For the second time in a little over a year, Cengage has been sued by a group of textbook authors. The authors are pursuing a class action lawsuit against Cengage for violating the terms of their contracts by unilaterally changing their payment structures from a traditional per-sale royalty to a relative use share, thereby lowering their income dramatically. We applaud the lawsuit and hope that the class is certified.
When Cengage launched its Cengage Unlimited digital subscription service for students, it changed its payment basis to relative use of an author’s title as compared to other titles in the same revenue pool, instead of paying the author a traditional per-sale royalty provided for in the publishing agreement. Cengage made this change knowing full well that it was violating its terms with authors. In a lawsuit brought last year (which later settled), Cengage further admitted that the pool factors in other elements added by Cengage to the courseware (such as multimedia, tests, and homework) that were not contributed by the authors and that decrease the overall revenue basis against which royalties are calculated and paid to authors. Rather than negotiating the terms in good faith and giving authors a chance to bargain for their fair share of digital subscription revenues, Cengage unilaterally decided what its authors’ contributions were worth. In doing so, Cengage took advantage of authors, hedging that few authors would have the resources to mount a lawsuit.
Cengage argues that the new model—which gives its subscribers access to a group of titles for a flat fee (per semester, per year, or per two-year period)—is necessary today because students are not buying expensive textbooks. The Authors Guild recognizes that there is a need to reduce the cost of textbooks and other written educational material for college and graduate students, and that students have shown an increasing preference for ebook access as opposed to purchasing print copies of textbooks. Innovation in the textbook market is desperately needed. However, as we have said time and again, innovation should not bring detriment to authors. By failing to consult with authors and renegotiate contracts, Cengage has shown enormous disrespect and disregard for its authors and their welfare. Taking money from authors without their say is not the proper way to address changing markets. It’s theft. We call on Cengage to address these issues fairly—not just with the authors who bring suit, but with all their authors.