I’m pretty late with this post, and most of you probably know all about this drama. It’s continuing to evolve and I’d like to share my thoughts since I’m one of the authors that lost money in this fiasco.
On December 28, 2016, I was sitting in my warm living room with my visiting parents–I’m in England–when I received the email about the closure of a popular ebook platform: All Romance Ebooks. My books have been active on that site on and off for a couple of years now. Some months I made pizza party money, and others barely enough to buy a cup of coffee; okay, a venti cup.
In the email, the company president–Lori James–said ARe would be unable to pay fourth quarter royalties (isn’t that money supposed to be in a separate account? Where did it go? I digress already…) and the storefront would close by midnight December 31st. Furthermore, ARe proposed I take a settlement of $0.10 on the dollar for any sales made until December 27th.
Remember earlier when I said I received this email on December 28th? Oh, recall that the store wasn’t going to close until December 31st? What about sales made after the 27th? No settlement deal on sales made during the last four days of the month?
Before I get into whether or not I took the settlement, let’s examine a few more issues.
- Authors reported receiving solicitation emails to PURCHASE ADS ON THE ARe SITE FOR 2017–some costing $2000.00–days before the closure notice. Perhaps this was an automated email. Regardless, those running this business more than likely knew they were going to shut it down before those emails were sent. Should’ve pressed the cancel button on that automation. Just sayin’. ‘Cause it looked like ARe was trying to get people to give them more money before it closed up shop for good.
- Readers received a similar closure email, only it stated that they better back up their files and use their rebates ASAP. As I understood the rebate system–and I could totally be wrong so someone correct me–authors were still supposed to receive FULL 65% royalties on rebate sales. Not anymore.
- Authors reported the site “crashing” as they tried to deactivate/delete their ebook files as we suspect everyone was on that site trying to delete accounts, use rebates, and back up files. I deactivated my books right after I read that email so the likelihood of any future sales should be zero, right? Maybe.
- On the 31st, I tried to download my sales report and wasn’t allowed to see anything past the 27th. Who knows what I sold? Futhermore, other authors–including myself–noticed a sharp decline in book sales recently and are questioning the reports their seeing on the website. Audit, anyone?
- Authors who were DIRECTLY CONTRACTED BY ARe were told to accept the settlement or the rights to their books would be withheld. Wow. I mean, they wrote the books and your business is bust. Might as well give the rights back since everything else is basically lost. But, getting people to take the settlement would rule out being sued later on by those same people and probably bankruptcy–which the president wrote in her email that she was trying to avoid.
- Then there’s this whole thing about the president being sued just two years ago for allegedly forcing the comptroller out of her position and yada yada yada, breach of fiduciary duties, yada yada yada, unjust enrichment. No, that doesn’t seem to be a problem; not at all.
Sure, royalties should’ve been kept separate from other business accounts to avoid this very thing. We don’t know how Lori James conducted business behind closed doors; we only see the results. Authors report earnings lost in the thousands. We’re talking over $10,000.00 for a single author just in fourth quarter 2016. Nearly $100,000.00 in total losses has been reported by a few authors.
No, I didn’t take the settlement. Yes, I’m aware that a civil case would likely mean I’m out of pocket more money than I lost and I’ll never see that dime offered to begin with. Just last week, a class action lawsuit has been filed in the state of Florida where the business is registered.
This new year started with a bang. Another revenue stream gone and it looked shady as it left. What does this all mean? Indie authors have to adapt to the ever-changing landscape of publishing. New storefronts will emerge from the steaming pile left by ARe promising a better, safer way to earn money. There’s no guarantee that this will never happen again to any of us. We could lose money to another business. We could also earn more too. The “secret” sauce has always been to write, publish, and repeat, along with growing your mailing list. That’s what I’ll be doing in 2017.
HAPPY NEW YEAR!