I have said previously on this blog that I do not begrudge the money I pay each month for my Publishers Marketplace (PM) subscription. I joined PM when I was getting serious about my agent search. My intention was to drop the subscription after a couple of months. Here it is, five years later, and I'm still subscribing. It's a great resource for writers.
Last month the Digital Book World Conference was held at the Sheraton New York Hotel & Towers over January 26 and 27. Publishers Marketplace co-sponsored the conference through their weekday newsletter Publishers Lunch. And now PM has posted videos of five panels from the conference, which they offer exclusively to their members.
Tonight, I watched the panel titled "Digital Book World: Back-Loaded Book Deals: No (and Low) Advance Contracts, Profit-Sharing and Other Innovative Business Models."
Yeah, I know, quite a title, isn't it?
Lorraine Shanley moderated the panel, which featured two publishers and two agents:
- Roger Cooper, Publisher of Perseus' Vanguard Press
- Mary Ann Naples, Co-founder of The Creative Culture Literary Agency
- Ira Silverberg, Literary agent with Sterling Lord
- Robert Miller, Publisher of the HarperStudio imprint
The panel began with the two publishers describing their non-traditional publishing imprints. Robert Miller started by discussing the attributes of HarperStudio:
- Miller wanted to move away from the traditional high advance and returns system, both of which have plagued the publishing industry. His maximum advance is only $100,000. The model calls for all direct costs (agreed upon by the publisher, agent and author) subtracted from the P&L. After those costs are covered, the author and publisher split the profit 50/50.
- The model works because HarperStudio has lowered overhead and, therefore, lowered risk. The imprint publishes two books a month (16 so far) and has already had two New York Times best-sellers.
- The big box stores refused to move to a "no returns" policy, and the independent bookstores were terrified of assuming the risk. Therefore, HarperStudio offers booksellers a choice: the traditional returnable model or a different non-returnable rate. Miller says "several large accounts" are experimenting with the non-returnable model.
Roger Cooper said that his Vanguard Press, which published its first book in the spring of 2007, has some similarities with HarperStudio:
- The imprint also publishes two books a month
- Vanguard also operates on a smaller scale with a lean staff
- However, Vanguard does not offer ANY advances. Instead they offer a very high royalty model with royalties "far higher than the industry standard."
- Vanguard also guarantees a "substantial marketing budget" in the contract
- There are only three people on the "inside" of Vanguard (publisher, associate publisher and publishing manager). They hire all other talent (editing, PR, marketing and art) from "outside" Vanguard
- Since they pay no advance, 90 days after the date of initial publishing, they begin paying monthly royalties
The first agent, Naples, said that innovative new models appealed to authors who were "disillusioned" by the traditional model of publishing. Non-traditional models are of particular interest to authors who have power and a platform.
When asked about the place of agents in these new models, Naples said that agents are able to help authors build brands and position themselves in the market.
The other agent, Silverberg, said that the e-book model is changing everything in publishing. He believes the infrastructure that was in place in publishing five years ago no longer exists. Newspapers no longer carry book pages, independent bookstores are dying and readers are buying online. Agents must invest in helping authors build a presence.
He said that the no-advance model and self-publishing model help authors at the top and at the bottom, but authors in the middle are not as able to benefit from either model.
Both publishers talked about the collaborative nature of the new models. Miller repeatedly made the point that the publisher, agent and author are now partners in making decision on what to spend money on and in discussing the P&L.
Cooper spoke again and again of the need for "transparency" between publisher and author. Under the traditional model, publishers tended to regard information as proprietary. The publishing house would pay the author an advance and, in effect, tell him to "go away." The newer models make financial partners of the author.
During the question/answer period, someone asked how publishers handle books that are printed but unsold. Miller laughed and said, "anything that costs money is charged to the profit share arrangement."
When asked if there were any types of books that are not suitable for this new model, both publishers agreed that elaborately illustrated books, which cost a great deal to publish, would not be something they'd be interested in. And, of course, because both only publish two books a month, they are very selective.