Did Harlequin Publishing Deceive Their Authors?

Yesterday I read this article on J.A. Konrath’s blog:

“Three authors have just filed a class action suit against Harlequin publishing, which belongs to TorStar Corp., a Canadian publishing company.

One of them, Ann Voss Peterson wrote a book that Harlequin published, and she made 2.4% royalties per e-book copy sold. One of the reasons for this was:

While most of my books are sold in the US, many are sold under lower royalty rates in other countries.

In this particular contract, some foreign rights and – ALL e-book royalties – are figured in a way that artificially reduces net by licensing the book to a “related licensee,” in other words, a company owned by Harlequin itself.
.

Here’s an example: Harlequin has an e-book it lists for $3.99. It sells that to Amazon at a wholesale price of $2.00. The author should make $1.00 for each $3.99 e-book that Amazon sells. But instead of selling directly to Amazon, Harlequin sells the e-book to Company X for 12 cents. So the author only gets 6 cents. Company X than sells the same e-book to Amazon for $2.00, but because they are a sub-licensing company, they don’t have to pay the author anything.

Sub-licensing is common. This is all fine and legal. So why are authors suing Harlequin? Because Harlequin and Company X are the same company!  No publishing company would ever sub-license rights for a paltry 6%, unless it was selling the rights to itself. Does Harlequin really expect a judge to believe that it sells a $3.99 e-book and only makes 6 cents? And according to the complaint, the 6% was not equivalent to the amount reasonably obtainable from an unrelated party, as required by the publishing agreements.

Do publishers have such a sense of entitlement, and do they believe that authors are so beneath them, that this is a fair and honest business practice?” Read J.A.Konrath’s full story and the court complaints. It makes for an interesting reading!

 

If you enjoyed this blog post, please feel free to check out all previous posts (there are almost 500 of them : ) if you haven’t already. Why not sign up to receive them regularly by email? Just click on “Follow” in the upper line on each page – and then on “Like” next to it.

Follow on Twitter: @111publishing

And don’t forget to spread the word on Twitter, Facebook, Google+, Tumblr or StumbleUpon – or other social networking sites of your choice) – other writers might also enjoy this blog and find it useful.

.

.
Hyper Smash

Pingates

Social tagging: > > > > >