Achieving a balanced IP system to ensure content creators can keep creating in the digital age

By Gene Quinn
April 26, 2016

Mary Rasenberger

Mary Rasenberger

The Digital Age has brought about many changes and disrupted many businesses, opening up new opportunities for individuals and businesses alike, as well as creating entirely new industries. As with virtually ever cataclysmic shift, change has not always been smooth or easy. On the one hand the digital age has created vast new opportunities for content creators — both large and small — but the age of the Internet has presented real challenges for content creators as well.

Today, on World Intellectual Property Day 2016, we celebrate content creators. The theme announced by the World Intellectual Property Organization (WIPO) this year relates to the future of culture in the digital age. More specifically, how we create, how we access, how we finance content creation. This World Intellectual Property Day, WIPO turns its collective attention to a discussion about achieving a balanced and flexible intellectual property system that will ensure content creators and artists are properly paid for their work so they can keep creating, which benefits society at large.

The topic of incentivizing and properly protecting content creation is enormously important. The myth that creators will create whether they make money creating is just that — a myth. If you have to work long hours making money doing something else in order to pay your bills that means you create less, which you would think would be self evident to even the harshest critic. If we want more creation we need to make sure that the digital age does not leave the creators behind because, after all, they are the only ones in the equation you cannot do without.

With all this in mind, I decided to reach out to the Author’s Guild. I spoke with Mary Rasenberger, who is the Executive Director of the Author’s Guild, and she agreed to this interview that appears below, which took place on April 14, 2016.

Rasenberger is an attorney and copyright expert. She is also Chair of the American Bar Association’s Copyright Division of the Intellectual Property Section, a Trustee and Member of the Executive Committee of the Copyright Society of the USA, and an Adviser to the American Law Institute’s Restatement of Law, Copyright. We spoke on the record for approximately 40 minutes, discussing the current business realities for authors in the digital age, the challenges the face and what needs to happen moving forward.

Without further ado, here is my interview with Mary Rasenberger.

 

QUINN: Thanks, Mary, for taking the time to chat with me today. As I think you know, the topic this year for World IP Day relates to digital content creation and how we can protect content creators in the digital age with an eye towards allowing them to be able to monetize their creations so they can create more. So I figure, who better to talk to about this issue than somebody like yourself who works with authors, who in the digital age facing all kinds of challenges. I really appreciate you taking the time today. Maybe we can just jump right in. In your day-to-day working on behalf of authors, what are the challenges that you see being presented by the digital generation, and what are the benefits? And maybe we can then get into a conversation about how that has changed the business model.

RASENBERGER: Well, first, thanks for taking the time to talk to me today. I’m happy to talk to IPWatchdog. Your question is a good one. As you know, our mission—very broadly speaking—is to support authors and help protect their rights, including copyright and free speech, and ensure that writers can earn a livelihood. To take a step back, the publishing industry right now is in the middle of huge transformation. We’re at a place now where there’s as big a change or potential for change as when the printing press first came on the scene. And back then it took a good hundred years for publishing to develop into something we might recognize today. I think the changes we will eventually see in publishing due to the digital revolution will prove to be just as big in terms of changing the industry itself—and also the writing life and what that looks like. We are only at the beginning of those changes now and really don’t know what the industry will look like in twenty, even ten years.

So, okay, let’s talk about the benefits and challenges. I think the long-term benefits to authors are greater than the downsides or the risks. But, like any time there’s a shakeup of an industry, there are short-term and long-term winners and losers. I’ll even use the term “digital disruption,” although it is way overused these days (and too often used as a poor excuse for infringing copyright). Digital technology is disrupting the industry as a whole. We had the same business models for the better part of at least a century, and while things are starting to change, we’re still largely operating as we did in the past, based on old business models with just a few tweaks. We haven’t fully evolved yet, and as a result we’re mostly seeing a little bit of the downside. Whenever there’s a disruption in business models, someone is negatively affected. Unfortunately, here it is the authors, and creators generally. And that’s because creators in these industries tend to have the least bargaining power and they tend to be a line item in a budget where there is some discretion. So looking specifically at the publishing industry, if you’re a publisher, there’s not much you can do about your bottom line costs, like printing and marketing costs and overhead. So when it comes to negotiating for a new book, one thing that’s always negotiable is the author’s advance. So advances have gone down for most authors. As recently as the last six years we’ve seen e-books go from barely viable to a huge part of the business. Unfortunately for authors, publishers ended up settling the e-book royalty at 25%, which we at the Authors Guild do not think is fair. Because what we’re getting is 25% of profit. There’s no reason publishers should be entitled to 75% of profit. The publishing business was built on the notion that it was a partnership between authors and publishers. Publishers should be sharing their profits equally with authors.

QUINN: It was also built on the belief that it was the channels of distribution that the authors needed access to, right?

RASENBERGER: Right.

QUINN: And that’s not quite the same as it was now that you have the digital economy.

RASENBERGER: That’s right. The potential upside for authors is great. With the digital age there’s the potential for disintermediation. There’s the potential for authors to connect directly to their readers, which means they should be, in fact, doing better. I am very optimistic about the future because I think we will get there. We’re just not there yet. While there are some authors who are self-publishing now and doing it very successfully, there are not a lot of them, and they tend to be in genre fiction like romance and mystery. And the reason for that is that it’s very hard as an independent author to build your audience. You can use social media and existing fan e-mail lists, and word of mouth. And self-publishing is mainly an e-book business still. It is very hard to get into the traditional distribution chains. For instance, it’s hard to get into bookstores, even your local bookstore, as an independent author. The means that are available now to independent authors are self-publishing e-book platforms like Amazon’s Kindle Direct Publishing, or KDP. Many independent authors rely exclusively on KDP or get the majority of their sales through it. While I believe that competitors to KDP have great potential for growth, it’s still a very nascent business. The self-publishing market really doesn’t work for serious literary writers and nonfiction writers yet. But that doesn’t mean that will always be the case.

And this takes me back to the fact that most authors having a hard time now. We did a survey of our members about a year ago.

We kept hearing from our members and others, just anecdotally, that they’re doing worse, they’re having a harder time making a living now than they used to. So about a year ago, right after I came to the Guild, we thought, well, let’s try to put some numbers on this and see if there is any truth to this being a general trend. We found from our survey that in general authors are in fact doing much worse. The mean income for full-time authors is down 30% from 2009 when we last did a survey—that’s a huge drop.   And it’s even more shocking when you look at the actual dollars. The mean income went from $25,000 in 2009 to $17,500 in 2015. That’s getting very close to the poverty line. It was always known that you don’t go into writing to get rich. Sure, some authors do very well, but they are the very, very few and far between. Most professional authors earn at best a middle class living. So the problem with the decrease in income to authors in the last six years is that writing as a profession becomes unsustainable. If you can’t keep writing for a living, you’ve got to do something else, and many authors are starting to. People who’ve written books their entire careers, who have written a dozen or so books, they’re having to find other types of work. Our culture suffers as a result because we don’t have professionals writing the types of books that will further our literary culture, further our knowledge, our sense of our place on the world—the kinds of books that have a good chance of standing the test of time.

QUINN: Why is that? Why is it that all of a sudden authors are by and large starting to do so much worse?

RASENBERGER: There are a number of different factors, although they all, broadly speaking, can be attributed to this digital disruption. First, a big part of it is this new culture we have that says “information wants to be free”—a phrase people use to mean that they want content to be free. It’s a nice idea, but someone has to pay people to create that content, or they don’t produce as much or as well. The “information wants to be free” culture has devalued writing. We see the major Internet-only “news” providers like Huffington Post, and they don’t pay writers. Writers are supposed to write to get PR, but if you’re writing for a living and suddenly everything is presented to you as a marketing opportunity, you stop making money. So, one aspect of it is that in journalism the rates have just plummeted, absolutely plummeted, in some cases to zero. The extra income that book authors used to make from writing for magazines and newspapers has pretty much fallen off the cliff because the public has gotten used to everything for free on the Internet, and so many entities providing content on the Internet have gone to a write-for-free model, or else they pay a fraction of what they used to. It’s particularly sad since many of those business, like Huffington Post, are doing extremely well.

New services like Google Books that are built on using content for free are another cause of authors’ falling incomes. We were in litigation with Google—until last week. Last Monday the Supreme Court declined to review this case, which is disappointing on so many levels. I can’t go into them all now or we’d be here all day. We had a lot of people asking us why we were continuing to press the suit.   They argued that Google Books is a good thing, it’s providing more access to these books, we can find out about them and then we can buy them. Well, we’re not saying Google Books isn’t a very useful took because it is, but if every new technology that comes along can just say—we’re just going to copy your books and we’re going to use them for their expressive content, but since we’re providing this great service, it’s fair use, and we don’t have to pay you—then we’re sucking the potential income to authors out of that market. The long- term implications are huge. We agree Google Books is pretty cool, we’ve got to start thinking outside the box of traditional publishing where you can make money just from selling a physical book or an e-book. We should not be giving away entire new markets. Books are going to start being “used” very differently in the future; and I use the word “used” instead of “read” purposely. Already, many books are not read from beginning to end—especially with the way research is done now. The reading statistics from those who keep track of what pages of e-books are read bear that out. And increasingly, we are seeing books being licensed on a by-chapter or excerpt basis.

If this is how books are going to be monetized in the future, we want to make sure that authors are getting part of that money. We don’t want the level of devastation that hit the music industry to occur in books. We are actively trying to keep that from happening through our advocacy and our litigation. We need to take what they’ve learned in the music industry as a lesson and try to prevent people from thinking, “Oh, well, because books are available for free on the Internet, we don’t have to buy them, they should be free.”

Then, there is also the pressure that Amazon has been able to put on the industry as the monopoly player in online book retail market (for both e-book and hard copy), the pressure to set the prices of books lower than the industry can tolerate while still paying all book authors decently.

QUINN: What do you suppose the solution is to these problems? I ask because I’m a firm believer that if you want people to actually create—that is, if you want creatively talented people to create—you have to make it economically feasible for them to actually do that. Otherwise at best all you’re going to get is them doing it on a part-time basis as a hobby or on a very limited part-time basis for maybe a little extra money, but it’s going to take them a disproportionate amount of work compared to the money that they can bring in doing the work. They’re still not going to do as much of it as we would want them to do or as they would want to do. And I struggle with how it is that things are going to change. Do we need changes to the law? I feel like there is an unfortunate confusion in the part of the population that thinks these things should be free, and as a result intellectual property is not really respected the way that it once was, and it’s so easy to just copy and paste and send things around—and that really devalues the creation.

RASENBERGER: Well, that’s exactly right. That is the bigger societal problem that we’re dealing with here. We hear this all the time from the copy-left. I hear all the time—writers are going to write anyway, you know, they’re writers. They’ll write even if they don’t get paid. So why should we care about copyright? It makes me apoplectic when I hear this because I have lived most of my life among creators and, in particular, authors. If you can actually say that with a straight face, then you don’t even begin to understand what it is to be a book author. The kind of blog writing most of us can do is very different than writing the kind of books that people will want to read in the future. We don’t like to talk about quality as a general rule, because beauty is after all in the eye of the beholder, but we can all agree that the kind of writing done by true artists and those who have spent their education and careers honing their craft is, in general, vastly different than the kind of writing the rest of us do. Yes, we have lots of people writing blogs now, and they serve a very useful function, but twenty years from now who’s gonna want to go read that?

QUINN: It’s writing for a different purposes. I mean, generally when you’re writing a blog it’s a news thing, or maybe not even a news thing as much as a reaction or commentary to something that’s going on contemporaneously. That’s not to say that none of that is going to have any legs and won’t stand up to test of time, but it doesn’t stand up to test of time in the same way that a reference book would. They’re intended for different purposes.

RASENBERGER: Yes, exactly. That’s my point. Let’s take a piece of historical nonfiction that can take many years to research and write. For instance, one of our board members, T.J. Stiles—his most recent book, Custer’s Trials, won the Pulitzer—his second Pulitzer. That book took two to three years to write. His advance didn’t begin to cover his expenses for research and living in that two years, so he had to take on some extra work, even though he got a pretty good advance as historical nonfiction goes because he’d already won one Pulitzer. He did a talk that we published in our Bulletin where he shows what happens to a $200,000 advance. First, the agent gets $30,000, then 40% of it goes to taxes, and then pretty soon it’s not very much money particularly when you have to live off of it for three years. And, by the way, you have to pay for your research, because the publisher doesn’t pay. So any travel you have to do, research costs, if you have to do any clearances for photographs—the author pays for all of that out of the advance. And then you don’t get royalties until that advance is recouped. So even if the book does well you’re unlikely to see any money from the publisher for a very long time. The point is that most people cannot write these kinds of books without some kind of advance unless they are independently wealthy. And, even with an advance, it is not easy.

And most literary fiction, the kind of fiction that wins awards, and stands the test of time, those books often take years to write. So to just sort of offhandedly say writers are going to write anyway—that’s just not true!

Let me just say a word about copyright. Because I think copyright is really misunderstood. And it’s taken for granted, because we don’t understand how well it works. Copyright is incredibly important to our democracy. Our founders understood this because they saw that you need people who can write freely in order to support a democracy. You need a free flow of ideas in society. And that means you have to have a class of authors who are independent of patronage—independent from government support and even from academia because in academia you’re still bound by the constraints of what’s going to get you tenure and what’s acceptable by whatever academic standards. So, we believe in having books that are supported by the market, by the open market, meaning you can make money if the people will buy your book Copyright is the tool that enables you to use the free market to support your writing; it’s what the Supreme Court has called the “engine of free expression,” the tool that the founders gave authors to enable them to write independently and to support themselves doing so. And it’s worked really well until recently. But copyright is under attack because people would like to see everything for free online. There’s a big push now for free educational materials and it’s coming in part from the academic circles, and it just seems so short-sighted to me because how can you have good, free educational materials? Somebody has to write them, and they need to be paid for it. Free is relative. Are they saying they want the government to pay for educational materials? That seems pretty radical to me.

QUINN: Well, right. And it’s also funny to talk about free educational materials when the cost of education just continues to rise and has become so astronomical. It always seems to me that at the end of the day it boils down to a scheme for things that people want to be paid on the back of content creators. And we look the other way when it comes to realizing or just admitting that, hey, education costs a lot of money and the textbooks cost more than what we wish, but in the overall scheme of what you’re paying that is a very small amount of money. So maybe you should be worried about certain other things than constantly pushing down on the content creator. It feels to me like it’s always pushing down on the little guy in the equation. It’s the person who can’t push back. The creator is the only person in the whole equation, of all the people in the whole equation, you can’t do without. You can create distribution channels.

RASENBERGER: Yup.

QUINN: You can create websites now, you can create e-books and distribution, and you can print it if you want, and you can have seminars and you can create movies and all this other stuff. And you can start very small companies, and you can grow them, and they can gain traction, and there are blueprints out there on how to do all of this. Once upon a time Huffington Post, which we’ve talked about already, started from nothing and became a large going entity. But at the other end, if you don’t have content creation none of this is possible, zero.

RASENBERGER: Well, that’s absolutely right. And thank you for saying that. It does dismay me. There is a push now about education getting too expensive so we need to have free higher ed textbooks or reading material. I have one kid who just started college and another who’s going next year. So I know how high the cost of college is, and their textbook costs are minimal in comparison—I mean, it’s just a small fraction of the college cost. I have also done a lot of college touring recently. They’ve got fabulous athletic centers, fabulous dining halls. There are so many extras that these schools have now—do they really need them? I’m sending my kids to college to get educated, not to have a fancy country club life while they’re being educated. But I do want them reading great books.

QUINN: And that’s funny that you mention that because when I was going and seeing these schools — we have a son in college now — and that’s a great way to describe the living accommodations compared to what it was when we were in college. I do not recall this country club lifestyle when I was in college.

RASENBERGER: Well, you go to these schools and they have all these fancy new buildings. It’s impressive, but it upsets me when I hear people complain about the cost of books. I do think it’s true that we’re seeing this big transfer of wealth right now from the content sector to the tech sector. And part of that has come from this feeling that we need to promote technology—which may be true, but we shouldn’t do it at the cost of content creators. The publishers, the distributors, can push the problem down to the creator. It’s the authors who are getting burnt right now. They’re bearing the brunt of this transfer of wealth to the tech sector. So we’ve got Google saying, oh, we can’t possibly pay for using books in Google books. It’s like, are you kidding me? You have over $70 billion in cash, just uninvested cash right now and you can’t afford to pay authors? I think we estimated it was around $45 million when we did have a settlement with Google back in 2008 to pay authors for past use of their books. That is completely affordable from Google’s perspective.

So that’s why I started by saying I think we’ve taken copyright for granted. I just hope that we don’t have to go too far down the road before we realize that oh, yeah, copyright actually has played an incredibly valuable role in getting people to become writers, professional writers, and how valuable that is.

One of the early advocates for copyright was Daniel Webster who wrote the first American grammar book. He had been a teacher. And he was frustrated by the fact that publishers were just publishing his book without getting permission or paying him anything. So he went around, initially it was to all the colonies, telling the governments to adopt copyright laws. Copyright was put in the Constitution, and the first copyright law was passed in 1790, in part because Daniel Webster and others like him said, hey, we need to be able to make money from our books so that we can support ourselves and write the next book. And, indeed, because he was able to then make money from his grammar he was able to devote the many years it took to writing the first American dictionary.

QUINN: I’d like to bring us back to solutions. In terms of what you would like to see, in terms of what authors would like to see moving forward, what do you think you could achieve that would be reasonable and helpful?

RASENBERGER: Yes, let’s talk about the future because I do think there is reason for hope here, particularly if we can get people to value writing and understand the importance of copyright. There are many new business models, and some will present new opportunities for authors. I don’t know exactly what they will be—just think of how far we’ve come in 10 years—but undoubtedly there’s gonna be a huge implosion in the number of ways people can write and access books. Today will seem like the dark ages in 20 years. Already, there all these new formats, including short books and interactive books, and there are a lot of new platforms online for selling books and creating books. We need to start thinking outside the box about books and authors will find new way to connect to their readers. It will take a little bit of a shift for authors. They and their representatives will have to start thinking a little bit more like entrepreneurs, about how to access their ideal audiences. I don’t think there’s any silver bullet right now we’ve just got to stay open to new ways for authors to make money and write books and seize the new opportunities that present themselves. That is why it is so important for us to legally hold onto to income streams from new means of exploitation – it’s why we stayed in the Google Books case.

QUINN: Do you think authors moving forward are going to be more likely to sell themselves as a personality in a way and then sell their writings because people are already interested in them, or is it going to be the other way around?

RASENBERGER: I think it’s going to be everything. I think we’re going to see a real diversification of the way people write, the way people publish, and the way they market. And that’s what I think will be the healthiest. So traditional publishers will still exist because they fill one particular niche—the kinds of books that need investment. You need somebody who’s going to say I believe in this book, I’m going to give you an advance; I’m going to market it for you; I’m going to edit it for you. And then they’ll be all of these hybrid models with entities that help authors publish themselves or just distribute them. You might hire one entity to help you get into different chains of distribution, and find your own editor, your own translator, someone to do your marketing. There will be more self-publishing where authors create a brand for themselves and then you go out and hire the different types of people that you need to put together a nice package. And I think the most successful independently published authors do that now. They realize, hey, I’m a businessperson here, and they basically become small publishers themselves.

One point I want to make is a good book requires more than just a single author. It requires good editing. Every book can benefit from a good editor. And every book needs copy editing, and and marketing. And there’s more potential to get into international markets now, too, so authors should think about getting into those markets and having their books translated. Authors who are willing to take on the challenge of figuring out what their market is and what the best way for them to publish is will likely have the most success with that model.

From the Guild’s perspective, we can offer to help authors navigate all these option. We have been and will continue to provide education about what all the ways to publish are, advantages and disadvantages of each depending on the kind of book you are writing, the kind of person you are, and just helping them navigate this complexity and connect directly to their readers.

QUINN: Well, thank you very much for taking the time to chat with me about all this today, I really appreciate it.

RASENBERGER: My pleasure.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 3 Comments comments.

  1. Benny April 27, 2016 5:21 am

    ” I hear all the time—writers are going to write anyway, you know, they’re writers. They’ll write even if they don’t get paid”

    Gene, you are not getting paid directly to write this blog, are you? You could have taken up that statement from a personal point of view. It does hide a grain of truth.

  2. Anon2 April 27, 2016 8:44 am

    Benny@1

    That an individual has the right to give away what is rightfully his as he sees fit, and the fact that he does so for his own reasons, forms no justification for a proposal to seize it from him against his will.

    Your right to life and the values you create does not require justification by how your neighbor somehow could benefit from it. They are yours, by right, and rightly so.

    To propose the destruction of your rights on the basis that someone else, anyone else, will still be able to benefit from your pursuit of values, is a monstrous idea,

  3. Gene Quinn April 27, 2016 10:43 am

    Benny-

    Actually, I do get paid to write. IPWatchdog.com is my primary source of income and has been for years. If I were not getting paid to write do you seriously think I could spend as much time as I do writing and publishing the works of others? Seriously! Let’s try and keep it real, shall we?

    -Gene