There are sacred cows in publishing. Lots and lots of sacred cows. You have the “smell of books” people. You have “the publishing business model ain’t broke” people. And you have the “advances are divine rights” people. Suggest that advances are not written-in-stone obligations on the part of publishers and you’re considered naive. Ill-informed. Nutso.
HarperCollins has proposed a radical shift in the business.
Yeah, well, I was accused of all that and more when I suggested that publishers, if they could, stop paying advances to authors. The genesis of my speculation came on the heels ofGuy Hands, the new head of EMI’s musing that one way to cut costs for the company was to cut advances or at least be more selective about what money is being paid. Seems to me that it’s a no-brainer to think that publishers might think that way, too.
While you can argue this way and that about how publishing houses make money (or don’t), the facts are that publishers are upside-down on a book until a few months (or a lot of few months) after it’s published. Naturally, there is the advance paid to the author, the overhead dedicated to getting the book to print, the actual printing/shipping/marketing/etcetera costs. Until retailers send nice little checks — and actual returns! — publishers don’t make money on your individual title.
(This is where someone out there grumbles that while this is factually correct, there’s all this other money flowing in and out that makes the individual loss not so painful. As you all know, all that flowing money doesn’t impact the issuance of your royalty statement, so it doesn’t impact you.)
In what is surely the biggest news to hit publishing since, I’d venture, Gutenberg, the Wall Street Journal breaks the news of a new venture at HarperCollins. Publishing veteran Robert Miller will head a new unit. The new unit will be doing business in new ways and trying, trying, trying to push publishing in to this century. Here are a few key points, as outlined in the WSJ piece:
- No advances to authors. Instead, authors will engage in a sort of profit sharing.
- No returns — this is more of a dream ticket item than a reality, but returns are expensive and if you don’t try, you never know what you’re going to get.
- No wasting money on “prime” store placement. I applaud this as co-op type expenses are driving up costs to consumers.
I’m guessing that three or four of you felt your heart stop beating at point one, got all excited by point two, and unless you’re working for a publisher, shrugged and figured point three doesn’t apply. And depending on how costs are calculated in this new profit sharing scheme, maybe it will, maybe it won’t. Experience suggests that there were will be various calculations of “profit” as this idea matures.
And by profit, I am saying “bigger royalty”. I’ve seen speculation that the author’s share would be as high as 50%. Of course, the question is “Fifty percent of what?” Yeah, I asked it so you don’t have to. The devil is indeed in the details, and I’d guess the details are still being carefully considered. It’s enough that HC made this big bombshell announcement — having all the i’s dotted and t’s cross can wait.
While one goal of this new scheme is to reduce unrecoupable advances (I have to say that typing this article feels an awful lot like working at my former job!) while maximizing cash flow, Miller has one other idea:
Mr. Miller said that many authors who currently receive large advances won’t be interested in the new model. However, he thinks he will attract major authors who have a book in the desk drawer that doesn’t fit their image, as well as up-and-coming writers.
I think it will be a long time before an effective “no returns” policy can be implemented. After all, how do you get everyone past the gloating “1,000,000 units shipped” announcements? That’s gonna take some serious weening. If HC can pull this off, it will restore my faith in humanity. In a low-margin business, it just makes sense for everybody. And now that printing presses are moving ever-closer to true on-demand printing, the crazy process of overprinting in anticipation of theoretical demand can end.
Finally, we have the co-op. How crazy is it that publishers have to pay for decent placement in stores? Everyone’s paying, everyone’s shoving other houses aside. There is a wild idea out there that it’s in the interest of the bookstore to give certain books — individual titles, themed displays, certain authors — premium placement.
That being said, it’s also going to be a tough change for this new imprint. They’re helping themselves by concentrating more on Internet sales that retail outlets.
Now I like this plan, but I know a lot of people are going to hate it. I don’t think it will end up in the same place it starts. These are radical notions. But if the money for the authors makes foregoing the advance worthwhile, it might just work.