Harlequin Authors Sue Publisher Over Creative Royalty Calculations
from the I-get-how-much? dept
Creative accounting from legacy players is nothing new. We have seen many repeated examples of ways in which legacy publishers, labels and producers try to limit the amount of money they pay out to the artists they depend on for their incomes. We have the fact that Return of the Jedi, despite being the 15th highest grossing film of all time, is still not profitable. There is also the crumple zone inducing idea from the major labels that digital sales are licenses except when they are not. So would it be a surprise that we would find a similar situation within the legacy publishing industry?
Enter Harlequin, publisher of fine romance novels. Harlequin has been accused, according to a class action lawsuit, of using some very creative accounting to reduce the ebook royalty rates paid to authors from 50% of the net receipts to a paltry 3-4% rate:
This lawsuit results from Defendant Harlequin Enterprises Limited, the world’s leading publisher of romance fiction, depriving Plaintiffs and the other authors in the class, of e-book royalties due to them under publishing agreements entered into between 1990 and 2004. Harlequin required the authors to enter into those agreements with a Swiss entity that it created for tax purposes, and that it dominates and controls. However, Harlequin, before and after the signing of these agreements, performed all the publishing functions related to the agreements, including exercising, selling, licensing, or sublicensing the e-book rights granted by the authors. Instead of paying the authors a royalty of 50% of its net receipts as required by the agreements, an intercompany license was created by Harlequin with its Swiss entity resulting in authors receiving 3% to 4% of the e-books' cover price as their 50% share instead of 50% of Harlequin Enterprises' receipts.
What this means to the authors can be illustrated by an e-book with a hypothetical cover price of $8.00. The “net receipts” made by Harlequin Enterprises Limited from the exercise, sale or license of e-book rights would be at least $4.00, of which authors would be entitled to $2.00 based on their 50% royalty. Computing the “net receipts” based on the “license” between Harlequin's Swiss entity and Harlequin Enterprises, Plaintiffs’ 50% royalty amounts to only 24 to 32 cents.
Basically, these authors are just not happy with these reduced royalty rates. The authors claim that Harlequin Switzerland was set up for no other purpose but to syphon out as much money as possible before calculating any royalties for the authors. Hardly something that any publisher should do if they actually care about their business.
There was once a time where such a tactic would not have reached the point of a lawsuit. There was a time when publishers actually had a strangle hold on publishing and could force any terms they could conceivably get away with. However, with the introduction and proliferation of self publishing, that stranglehold is weakening. As authors are looking at the deals they are getting from publishers vs the deals self published authors are getting from the likes of Amazon and even Apple, they are beginning to lash out.
Of course, if Harlequin were smart about this, meaning it realizes the mistake of using such accounting methods, it would seek a quick settlement that results in the authors getting paid their proper royalties. If for some reason, as many publishers claim, it cannot afford to pay authors the true 50% then it will see a quick decline of new authors and a drop off of existing authors. Then, it will fail.
Filed Under: authors, ebooks, royalties
Companies: harlequin
Comments on “Harlequin Authors Sue Publisher Over Creative Royalty Calculations”
Cannot help myself..sorry XD
Well, what did the authors expect when they went to a publisher named after The Joker’s sidekick?
Re: Cannot help myself..sorry XD
Or a horrifying birth defect. (Don’t look that up.)
(No, seriously, don’t look that up.)
Re: Re: Cannot help myself..sorry XD
Oh good god!!! Horrifying doesn’t do that defect justice.
Re: Re: Re: Cannot help myself..sorry XD
Not half as horrifying as what you did to a young girl in 1990. I’m posting this overused meme in the hopes it will keep me from looking that defect up.
Re: Cannot help myself..sorry XD
Theres a word for this. When popular definition surplants the original definition, and use of the original definition is confused as having been based off the new definition.
But I dont know what it is.
Anyways.. Harley Quinn is named as such because its a “clever” pun on the word harlequin which is as old as dirt itself. You can look up the definition of harlequin yourself. You will find it fitting to the character Harley Quinn on many levels.
Re: Cannot help myself..sorry XD
Actually Harlequin is a hundreds-year-old character from the Italian carnival traditions and folk tales… not everything was born in America…
So much for paying the artists.
Thanks for defending the artist for a change
As someone who always defends the content creator, I’m surprised to find that you’re offering any sympathy for the non-billionaires who are pushing around the creators. Usually all I hear is
(1) screwing over the artist is impossible to stop whether it’s done by piracy or accounting so why bother trying to stop it;
(2) creators should just chill out whenever anyone wants to make a copy of their work without paying them;
(3) suing anyone is wrong, wrong and wrong again;
(4) trying to stop this will break the distribution mechanism whether it be the Internet or the publishing network
It’s nice to see some sympathy for law suits to enforce copyright and the fact that artists don’t need to take it when either Big Search or Big Publishing is pushing them around.
Alas, my guess is that you’re only doing this because of the old enemy-of-my-enemy-is-my-friend rule. The publishers are annoying to Big Search and therefore they must be bad. Anything that hurts an enemy of Big Search, Big Hardware or Big Piracy.
Once this suit if finished, I’m guessing you’ll go back to arguing that pirating Harlequin romance is cool — unless you’re in the accounting department at Harlequin. Sigh.
Re: Thanks for defending the artist for a change
What about all the coverage of Amanda Palmer? Or the older coverage of Kevin Smith? Techdirt loves content creators and hates “gatekeepers”. I highly doubt you’re actually confused about that.
Re: Re: Thanks for defending the artist for a change
See this one for the same thing done by the Music Labels:
http://www.techdirt.com/articles/20100712/23482610186.shtml
And this one for Movie Studios:
http://www.techdirt.com/articles/20100708/02510310122.shtml
And now we have book publishers. As it turns out, they’re all crooks.
Re: Re: Thanks for defending the artist for a change
Yes, you’re pointing out how TechDirt has changed. Paywalls used to be bad but now they’re good if you’re Louis CK or Kevin Smith. Maybe one day the NY Times and the WSJ will join that elite group.
TechDirt has a tortured relationship with content creators. Mike claims to love them the same way that he claims to support copyright. It’s just if the content creators ever do anything to threaten the revenue stream of his favorite gatekeepers– Big Search, Big Hardware and Big Piracy– he takes the side of the billionaires.
Really. TechDirt loves gatekeepers as long as they’re not sharing any money with the content creators. The creators are supposed to be cool and not sue anyone. Or as someone in Texas said, “If you’re going to be raped, you might as well lie back and enjoy it.”
It’s great to see them understand that sometimes lawsuits are necessary.
Re: Re: Re: Thanks for defending the artist for a change
What a nut job you are.. Big Piracy?!?!, wtf is that, piracy is free, remember copytard?
Re: Re: Re:2 Thanks for defending the artist for a change
Sure it’s free. Megaupload was free but they keep slowing down the feeds until you suck it up and actually pay. How do you think Kim Dotcom ended up with that huge estate? By giving away the bandwidth for free? Don’t be a fool.
The same goes for all of the USENET sites that charge for downloads. All of the sites try to give a tiny, useless amount of services away for free and then they charge for everything else. That’s Big Piracy and boy is Kim Dotcom Big.
Re: Re: Re:3 Thanks for defending the artist for a change
Man, I’ve told you before you’re an idiot who obviously never used Megaupload.
I used it. I got ROMs from there (which are sadly no longer available).
Megaupload DID NOT slow down “the feeds” until you sucked it up and paid. You could download as much as you wanted (of course the limitation was only one file at a time) with a usual speed of around 300 kb/s (which, fyi, isn’t that slow).
You weren’t forced to pay if you didn’t want to and the speeds weren’t bad at all.
YOU ARE A FOOL.
Oh and the comment demolishing yours below is also mine. I hate writing from my phone it always just puts Anonymous Coward (and never lets me see all of what I write at times, but I guess that’s what I get for using experimental or Alpha ROMs).
Re: Re: Re: Thanks for defending the artist for a change
Technically, you’#re correct – you have to initially pay upfront. However, that’s also called a transaction: I pay you, and you give me somethign in return. A paywall is where you have to pay in order to access something that was formerly free (c.f. Liverpool Museum, The Times.)
Re: Re: Re:2 Thanks for defending the artist for a change
The WSJ never gave away their copy for free but everyone says that their news is behind a paywall. I’ve never heard anyone use your description.
And the museum was probably paid for with taxes which were never free either.
Re: Re: Re: Thanks for defending the artist for a change
“Really. TechDirt loves gatekeepers as long as they’re not sharing any money with the content creators. The creators are supposed to be cool and not sue anyone. Or as someone in Texas said, “If you’re going to be raped, you might as well lie back and enjoy it.”
Hey bOB! Welcome back! Please GFY, STFU, DIAF, FOAD and any other acronym you’d care to shove up your vile rapist asshole!
Your hateful comments are hereby tl:dr and auto-report from now on.
Re: Re: Re:2 Thanks for defending the artist for a change
“Your hateful comments are hereby tl:dr and auto-report from now on”
Click. The sound of RD’s mind closing because you offer non-koolaid solutions to life.
How are your meds, BTW?
Re: Re: Thanks for defending the artist for a change
No, Techdirt loves “artists” who tweak the noses of the major companies. Mike never talks about an artist when they are working inside the system, only when they go out (which is why there is little coverage of Trent Reznor these days… he’s a system guy again).
Re: Re: Re: Thanks for defending the artist for a change
No, Techdirt loves “artists” who tweak the noses of the major companies. Mike never talks about an artist when they are working inside the system, only when they go out
Bullshit.
http://www.techdirt.com/articles/20091115/1833556944.shtml
http://www.techdirt.com/articles/20100201/0223487985.shtml
http://www.techdirt.com/blog/casestudies/articles/20111227/03144517198/cee-lo-green-making-millions-even-if-his-albums-dont-sell.shtml
It’s got nothing to do with tweaking major companies. I want those companies to stop fucking up their own business opportunities and help people make more money.
http://www.techdirt.com/articles/20070201/004218/why-i-hope-riaa-succeeds.shtml
Oh, the truth. It burns.
Re: Thanks for defending the artist for a change
The motto of boB:
Go Big or go home.
Re: Re: Thanks for defending the artist for a change
Thanks….. I’m rushing to the trademark office right now to register that one.
Re: Re: Re: Thanks for defending the artist for a change
Desert too hot for you, Bob?
Re: Thanks for defending the artist for a change
Oh bob. You are so silly. Why do you hate artists and other creators?
Re: Thanks for defending the artist for a change
I don’t know Zachary well enough at all to know if he espouses this, but that is a thing I will readily say, because it is going to happen whether they accept it or not. The only reasonable thing to do about it is chill out.
6/10. you got me to reply.
Re: Thanks for defending the artist for a change
Alright, let’s just demolish your usually less than supported by the facts nonsense, shall we?
“(1) screwing over the artist is impossible to stop whether it’s done by piracy or accounting so why bother trying to stop it;”
Not once has that been stated on this site. What has been stated is that piracy will occur, no matter what. Dealing with it then means beating it, not through ridiculous and broad laws, but by offering something better. Basically, make your product (whatever it is) better than the free version. However, if you don’t feel like putting out something better and do want to go the legislative route, do so but do so in an intelligent manner and with actual facts and evidence to support you.
“(2) creators should just chill out whenever anyone wants to make a copy of their work without paying them;”
This has never been stated on this site. What has been said is that sometimes overreacting in certain manners does more harm than good. And, in point of fact, more and more creators every day are supporting some of those methods used to share their works. Not necessarily saying, “Hey, copy my stuff.” But making use of technological innovations that allow them to do things, which sometimes also allow others to copy their works.
“(3) suing anyone is wrong, wrong and wrong again;”
Not even remotely close to accurate. What has been said is suing for stupid reasons is wrong. Apple suing others for making their tablets rectangular is stupid. Suing others for creating something you hold a patent to, but don’t actually make is stupid. (Patent trolls.)
“(4) trying to stop this will break the distribution mechanism whether it be the Internet or the publishing network”
No, again, you are wrong. There is nothing wrong with trying to stop piracy, as long as it’s done in an intelligent and reasonable manner. Overly broad laws ala SOPA are bad and have the capacity to be abused (and will be abused, the DMCA which was asked for and supported by idiots like you is now being routinely abused, and they are now crying that the thing they asked for isn’t enough and requires work).
“Alas, my guess is that you’re only doing this because of the old enemy-of-my-enemy-is-my-friend rule. The publishers are annoying to Big Search and therefore they must be bad. Anything that hurts an enemy of Big Search, Big Hardware or Big Piracy.”
Jesus christ, bob. Do you stop and listen to yourself? The world is not at the center of some Google orchestrated conspiracy. Just say the goddamn word. GOOGLE! GOOGLE! GOOGLE! Stop saying “Big Search”. You’re new name is “Big Idiot”. Because that’s what you are acting like every time you pull Big Search out of nowhere, especially when you do so in articles that have nothing to do with Google.
Re: Re: Thanks for defending the artist for a change
Sorry dude. When I read your answers, I can boil them down to: No one has ever used the word six around here. Ever. Six is not remotely accurate. We always use “half-dozen.”
And so now that you play the old generic game of saying that you’re okay with fighting piracy, why don’t you give me a concrete example of what’s okay. Is it okay to sue Kim Dotcom-like “innovators”? Is it okay to sue that punk down the street who has three terabytes of content that he’s never bought? Or should the punk actually be put in jail?
Re: Re: Re: Thanks for defending the artist for a change
The Kim Dotcom-case has nothing to do with moral of suing, but everything to do with juresdictions and procedure. Of course he is fair game for a lawsuit if evidence of wrongdoing is available, the “due process” – not an abomination called “fair process” – is followed and the juresdiction is acceptably clear…
The punk down the street with three terabyte of copied copyrighted material is most likely protected by the scale clause unless he can be proven to sell it. It was done to prevent the 1000’s of cases against private citizens and the horrible precedence of no defence of the pirate and therefore a completely retarded battle from the prosecuter to claim more and more absurd precedence of how to presume a pirate to have worked. At year 2000 it was assumed that if you ever had access to any way of replicating media, like on a library with a cd-burner, you would end up using it 8 hours a day to make illegal copies. At the same time you would be assumed to share it through pvp at obscene amounts. Was that the good times?
Where I live, fines can be turned into sentences and though fines and damages are different things it can be used to gauge proportionality. A single copyrighted song was worth at least 30 days in prison if you used the highest exchange rate in 2000. Given the linearity of exchange from fine to prison, posessing 100 illegally downloaded songs would be at least 7? years in prison, which is up there with murder 1… Talk about disproportionality…
With the DMCA and EU equivalent, we saw a turn towards reason and no prosecution of single persons, but instead the men behind the illegal networks. Hit the thief, not the fencer…
Re: Re: Re: Thanks for defending the artist for a change
You do realise we don’t have the prison space to jail pirates right?
And we don’t give examples because there aare no known good ways of doing it.
Hell everything solution that’s been thought up by the content industry could be listed in an article titled: “top ten solutions that are worse than the problem they intend to solve” and the solutions to piracy would fill all the slots.
Re: Re: Re: Thanks for defending the artist for a change
“Sorry dude. When I read your answers, I can boil them down to: No one has ever used the word six around here. Ever. Six is not remotely accurate. We always use “half-dozen.””
So what you’re saying is my correcting you and pointing out how wrong you are you refuse to acknowledge, that correct?
Because no one here has ever said anything even remotely resembling what you accused them of saying. Just because you’re too whatever and interpret things differently doesn’t change what was said.
“And so now that you play the old generic game of saying that you’re okay with fighting piracy, why don’t you give me a concrete example of what’s okay. Is it okay to sue Kim Dotcom-like “innovators”? Is it okay to sue that punk down the street who has three terabytes of content that he’s never bought? Or should the punk actually be put in jail?”
bob, I told you one example up above. Others have given other examples. The best way to fight piracy, and I’m not going to give more examples after this one, is GIVE THE PEOPLE WHAT THEY WANT! Digital content, DRM-free, available in a plethora of formats, with no windowed releases, at reasonable prices (NOT FREE) in one centralized place (no signing up for 50 services). That’s it. That alone can combat piracy and do so effectively. Any other examples you want see me previous comment, stop with the stupidity that doesn’t work to solve the problem.
It’s not okay to sue Kim Dotcom-like innovators. People are innovating. You may not like what they’re innovating or you may even feel threatened by it, but if they’re doing nothing illegal (and thus far the case against Kim Dotcom is going horribly and failing in every single way) then you can’t sue them just because.
It is okay to sue that “punk” down the street who has three terabytes of content. Assuming of course you can prove all that content was illegally downloaded and have proof and evidence to convict him or win said suit in a court of law. But try and sue for reasonable amounts. Not for what an item cost if purchased legally, but going for the full $150,000 isn’t going to endear you to anyone or make you many friends. If they can’t make that much in several years of work, there’s no point in going for the full “win”.
And no, the “punk” shouldn’t go to jail. Unless said person is committing COMMERCIAL copyright infringement. But even then, I say no. We barely have any space in the U.S. prison system as it is. You want to fill it even more? With people who downloaded a movie or a song? Your priorities are out of whack.
Re: Thanks for defending the artist for a change
Paying attention: you’ve been doing it wrong.
Re: Thanks for defending the artist for a change
“It’s nice to see some sympathy for law suits to enforce copyright and the fact that artists don’t need to take it when either Big Search or Big Publishing is pushing them around. “
This case has nothing to do with copyright. It is a contract dispute regarding how the publisher is calculating it’s payments to it’s authors.
Re: Re: Thanks for defending the artist for a change
Yes it does. The only reason the contract exists at all is because of the copyright. One half of the contract is formed by the writer handing over a license to reproduce the work. The other half is formed when the publisher pays the writer a consideration, in this case cash.
If we use your definition, lots of piracy isn’t a copyright issue at all, it’s merely a violation of a shrinkwrap license dispute.
Re: Re: Re: Thanks for defending the artist for a change
Jesus Christ Bob, you’ve been coming here for seven fucking years. Have you learned nothing at all?
Re: Re: Re:2 Thanks for defending the artist for a change
There are two options:
1) He is, but is taking in VERY slow strides
or (where my money is)
2) Not a damn thing.
Re: Re: Re:3 Thanks for defending the artist for a change
3) bob is a troll and knows he’s spouting bullshit
Re: Re: Re:4 Thanks for defending the artist for a change
4) Bob is a shill and is paid to spout bullshit.
Re: Re: Re: Thanks for defending the artist for a change
“Content was involved. Masnick is supporting artists. Therefore, he must be supporting copyright. Thank you for supporting me for a change, but I still think Techdirt is a haven for assholes.”
There, that’s bob’s thought processes in a nutshell. He can’t be weaned off the idea that authors’ issues are always copyright issues.
Hell, you could even have a case where an author was sexually harassed by her publisher, sued them and won, and if Techdirt reported that, bob would pop by and say, “That’s right; thanks for supporting artists. The success of this case wouldn’t have happened if copyright didn’t exist; if copyright didn’t exist that woman would have been raped for sure. If you’re against sexual harassment, you’re for supporting greater copyright enforcement.”
Yeah, my brain hurts after typing that. It takes some special kind of scum to be bob. Or maybe an amoeba. Anything that’s single-celled and doesn’t have the capacity for a brain.
Re: Thanks for defending the artist for a change
Pretty much every assumption and belief you held about techdirt(and evertything else) was wrong anyway.
So no doubt you’d be surprised if you actually read about what Mike believes
Re: Re: Thanks for defending the artist for a change
Or ZK for that matter
Sweden or Switzerland?
Re: Re:
Oops. My mistake. Thanks.
Re: Re: Re:
Happens all the time. Just remember: In Sweden we make furniture and movies with naked women and in Switzerland they make clocks and cheese.
Should make it easier to seperate us 😉
Re: Re: Re: Re:
Read it as cocks and cheese but I realized that didn’t make sense.
Re: Re: Re:2 Re:
Don’t believe that Switzerland is known for their roosters but I might be wrong o:-)
Fabio needs Hair Mousse
Harlequin pays a FORTUNE to keep Fabio in Hair Mousse and ripped shorts. Of course they’re not making a profit!
Put a short, fat, older guy like me on the book covers and your overhead costs will evaporate….of course so will your sales!
how many reports of this type of rip off have there been in the last couple of years? and politicians still keep believing what all the so-called entertainment industries say about losing money hand over fist to ‘piracy’ and how stronger laws are required to prevent it happening. why are these people always believed, yet ordinary citizens that are totally pissed off at being screwed are always accused of lying, cheating and thieving? shame those in power done have the guts to look in the proper directions, and make the correct decisions!
I’m bob! I don’t have any idea what I’m saying! I don’t know how to read! I just spew before I see! Everything’s gotta be Big! Big, Big, Big! Down is up! The sky is green! Day is night! Physical is digital! I’m a complete moron! Don’t pay any attention to a thing I say! Why I’m not in an insane asylum is anyone’s guess! I’m blinded by greed and money, and I’m terrified of change! And I… just… CAN’T… EVER… admit… to being… WRONG!!! WAAAAAAAAAHHHHHHHH!!!!!!! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! Big! It’s gotta be Big, Big, Big! And I’m Big Idiot! And Big Shill! And Big Troll! WAAAHAHAAAHAHAAAHAAAAA!!!!
Re: Re:
Hi bob, I’m bob. It’s nice to meet you.
Have you met bob by any chance?
Re: Re: Re:
What About Bob?
Re: Re: Re: Re:
Never heard of him.
Re: Re: Re:2 Re:
Desert too hot for you Bob?
No, you got it all wrong, he spells his name backwards. I’m the real bob!
Book publishing math
Sign a contract with a book publisher: get $.32 on an $8 sale.
Self publish on Amazon/iTunes, etc: get $.70 on a $1 sale, probably selling more copies as well.
You know what. Schumer is right: publishers are doomed.