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Authors Sue Publisher for Giveaways and Book Club Sales

We’ve sometimes given away books here at DearAuthor. Usually they are books that we have purchased but sometimes they are gifts directly from the publisher. In fact, in December, Penguin is giving away five copies of Joanna Bourne’s The Spymaster’s Lady here at DA to help publicize Bourne’s book. I want to do whatever I can to help Bourne be a success because her writing (at least in the book that I have read) is just phenomenal. It never occurred to me that by giving away these books, the authors are deprived of the royalty. I knew that they wouldn’t get a “sale” to count toward their bestseller list numbers but I never made the next logical step in that equation.

Five authors published by Regnery Publishing are suing the publisher’s parent company, Eagle Publishing, charging that the parent company is conspiring with book clubs and other organizations owned by the same entity to deprive the authors of rightful royalties.

Authors royalty rates for book club purchases, remaindered books and other organizations are lower than those for purchases made at a retail stores. Thus, the authors allege, by diverting sales away from retail outlets to “wholly owed subsidiary organizations” of the publishing conglomerate, the authors are earning a lower royalty. The authors also specifically charge that the publishing house is giving away copies to book clubs, newsletters and other organizations, to “avoid or substantially reduce royalty payments to authors.– 

If this case is decided in favor of the authors, I can foresee future publisher funded giveaways drying up. I don’t see ARC giveaways being problematic because those don’t earn royalty payments, but finished copies? Yeah, that could become a thing of the past.

Via New York Times.

Jane Litte is the founder of Dear Author, a lawyer, and a lover of pencil skirts. She spends her downtime reading romances and writing about them. Her TBR pile is much larger than the one shown in the picture and not as pretty. You can reach Jane by email at jane @ dearauthor dot com

13 Comments

  1. Ann Bruce
    Nov 07, 2007 @ 14:11:05

    Okay, I can understand being ticked off because it’s hitting the pocketbook, but don’t these authors want to get their books in the hands of readers? Readers who might get hooked on an author they would otherwise skip over when seen on the bookstore shelf? Readers who might buy their next release, and the one after that, and the one after that?

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  2. sherry thomas
    Nov 07, 2007 @ 14:39:35

    Regnery Press, that would be the outfit that published the swiftboating book, non?

    Here’s what Wikipedia has on the suit:

    In November of 2007, five authors whose works have been published by Regnery filed suit against the company. The authors allege that Regnery “orchestrates and participates in a fraudulent, deceptively concealed and self-dealing scheme to divert book sales away from retail outlets and to wholly owned subsidiary organizations” of Eagle Publishing, Regnery’s parent corporation. The authors who filed suit are Jerome Corsi, Bill Gertz, Robert (Buzz) Patterson, Joel Mowbray and Richard Miniter. Miniter said that meant that although he received about $4.25 a copy when his books sold in a bookstore or through an online retailer, he only earned about 10 cents a copy when his books sold through the Conservative Book Club or other Eagle-owned channels.

    It looks to me less like a fight about giving away published copies than that the authors believe the publisher is cheating them.

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  3. DS
    Nov 07, 2007 @ 14:42:42

    I don’t think review copies concern them. And I doubt if many Regnery authors are going to go on to great literary careers. In fact a quick scan of their catalogue suggests that a number of them are what I would consider crack pots. But they claim to have 80,000 members of their conservative book club. If the market for a book is mainly limited to people who are interested in

    After the Internet: Alien Intelligence , Dr. James Martin, 2000, 0-89526-280-0, hardcover, $27.95, “Technology guru James Martin shows in his groundbreaking book that the Internet is only the beginning of the radical changes computers will bring to our lives.”

    and the anti-Holmsian adventures of Inspector Lestrade– Holmes was apparently too liberal for them, then 80,000 might make a big dent in things. I think I’m going to get some popcorn and sit down to watch this one.

    (In my

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  4. Jane
    Nov 07, 2007 @ 14:50:16

    I know that the claim is about fraudulent sales, but as I said on John Scalzi’s site, (in agreement with him) ultimately the question that will have to be answered is what loss of sales will have occurred. there is not a remedy for every wrong in the court. Many a case is lost on the “no harm, no foul” theory. It’s very effective.

    But even beyond that is the claim that books that are part of “giveaways” are included in the lawsuit suggesting that the publisher has some duty to recompense an author for books given away. I.e., how is a giveaway to subscribers of an Eagle publishing newsletter any different than a publisher giving away copies on a website. The idea is still the same – the diversion of royalties.

    If the bookclub is a legitimate business channel, then it seems to me the thin profits earned from a bookclub sale is a matter of poor contract negotiation. How many other bookclubs are there that are appropriate business channels for conservative books? And is it fraudulent to divert sales there than through retail channels? I think it is an interesting case but one that could have greater ramifications.

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  5. DS
    Nov 07, 2007 @ 14:58:41

    Hit the submit button too quick. meant to say in my experience Regnery books also show up in huge clumps in Thrift Stores and outlet mall stores that sell remainders.

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  6. TeddyPig
    Nov 07, 2007 @ 16:23:57

    This seems so bizarre and after the fact.

    Did they not checkout Regnery Press before signing a contract with that firm?

    Seems that this publisher’s business model is the key issue since this publisher does this with every book they publish it does not sound like they are singling these particular authors out in this case.

    So proving that these authors will lose more money than everyone else is gonna be rough.

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  7. TeddyPig
    Nov 07, 2007 @ 16:27:39

    If the bookclub is a legitimate business channel, then it seems to me the thin profits earned from a bookclub sale is a matter of poor contract negotiation.

    This!

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  8. Nicole
    Nov 07, 2007 @ 18:34:59

    Not completely on target, but I work at a Half Price Books and I’m amazed sometimes at the remainders that we get of trade-size romance titles. And sometimes they haven’t even been out a year when we get them. Even occasionally hardbacks that haven’t gone to paperback. Seems publishing in general is very strange.

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  9. Jane
    Nov 07, 2007 @ 21:08:40

    I wonder how much of the print run has to be unsold in order to be remaindered.

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  10. Nicole
    Nov 07, 2007 @ 22:00:54

    Wish I knew. It’s mostly Berkley stuff that I see, it seems.

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  11. Caroline
    Nov 08, 2007 @ 10:42:32

    Most authorsare thrilled when the publisher gives away their book(s); no, you don’t get a royalty on those copies, but that’s because the publisher isn’t making a penny, either. Giveaways mean the publisher is behind the book, trying to brew up interest in it or to gather more fans for the author. It’s a form of advertising which is free for the author.

    But usually they aren’t giving away a significant portion of the print run. Suppose they are giving away 500 copies of the Joanna Bourne book (which sounds just excellent, btw; I’d like to get my hands on a copy, free or not). If her print run is 50,000-a decent figure for a debut book getting some publisher support- that’s only 1%, and the hope is that each of those giveaways will lead to multiple sales that might not have happened without the publicity of a giveaway.

    If Regnery is giving away huge numbers of books, yeah, they’re cheating their authors, but…Regnery has to pay to have those books printed, so they lose money on every giveaway. No publisher guarantees any particular distribution, but it sounds like Regnery either doesn’t have good distribution to retail outlets or finds it noticeably more profitable to sell books though their own book clubs. The big NY publishers already have retail distribution channels established, and the trend is away from bookclubs altogether I think, so I don’t think this case will scare them off giveaways.

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  12. DS
    Nov 08, 2007 @ 10:58:15

    I don’t want to siphon people from Dear Author to another blog, but John Scalzi has some interesting comments and information about book clubs and authors at http://scalzi.com/whatever/?p=110

    I remember reading a rather acerbic letter by Heinlein about the evils of book clubs in Grumbles from the Grave– a collection of his letters that was published after his death. This was dated from the fifties and I think he was getting 11 cents a book then.

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  13. Lisa
    Jan 08, 2008 @ 03:31:33

    If the publisher owns the book club then yeah, that smells very foul. As an author, I’m glad they’re suing. Can’t wait to see how this one turns out!

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