21 December 2011

I See Dead People (and Lawsuits)

I've been spending the last week-plus surrounded by various types of dead bodies. (And the house sure stinks because of it... although one should also recall that the term for the back files of a periodical is a "morgue".) Zombies, however, don't make for great blogging. At least not for me.

  • The first notable death in question is Christopher Hitchens. This is the loss of an interesting voice in the church-versus-state realm that will be missed... but I'm not going to insult what he stood for by wishing that he "rest in peace," because he is (everybody is). I may not have agreed with everything he said — in particular, his support for the amoebic-dysyntery-like spread of "intervention" in Iraq and Afghanistan — but he was always entertaining, if nothing else.
  • The second notable death in question is one of the true tyrants of the world, Menta Lee-Il's uncle Kim Jong-Il. Mr(?) Kim has been more responsible for destabilization in nuclear proliferation in particular and in East Asia in general than any other single individual in the last two decades. Interesting, given the history of his treatment by Jon Stewart, that he "chose" to die right before a holiday week at The Daily Show so that it won't be fresh news by the time they're back...
  • Now turning to someone who probably wishes he was dead — or would if he had any shame, which I cannot guarantee based on his other writings — consider the ignorance about Amazon and local bookstores spewed forth by not-famous-author Farhad Manjoo. I'm not going to spend time on how the author blogosphere has responded; instead, I'll try to educate y'all on a much more subtle way that Amazon is not as good for authors as local bookstores are: Royalties. In short, particularly for older works, Amazon sales often pay less to the authors.

    Do I have your attention now?

    This involves some simple math and complex contract interpretation, so please digest this whole sausage first. When authors review contracts to see what they should be getting for royalties, they tend to focus on the obvious stuff: x% of list price. That is, indeed, the default royalty calculation for printed books (at least at present; more and more publishers are pushing toward a y% of net model, but even those contracts follow the rest of this paragraph...). The kicker, though, is the "high discount" clause, which cuts the royalty in half for copies "sold"1 at a "high discount." As y'all may well be aware — and is the factual context even if you're not — books are sent to bookstores, including Amazon, at a discount from the list price. The ordinary terms are called the "long" or "trade" discount. Historically — that is, from the late 1960s to about 2003 or so — this was a fairly iron-clad 40%. Sometimes, though, there were "special deals" offered at higher discounts, which the publisher then demanded be treated differently. If you're cynical, you can probably spot what's coming...

    The high-discount clauses typically kick in at a 50% discount from list, at least for contracts negotiated before mid-2004 or so (and even for the vast majority of contracts negotiated after that time). The problem here is that Amazon as its standard term demands a discount of greater than that from many publishers, particularly independent small presses (which, BTW, one is most likely to encounter at an independent bookstore); as of early 2010, the standard terms demanded of Publishers Z1, Z2, Z3, and Z4, for example, was 52%. That would trigger the high-discount clause in older contracts (and I've confirmed that Z2 and Z3 have invoked that clause) for calculating author compensation for every sale through Amazon. What makes this worse is what will happen when Z4 is acquired by a conglomerate and becomes, at most, a brand subset — like Buick — because the existing distribution agreements will continue until renegotiated...

    Now, this does not hold true for all publishers, or all books, or all of anything, sold through or via Amazon; one of the ways that the Big Brazilian River has thus far avoided being dammed by the antitrust authorities is that it maintains the pretense of negotiating contracts with vendors. Similarly, not all authors have been so foolish as to accede to a 50% trigger for the high discount clause (although, to be honest, I've yet to meet an agent or author who had considered this issue until I pointed it out). Nonetheless, there's a substantial chance that when someone buys a book from Amazon that was printed by a publisher that is not one of the Big Six (and even if it was), the author is getting a lot less money from that transaction than if that same book were purchased via the (now, lamentably, closed) Pages for All Ages here in Chambanana, or the Elliott Bay Book Company in Seattle, or the Tattered Cover in Denver, or any other independent bookstore.

  • Speaking of price manipulation and how that affects authors, Michael Chabon is rightly bitching about e-book royalty rates, and the antitrust lawsuits concerning the misnamed "agency model" have been moved to New York, consolidated there, and left under the care of the lawyer who filed the first one. For some reason, nobody has asked me to be an expert witness on this stuff. Yet. (Or, given who some of the other counsel are on this, ever...)

  1. This is not the time or place for spending a lot of time on the returns system, or the distinction between consignment and sales, or anything else like that. They're all critically important, but for the purposes of this paragraph they're red herrings. Stinky, rotting red herrings that are poisoning the rest of the fish barrel, but still...