With major houses like HarperCollins adopting a paperless model for their catalogues, it's easy to wonder when publishers might update other older aspects of their business, such as mailing out royalty statements. Currently, almost all houses handle royalties the old-fashioned way—they print out statements, stuff them in envelopes and physically mail them to their authors. But why? That was the question posed by one agent after he read about Harper going digital with its catalogues.

Calls to most of the major houses, however, found that a move to digital royalty statements is still a ways off. As an executive at one house noted, the sheer volume of the statements handled makes changing the system difficult. Although nearly every major publisher has a digital system in place to track royalties, none sends out statements electronically.

Those who are pushing for publishers to update the way they send royalty statements argue that a move to digital delivery would save money and help the environment. Dave Marlin, whose company, MetaComet, supplies royalty software to a number of publishers, estimated that one of his midsize customers, in doing its year-end royalty deployment, uses on average a million sheets of paper and spends roughly $1 per statement (including postage, ink and labor costs). Which poses the question: if publishers want to save money and be more environmentally friendly, why aren't they sending their royalties out through e-mail?

The simple answer is that change is hard. Although Marlin thinks this could be the year that some houses make the switch, he acknowledged that altering the royalty process at a major house is no small task. Since that process is extremely complicated, changing it essentially means upending a well-oiled machine. “The customers we work with have very efficient royalty departments,” Marlin said. “When you introduce a change to that process, there's always reluctance and concern about control.”

Marlin could cite only one client, a small publisher out of Georgia, that sends its statements via e-mail. Another house that delivers its royalty statements electronically is the indie Two Dollar Radio. For Two Dollar Radio, which was founded in 2005, sending the statements digitally made the most sense from the outset. Eliza Jane Obenauf, who runs Two Dollar Radio with her husband, Eric, said it simply never occurred to her not to send the statements electronically. In her current process, royalties are attached to e-mails as PDFs and snail mail statements come into play only when a check is involved. Obenauf added that she wasn't aware it was standard practice to mail royalty statements. Of course, the scale of Two Dollar Radio's business makes it easier to use a digital model; Obenauf can track royalties in Excel since the house has, to date, published only 14 titles.

While one major house said it's exploring the possibility of deploying statements electronically, the current economic climate will likely affect how publishers address this aspect of their business. As Marlin noted, although making a change like this will eventually save money, there will be initial costs and the transition could suck up the time of an already overextended IT department.

There's also the issue of control. One aspect of the existing system that works well is the physical act of matching checks with their corresponding statements. Without this last review, Marlin said, some of his clients worry mistakes might happen. While Marlin noted that the “control issue” is something that needs to be addressed if royalty departments start sending statements electronically, he's confident it can be done. “We're pushing it for two reasons: we believe we can make it financially justifiable and because of the environmental impact.”