The Society of Authors has warned that authors may be losing out twice over on e-book loans, with president-elect Philip Pullman calling for authors to "be paid fairly" for the digital loans.
In its report and briefing paper, the Society of Authors commented that authors may be losing up to two thirds of the income they would have received on the sale and loan of a physical book, since publishers may be underpaying authors on e-book library loans, and the government is not paying authors Public Lending Right on e-book loans.
The SoA stated that publishers may be mistakenly underpaying authors on library loans of e-books by treating receipts as sales rather than licences.
Although all e-book sales are technically licenses, since in order for an e-book to be lent the publisher must grant a subsidiary licence to the aggregator, the author is therefore entitled to receive a different loyalty because a subsidiary right has been exercised. This figure is typically 50% of net receipts, according to the SoA.
In its full findings, the SoA said it was "increasingly concerned that the rhetoric of publishers (and sometimes government) about renumeration for authors from elending is not matched by practice. In particular the Society is concerned that current and proposed models may leave authors with a far smaller share of renumeration from the loan of an e-book than they currently obtain from the loan of a physical book".
The Society pointed to publishers that use aggregators such as Overdrive in dealing with digital loans as being particularly likely to treat all receipts as sales when accounting to authors. SoA president Nicola Solomon said that she has written to two trade publishers today--Bloomsbury and Random House--taking issue with how these publishers characterise their sales to libraries via Overdrive. In the letters, Solomon called for future publishing contracts to state clearly what rights were being granted and what rate was to be applied to licences for e-book lending, and that any models for e-lending should renumerate authors per loan as well as for the initial licensing of the e-book. Solomon said the SoA had reviewed the two publishers' standard author contracts, and wrote that it was "incorrect to categorise as sales" the arrangements with Overdrive and other aggregators for library lending. Bloomsbury executive director Richard Charkin declined to comment when asked about the letter; Random House UK did not comment.
Solomon also called for an author's receipts from e-book lending to equate to the total earnings the author would have received on a physical copy over its lifetime through both royalties and PLR on every loan.
Chair of the Society's management committee Anne Sebba said: "Authors are keen to embrace the opportunities offered by digital publishing and want to support libraries by offering their e-books for lending. However, we need to ensure that authors are paid sufficient money from digital to enable them to keep writing. The Society of Authors advises authors to continue to press for a fair share of e-book royalties and to check their royalty statements to make sure that publishing contracts are being interpreted correctly that they aer paid all amounts due."
In a statement issued today, Pullman said: "New media and new forms of buying and lending are all very interesting, for all kinds of reasons, but one principle remains unchanged: authors must be paid fairly for their work. Any arrangement that doesn't acknowledge that principle is a bad one, and needs to be changed. That is our whole argument."
The SoA's statement and letters follows the publication of the Sieghart Review, the government-commissioned report into library e-lending, published at the end of March.