eBook Royalty Tangle

August 5, 2012

It all hinges on the calculation of net receipts. We learn that the ebook phenomenon seems to have prompted some creative accounting in techdirt’s “Harlequin Authors Sue Publisher Over Creative Royalty Calculations.” The class-action lawsuit against Harlequin alleges that the publisher created a legal entity in Switzerland specifically to manipulate the math, reducing the amount the company paid ebook authors from the negotiated 50 percent of the cover price to three or four percent. Writer Zachary Knight observes:

“There was once a time where such a tactic would not have reached the point of a lawsuit. There was a time when publishers actually had a strangle hold on publishing and could force any terms they could conceivably get away with. However, with the introduction and proliferation of self publishing, that stranglehold is weakening. As authors are looking at the deals they are getting from publishers vs. the deals self published authors are getting from the likes of Amazon and even Apple, they are beginning to lash out.”

Yes, many changes have followed the transition of all sorts of media to the Internet. Companies that can responsibly navigate the change and, I submit, act rather than react will stand the best chance of success. There’s no turning back now.

Cynthia Murrell, August 5, 2012

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