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Industry News: e-Books Rule Fiction, Harlequin Royalty Lawsuit, Penguin Buys Author Solutions

July 21, 2012

E-Books are Top Format in Adult Fiction

More adult fiction books were sold in e-book format last year than any other format–you know, the old fashioned stuff like hardcover and paperback. Revenue on e-books rose more than 200% last year, jumping from $869 million in 2010 to nearly $2.1 billion. Print sales taken together still pulled in more than five times what e-books did, netting more than $10 billion dollars in 2011, but that’s down 11% from 2010. The sales data came from BookStats, an annual survey funded by the Book Industry Study Group and the Association of American Publishers.

What this means to you: If you can’t imagine yourself ever reading an electronic book, you might want to start. The e-book market continues to climb, even as the publishing industry stagnates. Publishers are just starting to experiment with enhanced e-books. And the current competition between Apple, Amazon, Barnes and Noble, and others, is likely to push e-reader enhancements even more as each of the players competes hard for market share. Ironically, no data was reported for non-fiction, which has a much lower adoption rate. Text books tend to lag, too, as college students find current e-readers inadequate for their purposes.

Harlequin Sued for e-Book Royalty Shortfall

Three romance authors are suing Harlequin, alleging that they short-changed their authors in paying e-book royalties. The suit seeks class-action status for authors who wrote for Harlequin of any of its imprints between 1990 and 2004. The suit alleges that Harlequin has reneged on an agreement to pay authors 50% of the book’s cover price. Instead, the suit says that Harlequin invented a Swiss firm that must license its books for them to be published digitally. Under the terms of the licensing agreement, authors are only paid between 6-8% of the cover price. Harlequin denies the charges, saying its authors are compensated fairly. And now the lawyers get involved.

What this means to you: Although you are most likely not a Harlequin author, the outcome of this case has obvious implications. If Harlequin did create a new entity with a claim it has to license e-books through that firm, and if the author’s cut is slashed–and if all this holds up in court, other publishers are likely to try a similar approach.

Pearson (parent of Penguin) Buys Self-Publishing Company Author Solutions

Saying that their deal marks the mainstreaming of self-publishing, Penguin CEO John Makinson and Author Solutions Inc. (ASI) CEO Kevin Weiss gave each other big, sloppy kisses this week in announcing Pearson’s purchase of ASI for $116 million. ASI had previously made news with its partnerships with other publishers–and those partnerships will continue. Penguin will use ASI to support its Book Country self-publishing service. The purchase does not include plans for layoffs. Makinson said that Penguin is interested in its expertise in data analysis, online marketing, and “user-generated content”–otherwise known as self-publishing.

What this means to you: The lines between publishing and self-publishing continue to blur. Makinson pointed to Amanda Hocking and EL James in noting the success of self-published writers. And while it’s true there are periodic home runs hit by self-pubbeds, in general, self-published works typically lack the quality and backing to make a huge splash. The marketing language around the deal hints at “wider distribution of selected ASI authors through Penguin channels.” Note the word selected. Essentially, if you hit a home run, you might benefit from this. But check your contract language to ASI closely to make sure Penguin doesn’t have rights of first refusal for ASI works.

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