Profit Sharing is Awesome! Or, is it?
With profits down in the industry, publishers come up with a solution: let's share them with the authors (oh, and also, let's do away with advances).
People have been sounding a death knell for the book industry for nearly as long as I’ve personally been aware that there is a book industry (as a child I believed that the public library was a sort of book nursery, and the librarians the super-bitchy midwifes who brought them into the world).
After college, when I took a job as an editorial assistant at a big publishing house, it was clear that, like any other business, publishing’s a numbers game. And when the numbers are bad, the job’s a real bitch. “Drive one to drink” might be a shlocky idiom, but some jobs do just that. There’s nothing like working in an industry that’s convinced of its own imminent financial demise, and the assured lack of job security kept us assistants drinking hard after work and on the weekends. But even during a late night industry conversation between extraordinarily low-level (and incredibly intoxicated) publishing coffee-fetchers, nothing so bold as (gasp) a profit-sharing deal replacing book advances was ever broached.
That a major house is doing just that could be a very good sign that change is indeed possible in an industry whose recent “innovations” include the Kindle (Mom, can I borrow 400 bucks?). Word of the experimental business model came in the New York Times over the weekend, but Motoko Rich's article left me with some serious questions about the venture.
What are we to make of the profit-sharing experiment that HarperCollins will attempt under the direction of Hyperion founder Robert S. Miller? On the one hand, Harper gets a big high five for having the balls to try something different. But before we go and glad-hand big publishing too much, we shouldn’t kid ourselves that this is any attempt to democratize literature through new media; to create a co-op model for a generation of eco- and fair-trade-conscious consumers; or that Harper would be venturing into this territory if there were a more significant financial risk for the publisher than there is for the author.
The basic plan is this: Instead of paying authors an advance and agreeing to pay them royalties, the author will share a 50/50 split of profits with publishers. At face value, that doesn’t seem like such a terrible thing, especially because many authors don’t ever earn out their advances and, as such, do not receive royalties (often 15% of profits after the book has earned more than was paid to the author as an advance). Harper is beginning small, and will wade very slowly into this little experiment (they’re calling it a “studio” and not an imprint – Eh?) with a list of approximately 25 titles a year.
I’m pretty skeptical of the plan for many reasons that don’t involve the demonizing of giant media companies (in this case, HarperCollins, which is owned by Rupert Murdoch's News Corporation).
#1) What’s an advance for anyway?
An advance against royalties used to be paid the author before delivery of a manuscript so that the author would have the time and resources necessary to finish the book. Currently, the advance is paid out in a few (often three) increments, with one payment typically coming when the contract is signed; another when the author delivers the completed manuscript to the publisher; and the final payment coming when the book is published.
Now, we no longer live in an age of vocational, I'm-just-a-writer writers (note: you could probably argue that we never really did), where one just wrote and published and spoke as a guest lecturer from time to time, and ate cheese cubes and drank little plastic cups of wine after readings at university campuses. Nowadays (unless you’re a Clancy, King, Steele or a Dan Brown) pretty much everybody has a teaching gig somewhere. At Harper’s new “studio,” it seems the leg-work of writing a book and going through the laborious editing process will be done up front, with a financial reward to come (maybe) later, assuming the book sells. In short, the author assumes more of the risk and gets stiffed on all the fun of up-front validation and reward. I guess you could still go out drinking when you and your agent sign the contract, but without a big, fat check with which to buy all your schlubby writer friends drinks, where’s the fun?
#2) New Media?
Harper’s experiment puts an emphasis on new media; that is, typically digital methods for delivering content. Most often, this refers to electronic editions that can be produced cheaply and distributed easily and quickly. The problem, of course, is that I can’t think of a single person who would rather have the e-text of a book (either on their own computer, laptop or Kindle) than a physical copy. It’s one thing to read a 1, 400-word piece on the NYT website and quite another to sit down with a 60,000-word novel in digital form. I’m sure some folks might prefer digital text, but those are probably also the people who own talking coffee pots and who blow their paychecks at Hammacher Schlemmer. If HarperCollins can drum up a viable and reliable “new media” market, then God bless ‘em, but I won’t hold my breath.
#3) Physicality (addendum to reason #2).
I had a teacher in high school who was a bit of a turd and who often spouted the true-if-trite idiom: “reading is its own reward.” Fair enough. But owning a book is also a nice thing, and I’d rather own a paper-and-boards book than a PDF. If I’m going to invest time, money and intellectual energy into a book, I still want to own the traditional, physical object. Issues of negative vs. positive ions and potentially carcinogenic batteries aside, there’s just something about holding a book that can’t be replicated on a screen. I’ll concede that this is perhaps a generational preference and that, years from now, cool kids will carry their fifth generation Kindles in their back pockets while smoking their non-carcinogenic Camel Lights. But again, I’m not holding my breath.
#4) “We’ll Only Make Money if You Do.”
Writing a book is a lot of work. I mean, I’d imagine it’s a lot of work. I’ve never done it. Publishing is work, too, but when you’re a big house like HarperCollins and you have multiple revenue streams and can afford to sink a little money into a profit-sharing venture like this one, my knee-jerk reaction is to fear for the interests of the authors. Let’s say HarperCollins buys your book, puts the money into the packaging, marketing and publicity and then the book makes $10,000 in profits. A 50/50 split sends 5,000 to the author (less that pesky agent’s fee), and 5,000 to Harper.
From the publisher’s perspective, that won’t cover the cost of the labor put into the publishing of the book. But who cares? They have other fish (books that is) in the sea. In big publishing, it’s nothing new under the sun for a book not to sell well. The change, in this case, would be that their initial investment in the author would be significantly less. Had they paid even a small advance up front, they’d likely be out more cash than they would be under this kind of profit sharing. That’s smart on their part, but I sure wouldn’t want to be the author who poured his heart and soul into the creation of a novel (even a really good one, see reason #5) only to get the short end of the financial stick.
#5) Some of my favorite writers don’t sell particularly well.
What of the Kevin Cantys? What of the Alice Munros? If good writers aren’t getting good enough money to continue to write good books, what will the publishing world look like in a few years? If publishers hedge their bets and tighten their belts too much, will we see fewer good books on the shelves in the years to come? Will we see fewer risky or innovative novels? Symbolically and financially, HarperCollins’s 25-book-a-year experiment may be a just another symptom of the publishing industry’s contemporary trepidation and not the bold innovation in profit sharing and new media that HarperCollins wants it to be.
The final trite idiom of this post? Only time will tell.
After college, when I took a job as an editorial assistant at a big publishing house, it was clear that, like any other business, publishing’s a numbers game. And when the numbers are bad, the job’s a real bitch. “Drive one to drink” might be a shlocky idiom, but some jobs do just that. There’s nothing like working in an industry that’s convinced of its own imminent financial demise, and the assured lack of job security kept us assistants drinking hard after work and on the weekends. But even during a late night industry conversation between extraordinarily low-level (and incredibly intoxicated) publishing coffee-fetchers, nothing so bold as (gasp) a profit-sharing deal replacing book advances was ever broached.
That a major house is doing just that could be a very good sign that change is indeed possible in an industry whose recent “innovations” include the Kindle (Mom, can I borrow 400 bucks?). Word of the experimental business model came in the New York Times over the weekend, but Motoko Rich's article left me with some serious questions about the venture.
The amazingly sleek machine that will revolutionize the way we read!
What are we to make of the profit-sharing experiment that HarperCollins will attempt under the direction of Hyperion founder Robert S. Miller? On the one hand, Harper gets a big high five for having the balls to try something different. But before we go and glad-hand big publishing too much, we shouldn’t kid ourselves that this is any attempt to democratize literature through new media; to create a co-op model for a generation of eco- and fair-trade-conscious consumers; or that Harper would be venturing into this territory if there were a more significant financial risk for the publisher than there is for the author.
The basic plan is this: Instead of paying authors an advance and agreeing to pay them royalties, the author will share a 50/50 split of profits with publishers. At face value, that doesn’t seem like such a terrible thing, especially because many authors don’t ever earn out their advances and, as such, do not receive royalties (often 15% of profits after the book has earned more than was paid to the author as an advance). Harper is beginning small, and will wade very slowly into this little experiment (they’re calling it a “studio” and not an imprint – Eh?) with a list of approximately 25 titles a year.
I’m pretty skeptical of the plan for many reasons that don’t involve the demonizing of giant media companies (in this case, HarperCollins, which is owned by Rupert Murdoch's News Corporation).
#1) What’s an advance for anyway?
An advance against royalties used to be paid the author before delivery of a manuscript so that the author would have the time and resources necessary to finish the book. Currently, the advance is paid out in a few (often three) increments, with one payment typically coming when the contract is signed; another when the author delivers the completed manuscript to the publisher; and the final payment coming when the book is published.
Now, we no longer live in an age of vocational, I'm-just-a-writer writers (note: you could probably argue that we never really did), where one just wrote and published and spoke as a guest lecturer from time to time, and ate cheese cubes and drank little plastic cups of wine after readings at university campuses. Nowadays (unless you’re a Clancy, King, Steele or a Dan Brown) pretty much everybody has a teaching gig somewhere. At Harper’s new “studio,” it seems the leg-work of writing a book and going through the laborious editing process will be done up front, with a financial reward to come (maybe) later, assuming the book sells. In short, the author assumes more of the risk and gets stiffed on all the fun of up-front validation and reward. I guess you could still go out drinking when you and your agent sign the contract, but without a big, fat check with which to buy all your schlubby writer friends drinks, where’s the fun?
#2) New Media?
Harper’s experiment puts an emphasis on new media; that is, typically digital methods for delivering content. Most often, this refers to electronic editions that can be produced cheaply and distributed easily and quickly. The problem, of course, is that I can’t think of a single person who would rather have the e-text of a book (either on their own computer, laptop or Kindle) than a physical copy. It’s one thing to read a 1, 400-word piece on the NYT website and quite another to sit down with a 60,000-word novel in digital form. I’m sure some folks might prefer digital text, but those are probably also the people who own talking coffee pots and who blow their paychecks at Hammacher Schlemmer. If HarperCollins can drum up a viable and reliable “new media” market, then God bless ‘em, but I won’t hold my breath.
#3) Physicality (addendum to reason #2).
I had a teacher in high school who was a bit of a turd and who often spouted the true-if-trite idiom: “reading is its own reward.” Fair enough. But owning a book is also a nice thing, and I’d rather own a paper-and-boards book than a PDF. If I’m going to invest time, money and intellectual energy into a book, I still want to own the traditional, physical object. Issues of negative vs. positive ions and potentially carcinogenic batteries aside, there’s just something about holding a book that can’t be replicated on a screen. I’ll concede that this is perhaps a generational preference and that, years from now, cool kids will carry their fifth generation Kindles in their back pockets while smoking their non-carcinogenic Camel Lights. But again, I’m not holding my breath.
#4) “We’ll Only Make Money if You Do.”
Writing a book is a lot of work. I mean, I’d imagine it’s a lot of work. I’ve never done it. Publishing is work, too, but when you’re a big house like HarperCollins and you have multiple revenue streams and can afford to sink a little money into a profit-sharing venture like this one, my knee-jerk reaction is to fear for the interests of the authors. Let’s say HarperCollins buys your book, puts the money into the packaging, marketing and publicity and then the book makes $10,000 in profits. A 50/50 split sends 5,000 to the author (less that pesky agent’s fee), and 5,000 to Harper.
From the publisher’s perspective, that won’t cover the cost of the labor put into the publishing of the book. But who cares? They have other fish (books that is) in the sea. In big publishing, it’s nothing new under the sun for a book not to sell well. The change, in this case, would be that their initial investment in the author would be significantly less. Had they paid even a small advance up front, they’d likely be out more cash than they would be under this kind of profit sharing. That’s smart on their part, but I sure wouldn’t want to be the author who poured his heart and soul into the creation of a novel (even a really good one, see reason #5) only to get the short end of the financial stick.
#5) Some of my favorite writers don’t sell particularly well.
What of the Kevin Cantys? What of the Alice Munros? If good writers aren’t getting good enough money to continue to write good books, what will the publishing world look like in a few years? If publishers hedge their bets and tighten their belts too much, will we see fewer good books on the shelves in the years to come? Will we see fewer risky or innovative novels? Symbolically and financially, HarperCollins’s 25-book-a-year experiment may be a just another symptom of the publishing industry’s contemporary trepidation and not the bold innovation in profit sharing and new media that HarperCollins wants it to be.
The final trite idiom of this post? Only time will tell.
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