From the eternaltubthumper rolling my eyes:
1) All past and present freelance editors and artists have been paid in full.
2) Many of you received 2 royalty checks in December; More of you will receive 2 royalty checks in January & February.
3) The accounting department will continue to focus on getting the new royalty system online by the end of February and processing royalties on the old system while paralleling them against the reports of the new system to insure all software bugs have been fixed. At some point in the next couple of months expect to receive 2 different royalty statements so you can compare the old way to the new way and make a smooth transition with it.
4) Nothing has changed at Amazon, though more publishers and authors are finally becoming vocal about how Amazon’s business practices are affecting them. Here’s a recent article; note the parallels between what others are reporting and what we’ve been saying all along: http://www.nytimes.com/2014/12/28/technology/amazon-offers-all-you-can-eat-books-authors-turn-up-noses.html?_r=0
5) Elisabeth has reacquired 2 of our former freelance editors who remained on positive, professional terms with us and we’re excited to have them back. Also, Susan Edwards is now editing full-time for us, which is excellent for our authors and thereby EC. (FYI: contrary to rumors Susan never left EC; She simply decided she wanted to edit instead.)
6) We still have a few tough business decisions to make, but overall 2015 is going to be a solid year.
Tina/Jaid
My Commentary
Let’s take them one at a time.
- If I’m reading this right, Tina’s admitting that, as of the time of the lawsuit, the freelance editors and artists were not paid, and have not been until just recently.
Hey, @pubnt, what is your explanation of why EC editors and artists were not paid for months at the time of the DA article? #notchilled
— At a Glance Romance (@ataglanceRMC) December 18, 2014
@ataglanceRMC @pubnt this is a lie, period.
— Jaid Black (@jaidblack) December 23, 2014
And yet, at least one of the checks was reportedly dated Christmas Eve. The day after that tweet. The ones I’ve heard of arriving all were postmarked after Christmas. -
Several authors have reported receiving checks for July and fewer still for August. One reported receiving June and August, but no July. Some have had no report (or check) for months.
-
So EC’s still using the “old” accounting system? After more than a year? Right.
If it’s still that fucked up, why sue Dear Author/Jane Litte instead of the software vendor?
I remain unconvinced that there ever was a new accounting/royalty system. -
“Nothing has changed at Amazon.” And then links to an article about how indie authors are affected by Kindle Unlimited—which has exactly zero to do with what happened before Kindle Unlimited came into effect? That article’s about stuff that happened after DA’s post, not before. H. M. Ward’s post was at the end of November about the prior 60 days.
Let’s put it this way: H. M. Ward, all by her lonesome, has sold six million books in three years. I’m a huge fan of her work. It is my crack.
My point here is that Holly’s revenue from said six million books puts her in EC’s ballpark, sales-figure-wise. -
“positive, professional terms with us” I’m guessing that means they didn’t complain when they weren’t paid.
On Susan. Well. It wasn’t a “rumor.” Susan Edwards’s LinkedIn page still says she’s freelance. Ellora’s Cave’s Leadership and Staff page doesn’t list her. EC’s Editors and Artists page doesn’t list her.. In theory, those sites are self-reported and authoritative for both parties in question.
Sounds more like a rumor that Susan is working at EC. -
Only a few?
I have a suggestion. The only lawsuit that makes any business sense is the accounting/royalty system vendor. Everything else is a distraction.Pay to settle the DA suit and move on.
Re: the “new” accounting system–the problems with it began in late fall of 2013. Well over a year ago. It makes no sense.
I used to write custom apps. Never had one drag on this long that didn’t involve multiple client changes of scope.
It boggles. Why would they let it go on this long? Something doesn’t smell right.
Like many others I don’t believe there ever was a new accounting system. Too many things don’t add up. Given how easily the principals at EC appear to lie (JMHI) I will believe in this new accting system when the Easter Bunny shows me the code and a signed contract.
BtW, after I challenged PNut to find 5 satisfied EC authors they suddenly morphed in a group of 8, of is it only 2? I have screenshots within the same 24 hr period of both claims. Unless someone is inflicted with Multiple Personality Disorder, PNut has once been caught out in yet another falsehood.
I’m starting to have my doubts as well. What they’ve been claiming just doesn’t make sense. I used to work in accounting at one of LA’s major law firms 20 years ago – and believe you me, if anything went wrong with our system, we got it fixed pronto. Don’t get between a lawyer and his money!
Where EC’s concerned, though, I wonder if we’ll ever find out the real truth. If they pull their heads out of their asses and strike a settlement with DA/JL, they might be able to keep some of their hinky business practices under wraps. Until they finally file for bankruptcy, ofc.
You know those shows that cover the whole crime in half an hour or an hour? I love those.
Why?
Because they’ve neatly digested the whole story.
This one’s unfolding in real time, and I’ve always found the news cycle frustrating because it’s news before there’s actual information. Then news shows run incessant teasers about one new (small) bit of information, and they carefully place it at the end of a show. I hate that.
We may never, as you say, know the whole story on this one.
Hold on.
The eyeball-searing website (seriously, people, why the hell would people voluntarily go there to buy anything? It’s nigh unreadable) claims six editors. Six.
The nauseating nut claims that EC has thousands of “happy, professional” authors. How many authors is each editor wrangling? How many manuscripts per author currently undergoing edits?
The absurdity of the entire operation is beyond belief.
And we are expected to believe everyone who is owed money has been paid, despite visual evidence to the contrary? All those back dated checks that take longer to get from Ohio to Texas than they would to a remote village in the middle of a war zone somewhere in Africa?
I’m sitting here wondering whether Tina is trying to convince herself that she’s the victim of a vast conspiracy to make her look bad.
She doesn’t need our help.
Authors no longer have assigned editors. Instead, when they send in a manuscript, the managing editor rejects or accepts it and puts it in a queue. The accepted manuscripts are assigned to an editor based on availability/their spot in the queue.
I’m already hearing horror stories about rude rejections from the new managing editor. This despite the fact that they only have about ten or eleven books (not counting all those Serpentari chapters) on the Coming Soon pages of the website.
One of the things on my plate (and I’m going to share the Google doc with a few people interested in helping finish it, with the goal being that the info would be public) is a spreadsheet.
In the first 24, median number of books is three, and the average date of their most recent publication is September 15, 2012. That includes two authors with publication dates of next month.
Um, and considering the new managing editor’s background is in BIBLES, I’m thinking she’s not the best judge of erotic fiction.
There’s that, too.
Yeah, she fits in perfectly with EC output, let alone with Tina “giving you the finger” Engler, huh?
There’s always Song of Solomon!
The actions of EC are NOT those of a company attempting to “cut the fat” to be competitive. All the classic hallmarks of a company approaching the point of bankruptcy are there. Suing was the worst possible decision the management of EC could have taken because now EVERYTHING is under scrutiny and IMO this is NOT a company whose business practices will withstand the hot white light of even the most cursory examination.
The “new” accounting system that is still producing dubious royalty statements that require hand reconciling? Uhm, I have seen before and after statements and they are virtually identical. Down to font and column placement. Hardly a customized package costing many, many thousands of dollars per EC. I am an excellent DBD and I can’t come up with a reason the new royalty statements would replicate the reports generated by EXcel which these have all the appearance of doing. Or why the software would still be causing problems more than a year later. Unless I see a signed contract, service agreement, and the actual code I am going with the opinion that this new accting system has as much reality as Santa Claus, the Easter Bunny or the Tooth Fairy. At least they leave you presents or money unlike EC who Mail seems to fall into a black hole and transverse the universe before arriving in the recipient’s mailbox with a postmark several weeks after the check enclosed.
I have made the offer to several authors but I will throw it out there again. If anyone wants to band together and request the audit included in the language of most contracts with EC, I , as an uninvolved bystander, will contribute a minimum of $500 to the froresic auditor’s fee and will help organize a fundraiser to gather the additional resources needed. Until EC’s books are subjected to outside scruntiny I would personally doubt any and all royalty statements any author receives.
Is it okay if I spread the word via Karen Scott’s and my own blogs?
Of course. I strongly feel that the only way that the authors and other contractors are going to see a true accounting of their fruits if their labor is through a forensic accounting of EC’s books and a reconciliation with outside venders. If we can make that happen, I will be glad to help. I may just be a very unhappy customer in this equation but ultimately it is customers like me that pay for all. At least this way I can get a true accounting of where my money went.
If EC has truly been aboard with their authors and other contractors they should welcome an audit. If not. Well, armed with the truth is never a bad thing.
Or, as an alternative hypothesis, having seen you ask about the statement format on Twitter and having seen Trista’s reply saying the statement format had not changed, Tina decided to address that in her letter.
I’ll leave the opinion of whether or not it was a truthful statement up to others, but in my experience, a system for a company that small would not take that long (or the reported amount of money). Period.
This is an amazing offer, Julaine. I’ve signal boosted it at AbsoluteWrite too, where quite a few EC authors are reading the 45-page thread in the Bewares section.
Maybe The Passive Voice would be interested….
Julaine, I’m a reader who stands on the side of “not EC” – and yeah, I’d donate.
Awesome, thank you so much!
I’ve seen software disasters like the one EC keeps alluding to as its “accounting/royalty system.” They happened when someone in management decided to save some money by hiring an acquaintance’s son’s former college roommate who was just starting up his own business. Such a deal!
Things like that happen when no one in management has the savvy and/or authority to head off such catastrophes at the pass. And these are exactly the kinds of set ups that you see all too often in family-run companies where authority is on held by people without the education or skills required to keep up with rapidly evolving technology and economic conditions. Quickly devolves into a double whammy, where Junior’s Genius Software Company becomes a convenient whipping boy for a whole host of problems. As long as Junior is running around dropping things, no one questions other weird stuff, so why get rid of him?
No way to know if that’s what took place at EC, but it wouldn’t be the first time a company has imploded while the folks at the top sat on their hands.
As long as we’re talking rampant speculation….
One of the Cavemen has a degree in accounting, and he also authored a novel for EC about a computer and financial genius, someone who wrote code unbelievably quickly (and I say this as someone in the field for 38 years). Who I most certainly hope is not in the hypothetical position of Junior Genius here. Oh, and bonus! Said person also lists EC as his employer on his FB page.
And, seriously, if there is a company, any company really in this position? I feel for them.
My personal hypothesis (a far more realistic one) is that it was a fixed price contract that was underbid, which generally shuffle to the end of the client queue when the project overruns. Why? Gotta eat.
It’s super easy to underbid, to accept haggling down, to doubt that something will take you that long. I’ve done it, and I’ve cleaned up after other people who did it, and it’s the reason I won’t work fixed price. There’s a disincentive on the client’s side to really unpack the problem space until the ink is dry on the contract.
In a prior job, I didn’t know I was working for a company who’d bid fixed price—to a client wanting integration with SalesForce, which was a largely unknown (and, worse, undefined) problem space. Worse, my employer did not charge properly for changes of scope and then blamed me for cost overruns, which I took part of the bath on. Had I known that was going to happen, I wouldn’t have accepted the job.
It’s really easy to say, “Oh, that’ll be easy,” but if it were that easy, it’d already be done.
In 38 years of software engineering, I’ve seen disaster all kinds of ways, but, if there actually is a much-delayed new accounting/royalty system, I’m betting underbidding’s a big part of it.
Your perspective—speculative though it might be—makes a lot of sense. However I still see a lot of room for secondary benefits from “under-performance” to provide misdirection for a fumbling leadership.
I am really confused by something.
By all reports, checks are arriving many weeks post-dated.
Assuming that the checks are being generated by the accounting system…how the HELL do you blame the delay between the date on the check and the date things are mailed on the accounting system?
If I sit down and do financials processing on 11/3, the output of that run (invoices, checks, etc) should be dated 11/3. If something is wrong and I have to re-run financials on, say, 11/7, then the output will be dated 11/7. IF I can’t fix what is wrong until 11/30, the output will be dated 11/30.
So what’s up with the postdated checks?
Of course, it’s always possible to do things like play with system clocks to fool a system into thinking something’s happening on a different day than it actually is.
As you point out, it’s not even in the same accounting month. This has been (per various reports) going on since late 2013. (See Lolita Lopez’s report here.)
My guess, and it’s only a guess is that they are reconciling royalties, generating the checks and then sticking them in a drawer until they have the capital to cover them. This would allow them to use the money coming in from venders to cover operating expenses during the intervening interval. It’s not ethical and only works as a financial strategy if future income increases sufficiently to cover the shortfall. The old robbing Peter to pay Paul business model. Problem is, what happens when income continues to fall like it appears to per statements from EC management? The gap between cash on hand and necessary expenditures increases and the pressure is even greater to use the money earmarked for royalties and salaries to cover overhead and the hole gets that much deeper.
I don’t know who EC thinks it is fooling. The pattern of backdating checks has been going on for months now. You would have to be hopelessly naive to think EC isn’t under financial pressure when a check is dated 11/03, postmarked 12/26 and arriving in the New Year and that has been their consistent pattern for more than a year.
We used to write the checks then hold them until the funds were there when I was in Scientology. Granted, in that case it was typically the same period (e.g., within the same week). Partly that was due to the bank occasionally putting holds on deposits (for which there were very good reasons).
Even then, though, never anything approaching six weeks or two months!
This. This is what I’ve been thinking since the disparity between date of the check and postmark started coming up in conversations. It’s the only explanation that makes sense as to why EC is doing this.
But why remain so obvious about it? That’s what I don’t get.
It’s one thing when you’re hiding the postmark date, but quite another when you’re not.
Let’s talk in hypotheticals here.
Known facts: per Brashear lawsuit. EC/Jasmine Jade rented warehouse space from Tina Engler’s at 2.5 times the going rate for similar property in Akron (approx 100K/ mo. vs 40K/mo therefore generating potentially 720K in addtl yearly income for Tina) this is overhead for EC & rent is part of the operating expenses but the company is privately owned w/ Tina the majority stockholder.
EC entered into a costly contract with the purchase or rental of a POD printer to attempt to cut out the middleman for printing. Also canceling agreements with Ingrams. Contracts w/ Borders Booksellers result in a failed lawsuit and the printer also sued EC/Jasmine Jade.
After several years of being one of the only purveyors of erotic fiction marketed for women and running a successful digital first small pub. other competitors appear on the market. These new houses have the advantage of seeing what worked or failed in the past. EC is reluctant or unable to adapt to competition.
Amazon enters the digital market in a major way. Creates game changing ways for consumers to purchase digital books. Self publishing explodes causing a massive shift in options for those readers and competition enters the erotic romance market for good.
EC is slow to adapt. Rests heavily on its brand and past reputation for what many thought was a niche market. Many of the authors that got their start at EC now have many more viable options to maximize their readership including competing digital first houses, traditional publishers and self publishing. Instead of investing in new technology, competitive pricing and marketing EC continues to plod along doing things the way they had been doing them since their early days.
Nepotism and cronyism sets in as is often the case with small privately owned and operated business. Pressure to produce more, often with less quality control, sets in to keep profit margins up. Non-qualified people are in charge of crucial elements of the operation making it easier to miss emerging trends.
Now we have a perfect storm. Readership is falling, the top authors have more options and begin leaving and many of the new authors that would replace them have other options and may not submit to EC. Competition hits overdrive as their biggest vendor becomes their major competitor, often with offerings from the same authors for lower prices. Programs introduced to cut costs for consumers even lower and EC
wants to maintain the status quo.
It’s the fall of 2013. Revenues are down but overhead is not. Robbing Peter to pay Paul begins and as more resources are diverted to overhead the bigger the gap between revenue and accts. payable gets. Payments to writers, contractors and employees slip further and further behind and tensions mount. By summer it becomes apparent that revenue is so far down they can’t pay their overhead cut creative talent and support staff to bare bones. Problem is without the personnel that can’t produce the same amount or quality of product and panic sets in….
Leading to a lawsuit against an industry blogger with the knowledge, eye & resources to put the pieces together and report on very distressing picture of a once flourishing company that is floundering.
Hello Streistand Effect
Hello Boycotts and Fundraisers
Hello Increased Scrutiny
Hello Lone Defender spBaying at the Moon.
Goodbye Rationality.
The irony is that, despite having started as a small agile firm, they got to where they had a cost structure that made them less agile.
It’s also fairly evident to me from a few things JB’s said that she’s not deeply in touch with the market or the key people in that market.
So the nuances of the changes in marketplace where indies have 100 messages up on the Yahoo! selfpublish list before I so much as get coffee, could easily get missed by a less agile company.
Please note that all of the above was merely conjecture, opinion and hypothetical spitballing. I have no insider knowledge. I am just an interested bystander that wants to see the hardworking authors, creative staff and employees caught in the middle of a horrible situation get the information they need to make informed discussions about their options.
Of course. 🙂
“accounting department will continue to focus on getting the new royalty system online by the end of February”
Is this a new new royalty system or the old new system that was blamed for all the problems? Seems like they’d be better off with a couple of spreadsheets or a notepad and calculator …
Rick said the other night, “you can do bookkeeping on paper, you know!”
And my mother and I looked at him like he was an alien. What I’d told him, but he’d momentarily forgotten, was that my mother insisted that I could do whatever I wanted job-wise so long as I had professional-quality skills in two areas: bookkeeping and typing. That way, I could ensure that I’d never starve.
When he said that, I immediately thought of those lessons on double-entry ledgers when I was about 14. They happened to be the real books for my stepfather’s business.
My own experience is that entering data takes about the same amount of time on paper vs. into a computer system. Where the computer wins is in different kinds of reporting and error catching.