Publishers Weekly E-book Rights Panel Focuses on the Financial

In Global Trade Talk by Helen Gregg

By Helen Gregg

On September 28, Publishers Weekly hosted a panel called “Know Your E-book Rights,” the first event in its fall discussion series. In Random House’s Café Auditorium, the four panelists -– Neil de Young, Executive Director, Hachette Digital; Paul Aiken, Executive Director, Authors Guild; Lloyd Jassin, attorney; and Scott Waxman, Waxman Literary Agency –- spoke 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. Mr. de Young of Hachette said early sales data show consumers to be reading more with the advent of e-books, and several of the other panelists pointed out the prevalence of reading-capable devices (two members in the front row alone were using iPads). All agreed 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 and the Big Six, 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.

Mr. Aiken was his biggest advisory on this point, claiming 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 in 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). It was Mr. Waxman, however, who seemed to have the most faith that traditional publishing houses were full of “enough smart people” that they would adapt.

Despite the debate over royalties that dominated the discussion, the panelists found unexpected common ground –- 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 tstay in business so that the books will continue to have a physical, noticeable presence in the world. While there may be an internal battle over royalties, the industry’s real battle is keeping bookstores open and keeping books in the world of the consumer.

About the Author

Helen Gregg