Publishers cannot pay higher royalties because the money has to go to fighting piracy

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.

In the FutureBook blog, Philip Jones notes that there was some skepticism from the audience, and also finds it a bit odd that a PA executive was making the assertion given that in a recent report the PA examined two books and concluded that P2P infringement represented only 1/20 of 1% of sales. “It would be wrong, therefore, to overstate the extent of online infringement for published content at this time,” the report said.

And publishing guru Mike Shatzkin told The Bookseller, “No publisher I know has actually done any serious research into the commercial impact of piracy, and therefore I would not at the moment spend a lot of money containing it.” Amazon doesn’t seem to be worried about it, offering 70% royalties to its self-publishing authors as it does.

Certainly, publishers may think they’ve found the perfect solution to get authors off their backs—piracy is just about the only bigger “hot button” than royalties they have. If the publishers can convince the authors that this is the reason, it then shifts the blame for not only piracy but also low royalties toward pirates and away from publishers.

But on the other hand, it all seems awfully convenient to me. “We’d like higher royalties, please.” “Look! Pirates!” Authors are, for the most part, intelligent people, and I have a hard time imagining many of them buying this rationale for very long if publishers aren’t able to provide some serious proof of what they’re spending and the effectiveness of the efforts.

(For that matter, how effective are these anti-piracy efforts? The RIAA poured $64 million in cash down the mass-lawsuit funnel to earn back only $1.4 million, benefiting nobody but the lawyers, and there’s no proof the lawsuits acted as any kind of a deterrent—illicit music downloading continues to this day. More than one person has remarked that the recording artists it claimed to represent would have been a lot better off if the RIAA had just taken that $64 million and divided it up evenly among them instead. Hmm, like, say, publisher piracy-fighting efforts and royalties?)

Piracy is a favorite bugaboo of the content industry, largely because they can (and often do) make up whatever numbers they like to paint it as a menace. It’s used as an excuse for all sorts of things, from the imposition of DRM to, as we now see, not paying royalties. Sooner or later, people are going to start realizing that this emperor has no clothes.

15 Comments on Publishers cannot pay higher royalties because the money has to go to fighting piracy

  1. Please send me a list of anyone who accepts this as valid. I would like to send those individuals an email I received from Nigeria…

  2. Hahahaha. I had to laugh. Right. Publishers fighting piracy is costing them a bundle. That’s a sign of desperation.
    As a NY Times bestselling author with over 45 books published, I just went indie, launching my latest title on my own today. Authors need to think not about where things are now, but where they will be a year from now.
    Also, publishing is operating on the same schedule before the advent of the computer. Book deals being made now are for pub in 2013 and 2014. I published myself, because today is the 150th Anniversary of the Civil War and my book is about the Civil War. No trad publisher could have done it, nor would they have tried. In the same way they’re trying so hard to stop piracy.

  3. I don’t a lot of authors….are they really likely to swallow this stuff ?

  4. Well there you are! Authors will just have to lump it as part of their civic duty.

    Next up: A 5% cut in royalties due to the publishers bravely doing their bit in the war against terror.

  5. When you have Scott Turow, president of the Authors Guild, saying piracy is the biggest problem facing authors today, that doesn’t help matters. He also says ebook royalties should be higher, but that piracy is a bigger problem. So yes, I’d have to say that some authors would accept the problem as valid, though they probably wouldn’t be as happy with the solution.

  6. This problem is easy to fix. Publishers can simply offer potential authors two options:

    1. Low royalties with piracy enforcement.

    2. High royalties with no piracy enforcement.

    Since anti-piracy efforts seem to do little good anyway, I suspect most authors would opt for #2. Some might even assume that pirate sales help legitimate sales. A guy who pirates an ebook and likes it then tells a friend who buys it. That beats being ignored.

  7. Oh man.

    What publishers fail to realize is that piracy is a demon of their own making.

    They limit geographic availability of their books and they insist upon high prices. In other words, they artificially limit worldwide availability and accessibility to readers with dollars in hand who have no other means to acquire these books.

    DRM is completely useless. All it does is punish honest customers and then add expense to the cost of the book, and to the cost of delivering that book. DRM is expensive to retailers because they need to deal with the customer support emails from folks who can’ figure out how to unlock their books.

    The solution to piracy is to trust your customers, make your books as broadly available as possible so it’s more convenient to buy than pirate, and offer your books at a fair, affordable price. At that point, the folks who still insist on pirating are the people who never would have purchased the book anyway, so they don’t really represent a lost sale.

    Indie authors will inherit the future of publishing because they think differently.

  8. I thought April Fools was 11 days ago.

  9. They can’t pay their authors more because of all the money being spent to fight piracy?
    Pu-u-u-uleeeze!

    MarkChan’s post may say it best: “Please send me a list of anyone who accepts this as valid. I would like to send those individuals an email I received from Nigeria…”

  10. No! No! No! There’s a misunderstanding here. The publishers aren’t talking about the old-style pirates, the villains who lent books to friends or photocopied for a class. There’s a brand new type of online pirate, led by Cap’n Mark Coker and his band of Smashers, threatening the trade-routes, hacking away at prices, cocking a snook at the establishment. They’re surely right to draw attention to this outrageous behavior – it’s just unforunate that the authors have to walk the plank.

  11. If publishers are going to claim that “piracy” is what’s keeping them from offering better royalties, they should state how much they’re spending on fighting piracy, and what they’re spending it on.

    Authors may want to choose publishers based on which ones are spending their money sensibly. Or they may decide that the risks of self-publishing are worth not having to watch companies waste money that could be theirs on security theater software.

  12. It’s understandable. I’m sure there are lots of pirates to fight on the estates they’re trying to buy in the Caribbean. At least they’re being honest for a change. “Johnny Depp, get out of my jacuzzi”

  13. Wow! Would a publisher exaggerate about something like ebook piracy? Knock me over with a feather.

  14. The vast majority of authors I know have to fight piracy on their own without the aid of their publisher.

    If the publisher does fight piracy, it’s usually the author who must do the many hours of online work finding the pirates and the means to send them a cease and desist notice so a lawyer can send a form letter.

  15. WHAT?! Before, publishers were just claiming copy editing, cover art & a need to ‘outsource’ ebook coding as the reason for low ebook ropyalties. NOW they’re claiming piracy as the reason? And how are their authors supposed to verify this?

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