February 19 – 26, 2009 Edition

Authors Guild Warns
of Possible Kindle2
Audio Rights Issue

NEW YORK, NY (Authorlink News, February 19, 2009)—The Authors Guild has issued a warning to its members not to sign any e-book rights to Amazon’s Kindle2 reading device until the Guild has a chance to study what it sees as a possible rights issue. The Guild is concerned that Kindle 2’s text-to-speech function, which reads e-books aloud, has the potential to infringe on an author’s rights because Amazon hasn’t specifically received authorization to create what the Guild regards as an “audio book” from book text. This may signal another move for The Guild to broaden its authority over digital rights, as we discuss below.

Some see text-to-speech as an automatic conversion into a separate audio format, for which the author would traditionally be paid more money.

As Authorlink understands, the text-to-speech feature on the Kindle 2.0, it is not a feature that can be enabled or disabled on a title by title basis. It is merely technology that reads whatever text is being displayed on the device, be it a novel, a blog, or a personal document one might have emailed to their Kindle.  

A recent PW article quoted Amazon spokesperson Andrew Herdener as saying that Text-to-Speech is legal. He added: “Is it illegal to read a book out loud to yourself? Is it the case that one is only allowed to legally read if one does so silently? When you listen to yourself read out loud, you’re not performing—you’d need an audience for that—and you’re not making a copy.” He also pointed out that Amazon has a complete audiobook business in its subsidiary Audible, and said text-to-speech “provides a completely different experience from a professionally recorded audiobook.”

Proponents of the technology say it will be a boon to blind and partially sighted people, though others say Kindle2 isn’t designed for use by the blind. Similar verbal reading devices are already available on the market.  

As the digital book world evolves, audio books may well be bundled together with e-books, giving consumers a wider choice about how they receive book content. But the Guild is angling that these rights should remain separate. In the past, book rights and audio rights have been negotiated as two distinct items so that the author could maximize earnings. More and more, publishers are retaining all digital rights as part of an omnibus book deal, and digital distribution channels such as Amazon and Google are negotiating the use of such content as complete packages containing several different formats.

The whole digital rights situation, in Authorlink’s view, gets clouded by who the big players are, and which ones are making money from the author’s product, beginning with the recent Google court settlement. 

As background, The Authors Guild, together with the Association of Authors Representatives, has extracted a $125 million court settlement from Google to compensate authors for illegal book copying on the Internet. That might be a good thing were the court decision a straight-forward payout of those funds directly to the authors. However, the settlement creates a new Book Rights Registry funded by Google itself, and it actually broadens Google’s legal ability to scan and sell entire books. Furthermore, the settlement requires nearly every author to formally opt in or out of Google’s search programs through the Rights Registry.

As part of the settlement, the Author’s Guild and the AAP are in charge of setting up and initially running the Registry, a sort of world police headquarters for authors’ digital rights–so far specifically related to Google’s use of product. Like it or not, every author (or author’s estate) whose book is searched and found on Google, must file  paperwork and channel their applications through the official Book Rights Registry in order to opt in or out of the program. Who wouldn’t want to be found on Google? If the author of an out-of-print book simply ignores the situation, or doesn’t get the settlement message by deadline day (May 5, 2009), he/she will be opted in by default. And if the rightsholder doesn’t specify a book price, Google will decide for that person.

Before the settlement, Google argued that  it had every right to digitize entire books under the Fair Use Doctrine–to display snippets, and then sell the books to consumers.  The Guild and AAP disagreed and filed suit. After millions of dollars in legal fees and many hours of negotiation to prevent Google from digitizing full books, the fact is, Google can now legally do that very thing under the settlement, in many cases deciding how much it will pay authors for doing so (because of the price-setting provisions in the settlement).

It appears that Google has essentially paid off its detractors and won the full use it wanted in the first place.  

Under the settlement, and in fairness to the Guild and AAP, authors will now be paid a small sum for books Google has already illegally scanned (generally about $60 per title). Without the lawsuit, the amount might have been zero. Going forward, authors will receive about 40-50% of the net revenues on electronic book sales (after Rights Registry fees). At first, this may seem like a lot, but in many cases, the compensation is far less than they might have received on a digital sale before the Google settlement became the industry model. See Authorlink’s mathematic examples.    

In addition to paying for its own enforcement overseer (the Rights Registry), Google is also paying a huge chunk in fees to the very lawyers hired by the Guild and AAP to sue Google for wrongdoing (this, according to a recent Independent Book Publishers Association article. The settlement looks like forced collectivization in favor of Google, where a hefty percentage of the profits go to administrative middlemen (and lawyers) rather than those who actually created the product. 

The Author’s Guild is a large, well-funded, self-appointed law office for writers. Because of its initial position on the Registry board, it has successfully become a de facto manager of authors’ rights with respect to Google usage (via the Rights Registry). By warning writers against Amazon’s text-to-speech technology, we wonder if the Guild now wants to extend its powers over Amazon usage too. Clearly, someone has to protect the author. Traditionally that has been the literary agent’s role.

We will be watching closely to see how the Registry board is constituted, and to whom they are accountable for the huge pot of money now in play.

Every author, agent, and publisher would benefit from reading the details of the Google settlement and the digital rights contracts of both Amazon and Google. As for the Google settlement, rightsholders who feel Google is acquiring too many rights for too little money, have only until May 5, 2009 to file objections with the court.

Here are some important resources to help rightsholders understand what’s at stake in the Google deal:

Detailed information on the settlement:
The Authors Guild:
The Association of American Publishers:

European Booksellers Foundation voices concerns, Search Google settlement for all articles. (great article by Jonathan Kirsch, titled: What the Google Settlement Means for Publishers and Authors)

With respect to Amazon Kindle2’s text-to-speech feature, authors may want to look to their publishers and agents for more contractual clarification.