The Publishers Association (PA) has admitted a key figure it released on author pay was wrong; in fact authors received more money from publishers in 2016 than previously thought, with the figure first cited close to £190m out.
Writing in The Bookseller this week Stephen Lotinga, c.e.o. of the PA, said that a report released by the trade body in March, conducted by Frontier Economics, incorrectly calculated that the total payments consumer authors received in 2016 were £161m, based on advances, royalties, secondary licensing and rights.
However, Lotinga said the correct figure with the inclusion of advances stood at around £350m - a leap of £189m.
The report caused a furore when it was originally released earlier this year, with the Society of Authors (SoA) calculating that writers received around 3% of publishers' turnover in 2016 when taking into account the £161m figure, while publishers' profit margins were much higher.
At the time, the SoA's then president Philip Pullman warned that "to allow corporate profits to be so high at a time when author earnings are markedly falling is, apart from anything else, shockingly bad husbandry." The SoA's chief executive Nicola Solomon also cautioned that the quality, supply and diversity of books would be threatened in the future if author pay continued to dwindle and challenged publishers to reveal how much they pay writers in their annual financial accounts.
In the latest twist in the debate between publishers and writers on author pay, Lotinga admitted that "this figure, which we already thought was conservative, was actually way off the mark".
"Getting to the bottom of this has taken longer than it should have done, but the researchers have gone back over their calculations and the original research it was based on," he said. "We are publishing a formal correction today in the form of an addendum to the original research. In summary, Frontier Economics incorrectly stated that the total payment authors received in 2016 was £161m. However, this figure did not in fact include the advances publishers pay to authors and as such a more accurate figure is around £350m.
"...All of this means that out of the roughly £1.8bn consumer publishers received in revenues in 2016, 19% was paid to authors, significantly above the profit margins of almost every publisher."
Lotinga said the question of whether authors were fairly paid was "as old as the book itself" but conceded that this "does not make it any less important".
In order to shine more "light" onto the debate, the PA and its members plan to work with the Office for National Statistics to better inform the debate in the future, Lotinga said.
But he also warned of the dangers of disrupting a successful business model for publishing, especially at a delicate time when dominant retailers like Amazon could "effectively dictate terms".
"It is true to say that the most successful books effectively pay for the rest, and that the majority of the 180,000 books published in the UK each year don’t make significant amounts of money for author or publisher," Lotinga said. "Publishers go to great lengths to ensure their authors are appropriately rewarded for their work and continually invest in new talent. We should be careful about calls to move away from this model towards – as some appear to be suggesting – one that rewards regardless of commercial success. This could totally undermine the delicate balance of the book ecosystem that exists today."
He added: "The UK continues to be one of the best places in the world to write a book. We have a superb industry of authors, agents, publishers and booksellers. Our books are in great demand domestically and around the world. This is despite the fact that we have experienced nothing short of a revolution over the last few decades, coming to terms with the reality of enormous retailers who can effectively dictate terms."
The revised figures follow a public spat between the PA and the SoA and Authors Licensing & Collecting Society (ALCS) after the latter revealed a report suggesting writers' average earnings had dropped to under £10,500 a year, down 13% in real terms since the last review in 2013. At the time, Lotinga said the figures were "unrecognisable" to publishers and a "much sounder evidence base" was needed. The SoA and ALCS responded by writing an open letter to Lotinga questioning the gounds upon which he was taking issue with the figures.
Writing today, Lotinga said the industry was not served well by descending into "factions and blaming one another".
"It is right that there is a frank discussion about what is appropriate for different parts of the industry to receive from its success, but we do not serve our industry well if we descend into factions and blame one another," he said. "We also don’t serve our industry well if we lack confidence in the evidence we’re using as the basis for assertions made. I will continue to push for the best possible evidence – including when it involves holding my own hand up to correct a mistake we have made."
In response to Lotinga’s comment, Solomon said the SoA welcomed more transparency from publishers and a “frank dialogue about author incomes”.
“We have been calling for greater transparency from publishers, particularly around finances, for many years and we are delighted, finally, to have some response to our call for a fair deal,” she said. “Stephen makes an crucial point about the importance of having confidence in the data that we’re working from. I couldn’t agree more.” She also welcomed working with the ONS, saying it could lead to more useful data.
“What we want is for professional authors to be able to make a fair living from writing without having to prop it up with income from other sources. Our experience, backed up with the evidence from the ALCS surveys is that the number who can afford to do that is declining. We also want a diverse industry that welcomes new writers and new readers and allows them to live and we are delighted if the PA will work with us on ways to attain that.”
However, the writers’ body said it was “confused” by the explanation of the incorrect figure in the Frontier report.
“(Lotinga) says that it did not include advances. However the PA Frontier report says specifically that ‘£161 million per year is paid to authors in advances, royalties and secondary rights revenue’. We need to see the calculations that led to the revised figure of £350 million before we can comment- and also to understand why Stephen attributes that entirely to consumer publishing.”
The PA has also published its response to the All Party Writers’ Group inquiry to author remuneration today, which can be viewed here.