Traditional publisher royalty statements

[beatrice_otter]

If you're interested in the business end of publishing, ebook, traditional, or other, you need to check out Kristine Kathryn Rusch's blog. (AKA Kristine Grayson and Kris Nelscott.)  She has two very interesting posts up on the number of sales of ebooks the Big Six are reporting vs. the number that are actually being sold, and how writers are getting screwed on their royalties.

Royalty Statements
Royalty Statements Update

Apparently, some of the Big Six publishers are significantly underreporting the actual number of e-books sold on writers’ royalty statements.

I heard from dozens upon dozens of traditionally published writers last week, and to a person without exception, they had all looked at their royalty statements and found discrepancies like the ones I found. Some—and I find this terrifying—had the exact same numbers reported on their statement as were on my statement.

That’s not possible, folks. In a six-month period, each individual book title sells a different number of copies than another individual book title, even if the titles are in the same genre.

But within one company at least, the one I was most familiar with, several of us had identical e-book sales for the same period. Some writers in that company who had published books in a series had identical e-book numbers for each book in that series. Again, not possible.

Because of my blog post, at least a dozen writers sat down with numbers and calculators in hand. These writers compared the sales of their self-published e-book titles to the sales of their traditionally published e-book titles, and found startling discrepancies. Even adjusting for price differences (Big Six e-books were priced higher than the self-published books), these writers discovered that their Big Six publishers reported e-book sales of one-tenth to one-one-hundredth of their indie-published titles.

Some of these writers are bestsellers. Their bestselling frontlist novels (released in the past year)—with full advertising and company wide support—sold significantly fewer copies than their self-published e-books, books that had been out for years, books that had no promotion at all.

As I said in last week’s post, the reported sales numbers from some of the Big Six publishers do not pass the sniff test.  I still stand by last week’s statement that this comes not from malice, but from an unwillingness to improve accounting systems to accommodate the new technology.

I hope this all leads to changes in the way they do accounting in the industry.

Comments

[elf]

One of the issues that got swept aside during the agency pricing discussions was "why did Random House hold out for traditional pricing?" There was some speculation that it was to keep authors in the dark:

I agree, but don’t think Random is afraid of lower prices. Instead, like many publishers, the company fears that clear sales numbers might give authors access to information they’re not supposed to see.
...
For the most part, the transactions are clear and the exchange of money straightforward to follow. A publisher sells a given number of copies and gets a fixed percentage of list price for each. Forget reserves, confusing discount levels, and effectively dropping author royalties. There is no way to obfuscate the business details, and authors can demand what they should make, rather than have complexities and “mistakes” that leave authors poorer and a publisher richer.

Of course, there's always the option of "just LIE on the royalty statements." (And like she says, I think malice is less likely than "we don't want to pay thousands of dollars and change our whole accounting system to deal with all this new weird information.")

I hope the discrepancies are enough to get a subpoena for accurate numbers, perhaps directly from Amazon & B&N. A really cool long-term outcome would be authors having the right to demand their sales numbers directly from the ebook stores... after all, it can't be too much of a hardship to email a sales report to an additional person. (I know, is more complicated than that. Publishers may get numbers for all their authors combined in a single report. But I know Amazon can run single-title reports; they do it for indie authors.)

Kris' blog

[(Anonymous)]

I read and blogged about her posts too. Scary! I hope something can be done about it soon or else traditionally published authors will keep getting ripped-off.

Melissa Douthit