Via Richard Curtis at e-reads, news of a 9th Circuit decision that could very well have a huge impact on ebook royalties. From the
Wall Street Journal:
[A] federal appeals court in San Francisco on Friday ruled that songs downloaded from Apple Inc.’s iTunes store are not actually purchased, but are rather “licensed” by the ostensible buyer.
The distinction is hardly academic. Under most recording contracts, artists are entitled to 50% of revenue from licensed uses of their music. That usually means soundtracks for movies, TV shows and ads. Sales, on the other hand generate royalties for the artist at a much lower rate—generally in the low teens, and rarely more than 20%.
If Amazon (and Apple) can remove books from devices with the excuse that they’re ‘only licenced, not bought’ then authors can demand more money from publishers. This could get interesting.
16 thoughts on “Big news for ebook royalties”
Yes, it could get interesting. Thank you for explaining why this matters.
Anon@9:46, I think this is just the beginning of implications regarding licence vs. sale of ebooks. Buckle up, it's gonna be a bumpy ride…
Wow, that's amazing but not surprising. My husband has always called eBooks and eTunes licenced rather than purchased. He's in the tech/software industry.
The power to revoke my license, thereby preventing me from accessing media which I rightfully paid to access–even if my money is refunded, is what prevents me from purchasing any media served on a platform which restricts my rights to such content. Kindle, iPhone App Store, and such are all plagued by this kill switch.
If you don't control your device and the content on it, you don't own it.
Rhettigan, yours is a perspective I'm familiar with but don't share. I love my Kindle. I also love the royalties ebooks are bringing me.
This makes all kinds of sense since technically, unless an author assigns copyright to a publisher (which only an idiot would do), an author is only licensing the right to sell his or her book in specific formats for a specific length of time in any publishing contract that he or she signs.
The problem is always with that little word, 'technically'. I'll be watching with interest.
Yes, we'll see if this ruling sticks. Very interesting.
I love my Kindle too, but the first time they take something I've bought personally off that device or my iPod will be a game changer for me.
Or you know, I'll just be lazy and blow it off until it happens more than once…
And of course they did say that it includes non-DRM tunes as well as DRM. I find that ridiculous.
The ruling doesn't surprise me at all. It's sort of like “Supreme Court Confirms Sky is Blue.” I personally wish the state of the industry – and of US copyright law – were different, but this ruling just supports license agreements and business models that have been in use for the past decade (maybe more).
jennifer d: The presence or absence of DRM doesn't change the legal status of the licensed content. You didn't agree to one set of license terms for your DRM'ed music and a different one for your non-DRM'ed music (assuming you bought them both from the iTunes Music Store).
Todd, nope, it's not surprising, but now it's Official. It makes a difference. It might just be enough, when combined with 2013, to tilt royalty structures in the author's favour.
Todd Bradley: The ruling is only about iTunes music, so yes that is what I was referring to. Although Apple uses one blanket license agreement, the “usage” rights are very different for DRM vs non-DRM music from iTunes.
Software in general (iTunes included) has a license agreement I agree to when I install it. That doesn't mean I'm renting it, only that I agree to certain terms. I bought it, I don't give it back unless I break the rules.
And as long as I use that music in the terms I agreed to, they have no right to take it back.
Digital media is dated by it's nature. I am sure that in my lifetime the current technology will become obsolete. Just as I once bought 8 track tape cartridges, music cassette tapes, and vinyl albums that I no longer have any use for, one day my music tracks and Kindle-formatted ebooks will no longer be usable. Unfortunate, but I accept that.
Physical books and film are much more durable than their digital counterparts, but that's the way of things.
I'm all for anything that gets higher royalties for authors and other artists.
Ultimately the consumer does have some voice in what happens with licensing. If we don't like it we don't have to buy it.
This may make a difference with backlist titles, but since the fundamental reason sellers want to call sales 'licenses' is that then they can contract around statutory defaults, publishers will simply rewrite contracts to make explicit and particular what had been ambiguous and categorized. I'm dubious this will change much about the relative bargaining power between authors and publishers. Or rather: since it *does* shift the balance between readers and publishers in favor of the latter, it may even hurt authors, since stronger publishers aren't necessarily in authors' interests.
X.Trapnel, I see your point but I'm not sure I agree. I imagine agents are burning up the wires right now trying to figure this out.
Yeah, everything is pure speculation beyond the immediate consequence (effectively abrogating the First Sale doctrine for software, music, & anything else digital). But I think the distributional consequences will vary a lot with each affected industry. In the short term I suspect they'll depend on the relative value of backlists, and collective bargaining agreements/agencies; in the medium term on the level of horizontal & vertical consolidation.
(I also think the death of First Sale is a Very Bad Thing for readers, period, but here I'm trying to only think about it as it affects the division of spoils.)
X.Trapnel, yes–but trade publishers are seriously crap at vertical integration. It's the new retail/distributor hybrids and community-based independent presses (and, very occasionally, entrepreneurial authors) that understand the vertical.
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