The Author’s Guild issued a sharp rebuke to publisher John Wiley & Sons for delivering a sort of Trojan Horse to authors.

The “horse” came in the form of a notice to authors who had contracts with newly acquired Bloomberg Press that the company was downwardly adjusting its royalty rates. Buried inside a saccharine (“We are pleased to inform you…”) salutation was a message that Wiley was conforming Bloomberg’s royalty to the rate stipulated in Wiley’s boilerplate – an “adjustment” that would pay the authors 24% and 43% less than they were getting.The authors were invited to sign an amendment.

The Guild’s outrage that authors were being snookered was expressed in unusually strong language. “The contract amendment, which provides no threshold level of sales for a work to be considered in print, essentially grants Wiley a perpetual right in an author’s book for a pittance. The 5% of net receipts royalty rate for print on demand editions is as lowest we have ever seen.” And “This is no way to do business. The letter is shocking from a publisher of Wiley’s stature.” “In our view, Wiley should tear up any signed letters it has received and start over, forthrightly explaining to its new authors the contractual changes it is seeking and how this may affect their income and their right to terminate their publishing contracts.”

We haven’t viewed Bloomberg contracts but assignment language in many publishing contracts guarantees that an acquiring company cannot change contractual terms without the express consent of the author. Signing the amendment would do just that, and the Guild wants to make sure authors know that it is a potential trap.

The full text of the Guild’s notice is below.
Richard Curtis
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Wiley’s Deceptive Letter to Bloomberg Press Authors: “We are pleased to inform you” that we will be slicing your royalties up to 50%

John Wiley & Sons acquired Bloomberg Press, the books division of Bloomberg, in March. At the end of April, it began sending a letter to hundreds of Bloomberg Press authors purporting to inform them “about a few differences in the accounting systems of Bloomberg and Wiley that it will be helpful for you to know about.”

While this sounds innocent enough, it isn’t. If signed by an author, the letter is actually a contract amendment that will materially and adversely affect the royalty rates of many Bloomberg Press authors.

Among other things, this contract amendment would:

1. Change royalty rates based on retail list price to rates based on net receipts. We’ve reviewed several Bloomberg Press contracts. All provide for royalty payments based on the retail list price (although we understand that there may be many based on net receipts). The Wiley letter misleadingly presents this to the author as good news: “We are pleased to inform you that we will be paying your royalties on the net amount received…” This change will, for many authors, effectively slice royalties by up to 50% for some book sales. Wiley’s letter fails to disclose that.

2. Empower Wiley to keep an author’s book in print with a lowball print on demand royalty of 5% of net receipts. (Bloomberg Press had no print on demand program.) The contract amendment, which provides no threshold level of sales for a work to be considered in print, essentially grants Wiley a perpetual right in an author’s book for a pittance. The 5% of net receipts royalty rate for print on demand editions is as low as we’ve seen.

We’ve asked an independent royalty auditor to review the affects of these contractual changes on royalty income. The royalty auditor found reductions of 24% to 43% using actual sales figures and applying Wiley’s amendments. (The precise affect of the amendments will vary by title, depending on particular categories of sales of the work.)

The Authors Guild strongly urges Bloomberg Press authors to not sign this letter without careful consideration. If you have received this letter, consult your agent or a publishing attorney or contact a lawyer in our legal department so you understand precisely how this amendment would affect your rights and royalties. Important: if you have already signed the letter and returned it to Wiley, contact our legal department immediately. Non-Guild members are welcome to contact us as well. All communications will, of course, be held in confidence.

This is no way to do business. The letter is shocking from a publisher of Wiley’s stature. In our view, Wiley should tear up any signed letters it has received and start over, forthrightly explaining to its new authors the contractual changes it is seeking and how this may affect their income and their right to terminate their publishing contracts.

The Authors Guild

Though it seems to be taking longer to adjudicate than Jarndyce v. Jarndyce, judicial review of the Google Settlement -  the compromise reached by the book industry/Authors Guild v.Google -  is still in process. Those of you whose patience has flagged need to be reminded that the stakes remain as high as ever, and if judge Denny Chin is taking his sweet time poring over the briefs, it’s because the issues and implications are nothing short of stupendous.

Forgive us then for keeping the matter in front of you. For a balanced, plain-English summary read IO9.com editor in chief Annalee Newitz’s 5 Ways The Google Book Settlement Will Change The Future of Reading. Newitz thoroughly weighs pros and cons and narrowly expresses support, concluding that “with careful regulation, the Google Book Settlement could be the first shaky step on the road that will take us” to “a future of economically-sustainable openness in the stacks.”

Familiarize yourself with the Authors Guild’s position, which we support wholeheartedly.

Richard Curtis

Yes, we’re all suffering from Settlement Fatigue Syndrome and if we read one more position paper about the proposed settlement of the Authors Guild/Association of American Publishers we’ll be tempted to watch reruns of Beavis and Butthead.

That said, try sucking it up just a little longer and read the Authors Guild statement circulated by email to its members. It essentially states that while none of the choices is thrilling, “harnessing” Google is the best way to protect authors’ interests. We agree. A ruling is imminent but the issues have not changed nor have the stakes gotten any lower. The book industry stands to suffer the same devastation that brought the music business to its knees.

From our viewpoint, harnessing Google is only where the benefits begin, not where they end. If we can impose on you to read yet one more article, look at David Drummond’s in the Guardian.”The truth,” Drummond writes, “is that readers around the world who seek the information locked in millions of out-of-print books currently have little choice other than to travel to a small number of libraries in the hope of finding what they are looking for. And if you’re an author, you have no way to make money from your work if it’s out of print.

“Imagine if that information could be made available to everyone, ­everywhere, at the click of a mouse. Imagine if long-forgotten books could be enjoyed again and could earn new ­revenues for their authors. Without a settlement it can’t happen.”

We say amen to that. Support the Settlement.

RC

Though Amazon has begun restoring buy buttons to Macmillan books, gun-shy authors may want to take advantage of a website developed by Authors Guild to help them determine if the buttons get turned off to any of their books. Not just Macmillan books but books published by any company. Here’s the Guild’s pitch:
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The Authors Guild is pleased to announce the launch of WhoMovedMyBuyButton.com, which is now live in fully-functional beta form. Who Moved My Buy Button? allows authors to keep track of whether Amazon has removed the “buy buttons” from any of their books.

Simply register the ISBNs of any books you’d like monitored, and our web tool will check daily to make sure your buy buttons are safe and sound. If there’s a problem, we’ll e-mail you an alert.

Although we’ve launched WhoMovedMyBuyButton.com in response to Amazon’s wholesale removal of buy buttons from Macmillan titles, we believe Amazon should be monitored for years to come. Amazon’s developed quite a fondness for employing this draconian tactic (there’s a chronology at the website); it’s only grown bolder with its growing market clout.

Vigilance is called for: sounding off is our best collective defense. Register your ISBNs today — it’s free and open to all authors, Guild members and not. (Though we’d prefer you join.)

“Thanks, but we’ll do it ourselves” is pretty much what France said in response to Google’s effort to digitize the nation’s library, as reported by Scott Sayare of the New York Times. And its president, Nicolas Sarkozy, put his money where his mouth is by committing almost $1.1 billion to scanning the National Library’s 14 million volume collection. The government was reacting to an outpouring of nationalist outrage over what was perceived as an invasion of the country’s literary treasure trove.

As if to put le point d’exclamation on the government’s maneuver, a short time later a French court ordered Google to pay €300,000 – over $430,000 – in damages for breach of copyright stemming from litigation commenced in 2006. Google was also required to cease distributing digital copies of French books online because La Martinière Groupe, the publishers, had not authorized such use. The grounds for the French legal action, which was joined by the French Publishers Association representing some 400 publishers, were not dissimilar to those cited in the suit brought against Google by the Authors Guild and the Association of American Publishers, a suit that has eventuated in the settlement currently awaiting adjudication.

Do you think Google will get le message?

RC

Every Blogger owes a debt of gratitude to newspapers and magazines. This posting relies on original research and reporting performed by the New York Times.

Publishers are fighting the last war, but they’d better turn their heads forward if they don’t want to lose the next one.

The notice served by Random House to authors and agents, vowing to protect its backlist from predatory e-book developers, focused so much attention on previously published books that just about everybody took their eyes off an infinitely larger issue and an infinitely larger prize: the future.

When we look back at the fireworks triggered by Random House’s action we will see it as a noisy squabble over a relatively small number of contracts with ambiguous definitions of the word “book”. Very old books have entered the public domain beyond the reach of proprietary publishers. Very new ones, on the other hand, dating from around 1990, carry explicit language defining e-rights that no buccaneer would dream of challenging. That leaves a body of post-World War II titles predating the e-book revolution, and in a great many cases their contracts have just enough references to things like “information storage and retrieval rights” and “no competing editions” to intimidate most would be poachers. There may not be that many books worth fighting over, and certainly not that many worth suing over.

But there is one body of books that publishers will have to fight for if they are to avoid calamity: the ones that have not yet been published. Events of the last few weeks have introduced a concept so terrifying to book publishers that they have refused to think about it: the separation of e-books from the suite of rights that they have taken as God-given for centuries. Who can blame them for living in denial? Deprive publishers of e-rights and they become mere printers, game set match.

We don’t have to look at ancient history to see how another right that publishers took for granted was pried out of their clutches, and that’s audio. For decades “audio” was a sleepy little curiosity that no one felt worth fighting over. For many of us, it meant a boxed set of Caedmon records of Dylan Thomas reading his play Under Milkwood in 1953. But as recording media evolved from vinyl to tape to CD to streaming, the audio business became a billion dollar one, and authors and agents began demanding separation of those rights from the fundamental package just as they had done early in the 20th century with movie and television rights.

The turmoil of the last few weeks, capped by the dramatic announcement by business book author Stephen Covey of his intention to sell his e-book rights to Amazon, should make it crystal-clear that severance of those rights from a publisher’s franchise is now a viable option for authors. At the moment it is an option for big-name stars only, but don’t so many revolutions begin on the backs of the mighty? As we recently wrote, agents have been sitting on the sidelines waiting to hear the words “e-book” and “advance” used in the same sentence. Now they smell money. A recent all-expenses-paid junket by agents to Amazon’s headquarters may have had some influence on these developments (See Why Don’t Agents Want to Play? Amazon Flies a Bunch to Seattle to Find Out).

The implications of separation of e-rights are profound and for publishers they must be excrutiatingly threatening, for their biggest nightmare is that Amazon will become a publisher. Now that Amazon is a bidder for electronic rights, that day has arrived.

It must be said that publishers have brought some of this on themselves by pegging the e-book royalty rate at 25% of net proceeds or even less. There are enough independent e-book outfits offering 50% (including – full disclosure – E-Reads) that it was only a matter of time before authors and agents did the math and came to the conclusion that 50% was twice as large as 25%.

The nightmare is out of the box. Is there any way for publishers to get it back in and contain the threat? The answer is yes, if they are willing to bite the 50% royalty bullet. Earlier this week in connection with Random House’s dictum, the Authors Guild urged that very condition. Random House, said the Guild, should “start offering a fair royalty for those rights.” Their statement went on to say:

Authors and publishers have traditionally split the proceeds from book sales. Most sublicenses, for example, provide for a 50/50 split of proceeds, and the standard trade book royalty of 15% of the hardcover retail price, back in the days that industry standard was established, represented about 50% of the net proceeds of the sale of the book. We’re confident that the current practice of paying 25% of net on e-books will not, in the long run, prevail. Savvy agents are well aware of this. The only reason e-book royalty rates are so low right now is that so little attention has been paid to them: sales were simply too low to scrap over. That’s beginning to change.

While it’s well and good for publishers to pore over their old contracts, they really need to examine the boilerplate in their current ones, and where it says “25%” they should consider amending it to 50%. Otherwise they may see their digital book rights calve off irretrievably like glaciers falling into the sea.

Richard Curtis

Google, the Authors Guild, and publishing industry leaders have filed a revised and sweetened settlement with the court. To those who are still opposed to it despite every reasonable effort to placate them, a request:

Spare us the hypocrisy.

You can dress up your objections to the Google settlement in legal niceties and pious pleas for fairness, but the truth is you’re just jealous that Google took initiatives that you lacked the vision to take – until it looked like there was money to be made. So now you want to gut the settlement so you can get a piece of the action you didn’t raise a finger or spend a dime to earn.

Where were you when a treasure house of literary works was abandoned? And isn’t it odd that now that someone has come along with a viable plan to recover that treasure and wants to make a reasonable profit, you have suddenly become passionate bibliophiles and champions of fairness?

Google, the publishing industry, and the Authors Guild have walked an extra mile to satisfy your so-called “concerns”. A revised and sweetened settlement has been presented to the court. Do the right thing: honor the men and women of good will who have forged it, the corporate leaders who deserve to profit from it and the generations of humanity that stand to benefit from it.

Read the sweetened terms of the settlement here. For additional observations read Google Settlement Under Attack for Making Treasure Out of Trash.

Richard Curtis

Author’s Guild today filed an amended Google settlement with the court today and issued this interim statement:

Normally, we wouldn’t recommend a piece that in any way compares out-of-print books to sewage, but this piece in Slate is by Tim Wu, a Columbia Law professor and former clerk for Supreme Court Justice Stephen Breyer. Mr. Wu specializes in copyright law and telecommunications policy and is best known online as the popularizer of the net neutrality movement. He’s also chairman of the board of Free Press, a nonprofit dedicated, among other things, to combating media monopolies. For those wary of Google, his concluding paragraph is worth reading:

“But if you want to put Google in its place, the book project is the wrong way to do so. It is Google’s monopoly on Internet search that is valuable and potentially dangerous, not a quixotic project to provide access to unpopular books. So hold on to that sense of wariness, but understand that in this case, it’s misplaced. To punish Google by killing Book Search would be like punishing Andrew Carnegie by blowing up Carnegie Hall.”

Here’s Mr. Wu’s article: http://www.slate.com/id/2229391/pagenum/all

The editorial departments of some major publications found much to like in the settlement as well. Have a look–

The Economist: http://www.economist.com/opinion/displaystory.cfm?story_id=14363287
New York Times: http://www.nytimes.com/2009/07/29/opinion/29wed3.html
Washington Post: http://www.washingtonpost.com/wp-dyn/content/article/2009/08/07/AR2009080703382.html

We’re confident they’ll all find even more reasons to cheer the amended settlement. We’re holding to our core principles: lots of access to out-of-print books for readers, students and scholars; compensation and control for authors and publishers.

We’ll be back later with details on the amended settlement.

This emailed bulletin just received from the Authors Guild
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Amazon Accuses Someone Else of Monopolizing Bookselling

Amazon made it official yesterday, filing a brief in the Google case claiming that someone else might gain a monopoly in bookselling. It seems we’re compelled to state the obvious:

Amazon’s hypocrisy is breathtaking. It dominates online bookselling and the fledgling e-book industry. At this moment it’s trying to cement its control of the e-book industry by routinely selling e-books at a loss. It won’t do that forever, of course. Eventually, when enough readers are locked in to its Kindle, everyone in the industry expects Amazon to squeeze publishers and authors. The results could be devastating for the economics of authorship.

Amazon apparently fears that Google could upend its plans. Amazon needn’t worry, really: this agreement is about out-of-print books. Its lock on the online distribution of in-print books, unfortunately, seems secure.

The settlement would make millions of out-of-print books available to readers again, and Google would get no exclusive rights under the agreement. The agreement opens new markets, and that’s a good thing for readers and authors. It offers to make millions upon millions of out-of-print books available for free online viewing at 16,500 public library buildings and more than 4,000 colleges and universities, and that’s a great thing for readers, students and scholars. The public has an overwhelming interest in having this settlement approved.

Feel free to forward, post or tweet. Here’s a short URL for linking: http://tiny.cc/Zkcq5.

A major literary agency is urging its authors to opt out of the Google settlement. A lawyer is planning to file his opposition to the settlement.

Where were they when, year after year and decade after decade, a treasure house of literary works was abandoned? Along comes Google with a plan to recover those treasures from the trash heap and now those who abandoned them have become passionate bibliophiles. Or have they just become jealous that someone figured out how to make a profit on properties in which they had no interest?

From where I sit it’s not about books, it’s about money. In the course of rescuing countless works from the public domain and adding value to works that publishers, agents and authors deemed commercially valueless, Google figured out how to monetize those works. And now those selfsame parties want a piece of something they so recently turned their backs on. It reminds me of the oil producers who abandoned tracts because they couldn’t get oil from shale. Then someone figured out how to get oil from shale and now the oil companies claim they’ve been duped.

Perhaps a better analogy is the story of the Little Red Hen. None of her friends – the cat, the duck, the rat – offered to help her to sow the seeds, water the plants, till the soil, pull the weeds, harvest the wheat, thresh the grain, grind the flour or bake the bread. But when the bread was baked, all her friends wanted a piece.

The Little Red Hen said to them, “You shall have no bread.” And the moral of this classic childrens tale is that she had every right to say it to them.

So – why do I smell a cat, a duck, and a rat?

Though Google has sown the seeds, watered the plants, tilled the soil, pulled the weeds, harvested the wheat, threshed the grain, ground the flour and baked the bread, it has, after a concerted effort by responsible author and publisher organizations, worked with our community to make sure that everybody gets a piece of bread. But that doesn’t seem to be enough for some who have conveniently forgotten who did all the work, invested all the money, developed the technology, and embarked on a stupendous effort to identify the priceless treasures of civilization’s literary heritage and see to it that they will never be lost.

Google also did it to make a profit. And for that they are under attack. Forgive me for wondering about the profit motives of these knights who belatedly ride into our midst with flags of righteous indignation unfurled.

Richard Curtis

Cover of The Little Red Hen, Usborne First Reading series,