Fifty Percent, Four Percent, What’s the Difference?

Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.

In March 2011 we blogged about a significant legal ruling supporting a claim brought by the producers of rapper recording artist Eminem. The claim was that what Eminem’s record company called “sales” – which paid a low royalty – should actually have been calculated as license revenues, a far higher number. We predicted that the court’s interpretation would one day be applied to book contracts. That day has come in the form of a class action lawsuit against Harlequin on the very same grounds.

To understand the distinction, which in Harlequin’s case is the difference between 3-4% to authors vs. 50%, read our original posting, When is E-Royalty Not a Royalty? When 9th Circuit Court Says It Isn’t.

On October 23rd Publishers Weekly reported that Harlequin’s attorneys filed a motion to dismiss the lawsuit. The Eminem case may have a definite bearing on this one, so romance writers would be wise to keep an eye on this unfolding courtroom drama.

For a cogent analysis of the case and its implications for the book industry, read Copyright Alert: 9th Circuit Holds Digital Downloads are Licenses Not Sales by copyright authority Lloyd J. Jassin, to whom we’re indebted for bringing the case to our attention.

Richard Curtis

One thought on “Fifty Percent, Four Percent, What’s the Difference?

  1. Greg

    So many unexpected results can come from a “little” extension, such as going from physical to digital. This other interpretation similarly effects both book and music sales, royalties, and licenses.

    My interpretation says that one can re-sell the digital copy that one purchases. I don’t think Amazon Kindle allows for this yet, although Amazon music and iTunes allows for it now that they provide MP3s. So it looks like Amazon Kindle and others that use DRM may be forced to allow transfers in the future.



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