The chief executive of the Society of Authors has challenged publishers to reveal how much they pay writers in their annual financial accounts.
Publishers' profits have grown while authors' pay has shrunk in recent years, Nicola Solomon has argued in an article for The Bookseller. As a result, the chief of the trade body is calling on publishers to state in their financial accounts how much they pay authors, illustrators and translators in advances, royalties and secondary income.
Solomon suggested publishers were reaping larger annual profits at the expense of "suffering" authors. The latest author pay study of the Authors’ Licensing & Collecting Society (currently in the process of being updated) showed that the average annual income for an author in 2013 had dropped 29% since 2010 to £11,000.
Meanwhile, two of the biggest English language trade publishers have seen large increases in their profit margins, she said. Simon & Schuster Inc's profit margin surged from of 9% in 2008 to 16% in 2016, Solomon argued, and Penguin and Random House have almost doubled their profit margin to 16% since merging, she noted according to their own figures.
Authors received around 3% of publisher turnover in 2016, (5% taking our journal revenue),Solomon deduced, when taking into account that in 2016 £161m was paid to authors in advances, royalties and secondary rights revenue, while the UK publishing industry’s turnover was £5.1bn, of which book sales contributed £3.5bn (69%) and sales of academic journals £1.2bn (24%), according to the Publishers Association's recent study The Contribution of the Publishing Industry to the UK Economy.
The remuneration authors currently receive is a far cry from Allen Lane's "more equitable" approach to paying authors in 1935, when the press endeavoured to split profits equally between author and publisher after all expenses were paid, the SoA chief said.
"What’s clear is that instead of the 50/50 after costs that Allen Lane tried to achieve, authors’ share was around 26% of the total," she wrote. "Or to put it another way, once everyone in the publishing house was paid, publishers’ shareholders received up to three times the amount paid to authors. And authors still had to pay their own expenses and agents," said Solomon.
"Publishers may contest these numbers, but we cannot break down these figures between publishers because they do not publish author share. It is easy to ascertain that public libraries spend around 5% of their budgets on book stock but impossible to find equivalent figures for publishers.
"We challenge publishers to state in their accounts how much they pay to authors, illustrators and translators in advances, royalties and secondary income. It can be done."
She went on to emphasise that long-term damage could be inflicted unless authors receive "proper returns". The result in the absence of fair pay is that "the supply of quality work will inevitably diminish", she said, arguing it would also be to the detriment of diversity within the industry if working-class writers cannot afford to be authors.
Society of Authors' president Philip Pullman also weighed in to support Solomon's argument, saying: "To allow corporate profits to be so high at a time authors' earnings are markedly falling is, apart from anything else, shockingly bad husbandry. It's perfectly possible to make a good profit and pay a fair return to all of those on whose work, afterall, everything else depends. But that's not happening at the moment."
In response to the criticisms, Profile Books' chief Andrew Franklin has argued that publishers' first duty to authors is to remain solvent.
Although Profile paid a generous 22% of its revenue to authors in 2016 and 2017 (in contrast to the average of under 5%), he laid out the unpredictable nature of the publishing business, calling it an "art not a science". He explained that costs of overheads were "hard to control", in addition to all the costs of producing a book (the printing and binding, warehousing and distribution, sales and marketing, editorial and design) at the end of all which publishers must still make a profit.
"If you aren’t making a profit or breaking even, you are making a loss," said Franklin, warning: "That is unsustainable."
He added: "The big publishers aim to make a profit of 10% on sales; most only manage it in good years. Most independent dip into a loss from time to time. At Profile - unusually for independents - we have been profitable in every year since 1997, and, for the last three years, have made an annual pre-tax profit of 12% of sales. This is rather more than most publishers, but we do not forget that, like all businesses in a capitalist world, we must make a profit. And we will never forget that if we do not, after a few years we will go under. We musn't lose sight of our duty to remain solvent."