to fold if the audits show even a fraction of what some folks think they will and how many authors will wind up taking it in the end — literally and figuratively — again because their works will be in litigation limbo.

    Think about it. If a group with the force of an RWA or SFWA instigates that sort of action, not only will e-book royalties come under a microscope, so will print royalties. If it is shown that only 1/2 to 2/3rds of actual sales have been reported, and publishers had reason to know or suspect that, they could be held responsible for those back royalties as well.

    Add to that the way they are, or at least seem to be, double dipping on expenses in producing print and digital books and, well, things could get ugly very quickly.

  3. This is why I periodically have fond and evil thoughts of IRS audits and – in my nastier moments – RICO prosecutions.

    The whole thing would collapse like the overblown house of cards it’s become. Unfortunately, it would take an awful lot of innocent people with it. Mostly writers, but a fair few clueless editorial sorts as well.

    1. Unfortunately, you’re right, Kate. At least that’s the way I see it. Which is why writers need to make sure they have their rights reverted as much as possible before the walls come tumbling down.

  4. Getting a bunch of successful authors’ backlists tied up in limbo is something to avoid, but not at all costs. Mind you, once the publishers have been shown to have broken the contracts, there should be no question of the rights reverting.

    The authors may opt for partial payment of back royalties with clear release of all rights, rather than going for jugular.

    The main problem would be if the rights were considered a substantial asset if any of the companies declare bankruptcy.

    1. The problem is that the publishers aren’t willingly releasing rights, even when they’ve reverted according to contract. That’s one of the issues that is going on in the Dorchester debacle right now.

      Part of the problem is how the publishers are “interpreting” the in print clause for e-books. I know of too many authors who are having to fight tooth and nail to get their e-rights back, even in the face of the creative accounting that seems to be going on.

      What my concern is, is that these e-books will be hung up like so many have been already by houses going out of business. Too many contracts don’t have reversion language in them concerning what happens if the publisher goes under, or the language is so vague that it will take a court to interpret it.

  5. Amanda,
    Berkley isn’t reverting my Musketeers books, though they’ve reverted according to contract. Also, frankly and weirdly, in litigation the books become “assets” of the company and the author can’t touch them. So, yeah, that’s a huge issue. Though there is the prospect of mass lawleness. As in, if we all TAKE our rights back, what are they going to do about it? I can see keeping quiet and being good for a publisher still publishing you, but most of these publishers are turning out mid list authors by the hundreds, so…

    As for what will happen if a few lawsuits errupt, if what I’ve heard of the Sabarnes Oxley act is true, you DON’T need to to prove that the publishers knew, just that someone under them knew or should have known (yes, should have known. The stupid law — sorry, it IS stupid will punish incompetence as a crime) that there was fraud or A MISTAKE IN ACCOUNTING.

    What this means is that if mistakes are found (if, ah ah, I kid) the entire chain of command from the accounting dept to anyone with fiduciary interest in the company, including in the conglomerates that run the company is in for minimum ten years. This is for all publically traded publishing companies which, uh, are most of them.

    And no, I don’t think any of these people ever thought that applied to them. No, no the act was for “soulless” corporations that create actual goods. They were in the a’ts. They were morally pure and emotionally upright or something.

    Live by the business killing law, die by the business killing law, I say…

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