Are publishers under-reporting ebook sales to authors?

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It's been an interesting couple of days in the publishing world. It seems like some publishers may be under-reporting ebook sales to their authors, in some cases reporting as little as 10% of the actual sales in royalty statements.

Needless to say, this has a lot of writers confused and concerned.

Yesterday, Mike Stackpole talked about this issue. Today, David Farland wrote about it in his "Daily Kick" emails to writers, and Kris Rusch blogged about it on her Business Rusch blog. All three confirmed the problem. What seems to be happening is writers who have indie and corporate published books are comparing the results of the two for the first six months of 2010 right now. And finding that corporate books whose Amazon ranking was higher than their indie books are reportedly selling 30 copies to the 300 copies the indie book sold.

The better rank (which should mean more sales, not less) is getting 10% as many sales.

Kris Rusch went into a lot of detail about what she thinks is going on: basically, bad accounting practices designed to sort of tide the companies over while they get their act together. The problem is, that's still money (potentially, a lot of money) not being paid out to writers.

This is a dangerous road for publishers to start down. Remember when everyone was appalled that Borders had stopped paying some of the publishers supplying the company with books? When you stop paying the people who provide what you sell, you're a heartbeat away from going out of business. It seems like right now, some publishers are doing something similar to their writers. It's a precarious place to be.

As David Farland said, "In such a world, authors really may have no choice but to walk away from the New York model."