Your Humble Blogger came across Why Royalties? a blognote by Evan Schnittman, who is Vice President of Business Development and Rights for the Academic and USA Divisions of Oxford University Press. He is responding to Richard Charken, CEO of Macmillan (UK), who wrote a blognote called Royalties.
I know just enough about the publishing business to be completely baffled by it. I don’t understand how publishers, booksellers, writers, printers or distributors stay in business. “The state of book publishing requires a radical change to the standard business practices that have existed for decades,” Mr. Schnittman says, but surely there are no standard business practices that have existed for decades. Or if there are, during the whole time that patterns and costs of printing, distribution, and marketing have changed, then the economics of publishing are even stranger than I had previously imagined. Which is a lot, indeed.
As for royalties, I have very little to suggest about them. This business of gross revenue versus per-book price, and the cover price shenanigans, and the kicker with the escalator all seems like complication derived from complications introduced into the system. Mr. Charkin complains that the royalty is a “percentage [of the list price ] ... which applies in only a minority of cases. It doesn't apply to all sales overseas; it doesn't apply to nearly all sales made in supermarkets, Internet bookshops and many bookshop chains. Macmillan wants to “simplify our royalty system without compromising its accuracy and reliablity.” But what is difficult about giving the author an agreed-upon number of pennies for each book sold, that number based on the list price? The answer is not figuring out, from the number of books sold at various discounts, how much the author is due, because the various discounts make no difference in that formula. No, the answer is figuring out how to project (and therefore maximize) profits, with the various discounts failing to interact easily with the standard formula.
It’s an accounting problem. Which would lead me to just claim that it’s all bull and a yard wide, except that accounting is, in fact, a necessary and proper part of doing business. So I’m back to having nothing. Gentle Readers, what do you have?
Tolerabimus quod tolerare debemus,