Authors Knox and Schacht file lawsuit against Cengage, claiming company has ‘trampled on its authors’ rights’

Textbook StackCengage authors David Knox and Caroline Schacht filed a class action lawsuit in the U.S. District Court for the Southern District of New York on May 14 against Cengage claiming the company’s emphasis on digital distribution, including its new Cengage Unlimited model and expanded digital courseware offerings, have violated their publishing agreements. The suit also claims that the company is refusing to provide information that would allow them to audit their royalty payments.

According to the complaint, Cengage’s plan to overhaul its business model after emerging from bankruptcy in 2014, “has trampled on its authors’ rights”. The suit alleges that Cengage’s new Cengage Unlimited business model has the company “dismantling its support” for individual title sales in favor of selling subscriptions to Cengage Unlimited, which plaintiffs say violates their contracts and will reduce the amount of royalties they will earn, while allowing Cengage to retain a larger share of revenue. [Read more…]

Cengage says authors cannot opt out of Cengage Unlimited

textbook opt outIn a recent post on the Cengage blog, Erin Joyner, the company’s senior vice president of product, said that authors cannot opt out of Cengage Unlimited. However, industry experts say Cengage cannot make this sweeping statement.

“The large majority of publishing agreements do not contemplate the Cengage Unlimited model of distribution,” said David Slarskey, a litigator with Slarskey LLC. “Refusing author demands to opt-out tends to undermine the terms of the contract.”
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2018 Textbook award-winning insight (Part 1): Deciding to write and getting the interest of a publisher

2017 TAA Textbook AwardsWe recently reached out to winners of the 2018 TAA Textbook Awards and asked them to answer some questions about how they made the decision to write their textbook, how they interested a publisher, what they do to boost their writing confidence, how they fit writing time into their schedule, and more. We will be sharing their answers in a series of posts over the next few weeks.

This first installment of the four-part series focuses on why they decided to write their textbook, and how they got the interest of a publisher. [Read more…]

Executive Director’s Message: Developing sustainable textbook business models

Textbooks have a very different challenge from journals in converting to online businesses. First, readers have not embraced longer works online quite as enthusiastically as they adopted shorter journal articles. Print continues to have strong appeal as a reading format.

Another critical barrier to developing sustainable online textbook business models is working out the complexities of author royalties.

We have entered a new phase of experimentation with textbook business models. One major textbook publisher recently introduced a digital platform providing student access to all eligible textbooks in the publisher’s portfolio for a flat rental fee per semester. This is but one version of a broader strategy called “inclusive access” (see Joe Esposito’s excellent post on this in SSP’s Scholarly Kitchen blog from March of last year). Inclusive access plans enable institutions to negotiate for campus-wide access to titles for a student fee that can be a fraction of the current average cost of textbooks each semester.

There are serious concerns among authors – especially of works already published – about how these new plans will impact royalties. Are authors paid a small share of every student fee collected?…every time their work gets used?…or only when the work is adopted for a particular course? It is unknown how online royalties accounting can be audited, or whether author royalties for online access can remain at least comparable to print royalties.

Even so, experimentation with business models is necessary. Textbook publishing must adapt to both the threats and opportunities presented by the digital environment.

The business case for aggregated fees rests on expanding market share and increasing the percentage of students who purchase access digitally. Inclusive access and other strategies have already reduced student average spending per semester and per book in recent years, according to the Association of American Publishers (AAP), and the number of students who are getting by without purchasing a textbook, or only buying used books is still apparently very high today (see http://bit.ly/2ivJwlY).

Non-sales and used copy sales do not contribute anything to author or publisher royalties. Changing that dynamic might stabilize author royalties even if the royalty ‘per unit’ is lower. But there are risks for authors in the new arrangements, and the rollout of publisher business model experiments has so far been shrouded in secrecy. Publishers who want to act as partners with authors will take steps to inform them and address their questions before experimental models are presented to the market. And authors, as key stakeholders, should remain open minded to new models, but express their concerns and ideas pro-actively with their publishers whenever possible.

~ Michael Spinella, TAA Executive Director

3/7 TAA Webinar: ‘Royalty Disputes: Legal Strategies in Pursuit of Information and Payments Due’

Juli SaitzDavid SlarskeyJoin us Wednesday, March 7 from 2-3 p.m. ET for the TAA Webinar, “Royalty Disputes: Legal Strategies in Pursuit of Information and Payments Due”, presented by dispute resolution lawyer David Slarskey and royalty auditor Juli Saitz. The two will discuss the challenges associated with getting reliable information from publishers, the state of the law for authors seeking access to data, and negotiation and legal strategies for pursuing recoveries while protecting relationships.

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Cengage promises more details about how royalties will be calculated on Cengage Unlimited subscriptions by March

TextbooksIn a January 25 email to its authors, Cengage said that it will have more detailed information about how royalties will be calculated on Cengage Unlimited subscriptions by March. “With the introduction of Cengage Unlimited, we know authors are keenly interested in how royalties will be calculated,” the email stated. “To answer that question, we are currently building out the Cengage Unlimited platform and assessing financial and royalty systems to enhance our ability to track student access.” [Read more…]

Cengage ‘will honor all contractual obligations’ with authors under Unlimited model

online libraryCengage’s Chief Product Officer Fernando Bleichmar said the company will continue to honor its contractual obligations with authors under the Cengage Unlimited model, but that the contract they have with authors generally grants them the discretion to publish the work in the way they think best helps drive the sales of those titles.

“We have spent significant time with our internal teams making sure the contracts allow us to do the Unlimited model,” he said. “The contracts are established in a way in which the publishers have the discretion of evolving the model that benefits both the authors and the publisher, and our contracts allow the creation of different models. We are going through all the details in the contracts, having those conversations with our authors to make sure they are comfortable with the Unlimited model as we move forward.” [Read more…]

Authors express concern about new Cengage Unlimited subscription service

online booksCengage’s announcement of a new subscription service, Cengage Unlimited, that gives students at U.S. higher education institutions access to all of the company’s digital higher education materials for $119.99 a semester has Cengage authors concerned about how their contracts will be affected.

“I think the authors should find out as soon as possible how we are going to be paid,” said mathematics author Pat McKeague, who did not receive any information from his publisher about the new service prior to its public announcement, and has not been able to reach his editor for more information. “My contracts require my written permission before any electronic version of my book can be published.” [Read more…]

Collecting unpaid royalties: Trends, traps, and litigation strategies in textbook royalty enforcement

textbooksMuch has been written about changes in the college textbook marketplace over the last decade. The industry has adapted to new pedagogical methods, the proliferation of digital learning materials, and profitability pressures felt by publishers — all leading to significant innovation in the publication of learning materials. Some observers have concluded that we may be witnessing the death of the textbook as we have known it.

As the textbook publishing marketplace has changed, so too have relationships evolved between authors and their publishers. Commercial arrangements forged in the era of print media — which were amended and extended over time to apply to the publication of new editions — have been impacted by these industry-wide changes. [Read more…]

How to part with your publisher when your textbook goes out of print

Textbook ResearchDuring the 2017 TAA Conference session, “Wanna Get Away? Maybe Now You Can: Parting with Your Publisher,” intellectual property attorney Stephen E. Gillen, a partner at Wood, Herron & Evans, said that one event that can open the door to parting with your publisher is when your textbook goes out of print.

When and how your textbook goes out of print is governed by your contract, said Gillen, which means it’s best to think about these situations in the early stages of negotiating your publishing contract. “They [your publisher] are probably going to be more inclined to make changes in that language in the beginning than they would be somewhere along the way,” he said. [Read more…]