Most of the resentment or suspicion that authors and agents feel toward publishers stems from royalty accounting based on returns. Authors, outraged that creative bookkeeping permits publishers to hold excessive royalties in the name of reserves against returns, consider the system fraudulent. Their viewpoint is easy to understand when you remember that returns are a manipulable form of currency. The temptation to manipulate them intensifies in recessionary or inflationary times when publishers seize upon royalty reserves as the most obvious source of cash to relieve their liquidity problems or earn some extra interest. Publishers cannot with impunity stop paying their printers, their landlords, their paper suppliers, or their employees. But by a stroke of the pen, raising the holdback on royalties from, say, 50 percent to 75 percent, a publisher can liberate enough cash to meet the urgent demands of all those other creditors - at the expense of authors. How, then, could authors, suffering liquidity problems of their own, not feel bitter? Nor is their mood improved to see their remaindered books, on which they receive little or no royalties, selling briskly in used-book stores.There is a great kick at the end.
Are there solutions to this dilemma? There are, but they all call for radical changes in the way we think about books, sell them, and account to each other for them. For any plan to succeed, it must: (1) allow publishers to print only as many copies as are necessary to fill orders, (2) put distribution on a nonreturnable basis, (3) enable publishers to make a profit, (4) encourage bookshops and chain stores to make money remaindering books on their own premises, and (5) provide authors with honest, easy-to-understand accounting. That's a tall order. Some gratifying attempts have been essayed, but they all failed because they were not radical enough, nor were they adopted on an industry-wide basis.
Friday, December 05, 2008
The End Predicted
Richard Curtis (E-Reads) has penned an interesting status report on the downward spiral of publishing: