Class action: publishers paid writers "sale" royalties on ebooks whose fine-print says they're "licensed"

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Is there a reason things can’t be a very simple straight forward thing between person that wants to get the thing they wrote to a wider audiance and the publisher that wants content to sell to the public?

Other than the obvious…


It sounds like more recent eBook sales have found some language that allows them to treat them as sales while still not giving the buyer the rights they should have for a sale. That’s unfortunate.


I’m not a big fan of this. I’d have considered it unethical if the big guys used a technicality to try and extract more money from the little guys, and the ethics don’t change simply because of who is victimizing whom.

As just to forestall the obvious, we’ve seen far too clearly what the result is of using somebody else’s unethical behaviour as an excuse for our own.

No thanks.


Only that we have always done things this way.

Writers are working on resolving the issue. I don’t know how successful we’ll be or how soon you can expect “results.”

It’s not a technicality that publishers are making all their money off writers but 99% of all writers can’t make a living off what they’re being paid.

Writers’ royalties on ebooks are a minuscule amount.


Statute of limitations runs out after six years…

Not if you can prove fraud.

In any industry with essentially unlimited upside (i.e. you are working for yourself and your earning depend upon sales), the vast majority of players won’t be making a living. If somehow most players are earning a living (i.e. during a “gold rush” phase for a new medium), enough people enter the market until most people are not earning a living.

The fact that most people who self-publish also don’t make any money (where they keep 100% of the revenues) makes it clear that this is simply a function of the market, not “evil” publishers.

The reality is that for the vast majority of consumers value creative works as negative until the work has been through one or more gatekeepers. Ask how many people are willing to experience random works with literally no gatekeeping at all. In books it’s called slush-pile reading and you have to pay people to do it.

So yes, publishers (which also go bankrupt), do make the majority of the money. But as long as they can remain accepted gatekeepers, and charge a premium for doing so, that function will be worth that majority…

I’m not a fan, in the sense that I’m not a fan of the shift to “licensed, not sold” as a circumvention of first sale and a host of other unpleasant things; but I am very much a fan of this in the “All they that take the sword shall perish by the sword” sense.

The playing with ‘intellectual property’ in order to create ‘sale-like’ conditions that provide the buyer with few or none of the actual advantages of a sale is deeply obnoxious; and if the publishers doing so are also screwing over the writers, they are egregiously trying to have it both ways: whenever it’s more profitable for it to be a ‘sale’, it’s a sale, whenever they have more leverage because its only a ‘license’, well, it’s a license. That is unacceptable.

If they want to ‘license’ it, and the contract stipulates different payments for ‘licences’ than for ‘sales’, they should shut up and pay.(or just sell, which would be an improvement).

Vendor fuckery.


The best possible outcome from this? Publishers all drop the “licensing” language from our ebooks from now on, and writers get a big payday besides.

This is refreshingly optimistic. More realistically, though, the likely possible outcome is that after dragging their feet for months or (more likely) years, they’ll settle for half or less of what they truly owe and pinky swear to not do it again.

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Do which bit again? Use the licensing language, or give the author a cut as if it were sales?

[quote=“tlwest, post:7, topic:78967”]
In any industry with essentially unlimited upside (i.e. you are working for yourself and your earning depend upon sales), the vast majority of players won’t be making a living. If somehow most players are earning a living (i.e. during a “gold rush” phase for a new medium), enough people enter the market until most people are not earning a living.[/quote]

According to The Author’s Guild approximately a year ago, the average mainstream published author makes 50% less royalties per dollar of profit off ebook sales than off traditional paper sales.

The publisher is not contributing more value to the production of an ebook than they were to the production of a paper book and they wouldn’t have anything to sell if not for the authors.

For most published authors, the publishers are actually doing less than they were doing previously because now publishers expect their authors to do the bulk of the marketing for the books they’ve written.

Not only that, but they also usually try to wrangle away your film, television, and other rights.

The ones who don’t make money (because there are self-published writers who are making money on ebooks) don’t make money because of any number of reasons. Most of which has nothing to do with the ebook market. They also mostly weren’t making money before the industry switched over to ebooks.

They aren’t making money because of one or more of the following:

  1. Not good writers (yet)
  2. Publishing something so niche that even they’re not expecting to make money at it
  3. Not good at marketing (yet)
  4. Haven’t found their audience

All of the above are just as true in “dead tree” edition as they are in ebook format.

And none of it justifies giving a non-negotiable 50% pay cut to published authors.

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The trouble with licensed, not sold, is that information is different from a physical good. You can essentially sell information once (or more likely, very few times). If the transaction costs of exchanging information are minimal (and trust that Amazon (or a competitor) would be on it within days to make certain that when you “bought” and e-book, you’d simply be transferring the bits from a “used” copy).

(I still remember the hit that authors took when Amazon made ordering used copies of a book as easy as ordering new. Reduce the friction, nuke the sales. But at least there, the (1) the original owner really didn’t keep possession, and (2) the cost of physical transportation kept the incidence survivable. But boy, did royalties and eventually advances drop.)

Anyway, this is, after all, the Internet age. Any loophole that you make to be convenient to the few customers who really want/need it will become the business model for a company who will ensure everyone exploits it to maximal effect (with them taking their slice, of course). It’s how Internet business works.

There is no digital middle ground. Either books are sold, in which case the industry drops 80% or so of its sales forever, or they’re licensed, in which case consumers lose some of their rights, which were not exercised all that often. Of course, consumer reaction tends to be “everything digital should be nearly free, and if they’re not nearly free, then to hell with publishers/authors being greedy, and if they can’t survive on nearly free, then it’s not my job to find a business model that works just they’re just stupid.”

(Of course, this is often followed by “how dare they outsource my job, those greedy bastards…”)

There is no possible solution that preserves the status quo. Someone is going to get screwed - one side nearly fatally, one side somewhat. To no-one’s surprise, the publishers didn’t decide to commit mass suicide.

Well, you have lots of company - including the US government, terrorists, and essentially everyone who feels that the someone “has done 'em wrong”, which around here can be almost everyone.

Me, I’m far too aware that by being born and with every action I’ve taken thereafter, I’ve taken the sword in someone’s eyes.

[Edit: Typos, grammar]

Okay, publishers provide one real service - access to bookstores, who have no interest in stocking something which hasn’t been thoroughly vetted.

That service, however, is so valuable, giving you the 1 in 100 chance of “making it” (“making it” = able to quit day job and not starve, not make a $50K+ living), that it’s worth the 92% that the publishers keep.

If a publisher is not putting you in n-thousand bookstores, then there’s no reason to pay a substantial part of the royalties to someone else - after all, publisher or not, you’re now amongst the 1 in 10,000 chance of success (that’s after the marketing the hell out of it).

They aren’t making money because there are lot more readable books than people willing to buy them, and the price they’re willing to pay for readable books keeps going down. There’s no magic pony here. If all customers spend a total of $X on books, then that’s all the money there is to divide among everyone involved in the process. The only way to pay more authors more (while keeping publishers in business) is to increase $X and unless something miraculous happens, people are expecting prices to go down so they can spend less on books (but get more books) and more on gadgetry.

Cheap e-books looked like a solution until people got 600 books in their to-read queue and realized that instead of buying 6 times as many books at 1/3 the price, (2 x $X! Hurrah!), they might as well buy at the rate they were buying before at 1/3 the price ($X / 3? We’re doomed!).

I don’t think that magical thinking is helpful. Authors have always supplied information and had publishers clothe it in a physical form that allowed the customers to justify spending the money on the information. Now that the physical form is being stripped away, people still want the information, but are incapable of stomaching the idea that the physical book wasn’t really much of the price. We’re not rational creatures, and I expect a beloved market to whither because we can’t handle paying what it would take to sustain it.

Happens all over the place with other goods, I don’t see books being any different.


My personal example is strategic game apps. I’m willing to pay $20-30 dollars for a low-end strategy game on the PC - it’s a niche market, small companies can (barely) survive on it. However, move the game to the iPad, where I’d play it far more, and get far more value, and I cannot make myself pay more than $9.99, even though it’s the same game, same effort, better format for me.

So what happens? People don’t make the sort of strategy game I desperately want on iOS because I (and from heard about sales figures, most of my peers), can’t handle paying the same price even simply because it’s an app and not a PC game. As I said, consumers (including me) are not rational, and it’s quite possible for there to be no market even though both sides would desperately like there to be one.

(I also saw this first hand 25 years ago when I had a man yell at me for selling a CD with our software for $25, yell and me for selling the thick user manual that went with it for $35, and happily walk out with a box that had only the CD and the manual with it for $99. It was before I learned the concept of anchor price, and at the time it felt surreal. Now I understand it’s just being human. CD = shovelware, and should be $10. Softcover book should be $20. Software, on the other hand was $400 (it was the early 90’s), and thus a steal at $99.)

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