In regard to what both Kris Rusch and the Passive Voice have reported about traditional publishers under-reporting ebook sales figures to their authors —
IMO, this is an issue that’s only going to get larger, in that trad publishers putting out ebooks do not have the same option that they did with print books, for cheating writers out of their rightful earnings. With print books, trad publishers have the notorious and onerous “reserve against returns” racket, by which they can easily — and virtually legally, since there’s little that authors could ever do about it — hold on to the money that they should have been paying out. This of course is why so-called audits of publishers’ accounts rarely result in any money actually going to the writer; the most that’s discovered is that the publisher did the easy and legal swindle, rather than some difficult and illegal swindle, in order to hang on to the money.
James M. Cain, of THE POSTMAN ALWAYS RINGS TWICE fame, was one of the first to point out the true nature of the reserve against returns and how it would be used to defraud writers; it’s a real tragedy that his proposal back in the 1940s to establish an ASCAP-like collections authority for writers didn’t go anywhere, primarily due to writers foolishly believing that publishing was a “gentleman’s business,” unlike the shady Tin Pan Alley environment that songwriters and musicians had to operate in. We’ve pretty much learned differently about that one, haven’t we?
Obviously, there are few-to-zero “returns” with ebooks against which traditional publishers can argue they need to hold back a reserve of an author’s online sales. So equally obvious, trad publishers might feel they need to find another way of hanging on to the money they should be paying out — and that would be to under-report sales. But by doing so, they open themselves up to audits that would turn up something funky in the sales figures they’re providing to their authors. So such audits could be productive, in a way that they never were before.