“Know Your e-Book Rights” – Panel Discussion Recap
Last week Publisher’s Weekly kicked off it’s Fall discussion series with a panel called “Know Your E-book Rights.”
The panel featured four panelists: Neil de Young, Executive Director, Hachette Digital; Paul Aiken, Executive Director, Authors Guild; Lloyd Jassin, attorney; and Scott Waxman, Waxman Literary Agency. Discussion focused mainly on the financial issues related to e-book rights, with a clear divide emerging between traditional publishing (Mr. de Young, and most of the audience members) and the other panelists, who mostly represented the authors.
All the panelists agreed that electronic books will ultimately increase readership and increase overall sales. According to Mr. de Young , sales data shows that the advent of e-books means consumers are reading more , while other panelists pointed out the prevalence of digital reading devices – in fact, two attendees in the front row were using iPad. The general consensus was that e-books present an opportunity to make a significant amount of money.
Mr. de Young, who for most of the discussion served as the de facto representative of traditional publishing, explained that the reduction in print costs for digital books does not make up for the additional costs of things like encryption, copyright protection, formatting, and online distribution. Since 90% of consumers still read print books, Mr. de Young said, there is now a demand for two warehouses, one physical, one digital, which also adds on costs to the publishing process, and ultimately necessitates a royalty rate similar to that of print editions.
From the other side, Mr. Aiken claimed that most of these digital costs were only one-time expenses (corroborated by Mr. Waxman), and that digital warehouses are much cheaper in the long run. He said that digital royalties could not remain at their current rate, and continued 25% royalties on e-books will cause authors to leave traditional publishers. Mr. Jassin thinks this issue will come to a head by 2013, when a new copyright law takes effect that will cause the contracts on many backlist titles to come up for renegotiation. He said that publishers have traditionally been unresponsive to the idea of new formats for books (citing a handwritten contract of Mark Twain’s that included a clause about new formats, with no mention of new royalties). Mr. Waxman, however, expressed faith that traditional publishing houses were full of “enough smart people” that they would adapt.
While debate over royalties dominated the discussion, the panelists found unexpected common ground in the brick-and-mortar bookstore. All four panelists agreed that the online shopping experience for books, whether e-books or print, was not as exciting or engaging for consumers as being inside a bookstore. Even the panelists who predicted a large digital shift would like to see bookstores stay in business, in order to maintain a physical, tangible presence for the book.
The takeaway is that keeping bookstores open – so that customers see books on shelves, and can browse them easily – is critical to the book industry’s health in the eyes of consumers. At the same time, the internal battle over royalties, with competition between different platforms and retail sectors to provide the most attractive rates – is becoming an increasingly critical part of the behind-the-scenes book industry landscape.
As usual, a stronger reliance on royalty rates, royalty calculations, and royalty payments have in effect made royalty management the most mission-critical part of competition for any publisher. It’s an area in which Excel spreadsheets and an overw0rked accountant no longer suffice. One certainty is that all of the major players involved are using a dedicated royalty management software.
