March 7, 2018
In the UK, corporate publishing profits swell, as authors’ share dwindles, according to the Society of Authors
by Simon Reichley
Authors have been footing the bill for growing profit margins at Big Five publishers like Penguin Random House and Simon & Schuster, according to analysis presented by Nicola Solomon, chief executive of the UK-based Society of Authors. Writing in The Bookseller, Solomon claims that, while profit margins at the large corporate houses have increased by almost a third in the last decade, authors’ share of those profits has shrunk drastically.
Solomon writes that information published in 2013 by the Authors’ Licensing & Collecting Society (ALCS), showed that authors’ publishing related income had dropped by twenty-nine percent. And, according to a study performed for the Publishers Association, of the £5.1 billion in revenue the UK publishing industry took in in 2016, authors received only £161 million in advances, royalties, and subsidiary income — just a shade over three percent. Some further crunching of the numbers shows that authors took home twenty-nine percent of profit. To put a finer point on it, shareholders of large corporate publishers took home more than three times as much as authors.
Solomon goes on to point out that things don’t need to be this way, using as an example Andrew Franklin’s surprisingly transparent and detailed accounting of the business model at Profile Books. According to Franklin, Profile paid out twenty-two percent of revenue to its authors, almost eight times the average rate in the ALCS data. At he same time, the house has posted a profit every year since 1997, and for the last three years has made “an average pre- tax profit of 12% of sales.”
In light of all this, Solomon and the Society of Authors have put forth a four-point F.A.I.R challenge to corporate publishers in the UK:
1. Fair terms. Ahead of EU legislation, all publishers should sign up to our CREATOR principles
2. Accounting. Transparent and clear accounting to show exactly how much publishers pay authors, illustrators and translators.
3. Increased shares. Publishers should commit to paying authors a higher proportion of turnover, and increase advances and escalators
4. Redistribution to a wider pool, not just celebrities, but writers from across society. And publish how author share is distributed in accounts.
Franklin quotes Sir Stanley Unwin, founder of Allen & Unwin, who often remarked, “The first duty of any publisher to their authors is to remain solvent.” After elaborating in great depth exactly how Profile manages the trick, he puts his own twist Unwin’s thesis: “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 mustn’t lose sight of our duty to remain solvent.”
What Franklin realizes, and what Solomon demands, is that—shareholders’ claims to the contrary—this solvency need not come at the expense of the author.
Simon Reichley is the rights and operations manager at Melville House.