Publishers are currently making record profits on the rise of e-books, and authors and readers are the ones paying the price. In fact, many authors—and the guild that’s supposed to fight for them—are actively defending these publishing houses that are doing well while causing harm.
News Corp, which owns HarperCollins, released their quarterly earnings report yesterday. The portion dealing with book publishing demonstrates just how profitable e-books have become for major publishers, and that despite the spin from pundits, e-books are still very much on the rise. The full earnings report can be found here. It includes this gem:
E-book revenues improved by 35% versus the prior year and represented 22% of consumer revenues, up from 17% in the prior year. Segment EBITDA increased $55 million, or 39%, from the prior year, benefiting from the higher contribution to profits from e-books and ongoing operational efficiencies coupled with higher revenues, partially offset by dual rent and other facility costs.
It’s interesting to note that HarperCollins has not added this press release to the Media Room on their site. And they are unlikely to tout these results. Of course, it could have something to do with publishing speed and not anything due to embarrassment, but this is the same HarperCollins that leaked the higher margin on ebooks compared to hardbacks, and the smaller cut authors earn at the same time. An agent comments in the prior link that publishers lied for years about whether e-books were more profitable. It’s hard for parent corporations to brag to investors without the dupes overhearing (ask Hachette).
The dupes in this case are the readers who defend the colluders who illegally raised prices on them. The dupes are the authors defending their publishers while they get shafted on pay and their dear readers get gouged. The dupes are the Authors Guild, which continues to fight for publishers so they can charge higher prices on ebooks and pay dismal royalties, because the guild is run by authors who get such high advances that these royalties aren’t a concern, and high e-book prices protect the print oligopoly that they dominate.
The greatest competitive force working in the favor of authors today is the ability to self-publish. Authors can make 70% of the rapidly growing e-book market instead of a paltry 15%. They can also make four times what they earn on paperbacks by going with a print-on-demand solution, and fully half of the print market has moved online. This is leverage authors have never had. It will result in more diversity in what is published, a greater selection for readers (at a better price), and publishers are going to be forced to compete by paying authors more and charging readers less. They are also going to have to publish more of the types of books that readers want, and fewer of the books that editors wished readers wanted.
These will all be positive changes. They are already happening. Unfortunately, we are now in a phase where enough people are having bags pulled over their heads that publishers are able to profit from the high prices and low pay. But I think word is getting out. And these corporations won’t be able to prey on us much longer.
An upcoming blog post will look at the number of authors moving from one publishing type to the other, and what we are seeing is a drain from traditional publishing to self-publishing. This will bring prices down for readers and earnings up for writers, and that should be celebrated. My hope is that it will also force publishers to work on behalf of the artists and consumers who drive this industry, instead of taking advantage of us.