Where’s the Logic?

From Teleread:

The Bookseller has some interesting coverage of the London Book Fair, but I don’t have time right now to go over all of it. I’ll focus on the one bit that just leaped out at me. A number of execs—David Shelley of Little, Brown, Richard Mollet of the Publishers Association, and Stephen Page from Faber—explained that fighting online piracy is costing publishers a bundle, and is one of the reasons publishers cannot afford to raise e-book royalty rates as some publishers have been requesting.

From the embedded link above that goes to TheBookseller.com:

[David] Shelley told delegates: "Money spent on print and paper will be spent on specialists to fight piracy. The costs of this are only getting more expensive, and could spiral way out of control. There are also legal costs, when sites refuse to take down content." Shelley claimed the "unknown costs", as well as other new digital costs, would replace the cost savings made on digital.

Huh. So, the cost of printing is going to be shifted to fighting piracy. Those costs can only go up with the possibility that they could become unsustainable (that is what spiral out of control means, right?) Then you add in legal expenses on top of this money equation (unless that’s part of the spiral). And then when you add it all, it would replace (read: equal) the cost savings on digital.

Wait, what?

I’m not sure I get it. But in looking at the publisher margins for ebooks: (as I wrote about in a post about two weeks ago)

How much better for the publisher and how much worse for the author? Here are examples of author’s royalties compared to publisher’s gross profit (income per copy minus expenses per copy), calculated using industry-standard contract terms:

The Help, by Kathryn Stockett

Author’s Standard Royalty:
$3.75 hardcover; $2.28 e-book.
Author’s E-Loss = -39%

Publisher’s Margin:
$4.75 hardcover; $6.32 e-book.
Publisher’s E-Gain = +33%

Hell’s Corner, by David Baldacci

Author’s Standard Royalty:
$4.20 hardcover; $2.63 e-book.
Author’s E-Loss = -37%

Publisher’s Margin:
$5.80 hardcover; $7.37 e-book.
Publisher’s E-Gain = +27%

Unbroken, by Laura Hillenbrand

Author’s Standard Royalty:
$4.05 hardcover; $3.38 e-book.
Author’s E-Loss = -17%

Publisher’s Margin:
$5.45 hardcover; $9.62 e-book.
Publisher’s E-Gain = +77%

They would be taking the money made from this new greater margin and using it to fight online piracy. Which they may or may not be able to do based on the impossible-to-calculate-but-possibly-unsustainable sum of money. But since they have a better margin from eBooks, they have more money to fight piracy.

And that’s why they can’t pay authors a larger royalty.

It’s that kind of logic that makes me think of Eli Neiberger’s idea of going directly to the content makers to purchase the rights. Why deal with a middleman who is hell bent on a Sisyphean task of financially dubious results?? The cost of that madness would be added to the cover price; we (libraries and regular consumers) would be paying to support these ill reasoned expenditures. I’m all for rights holders pursuing actions t defend their intellectual property, but not under the “we must burn down the village to save the village” kind of approach. There has to be a better way.

It’s odd, as I close this post, to think that some publishers actually have issues with their digital content being at libraries. I would think we’d be a lot easier to deal with than your average pirate website.

One thought on “Where’s the Logic?

  1. I was going to be snarky in an effort to point out that we’re convinced, and that we need to convince them, with a laugh at them-but it’s not funny anymore. And that they’re not listening to us here, so maybe at ALA 11, and at their conference (ABA), we need to present folders of the information, pie charts, reports, graphs, about the direct effect of libraries making borowers/buyers, and apply liberally. Also the above information. The authors will be interested. If they haven’t already heard from other authors ( and some won’t.) This is a time when we need to market the info we know.

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