Tuesday, March 20, 2012

The Future of Publishing – Part II

April 3, 2011

This weekend I attended yet another writers conference. While I learned things I can use and enjoyed the camaraderie of the faculty and writers there, something I found there surprised me: Some of the literary agents had already determined how to respond to the vast sea change now beginning. A few, to be sure, are still perplexed or totally lost. But a surprising few have decided to charge for extra services they deem important as we move to a world where the new role of literary agents has still to be determined. For example, one agent now offers to assist writers in exploiting social media to promote the role of the writer as a brand. Another offers editing services for the manuscript, not just correcting grammatical errors but also providing advance notice on the writer’s “speed bumps” needing correction. It’s a plethora of services. If you are self-publishing, here is the stuff you might need to replace the traditional print publishers and the roles they value-added to your book.

If you are a writer, it’s as if you were an alien landing on this planet, preparing to find humans you have to conquer and instead, you find pre-packaged meat wating for pick-up. Bad metaphor, perhaps, but accurate none the less.

Literary agents will offer you a supermarket’s worth of services to entice you to pay fees. It’s actually very good news for writers. It’s even better for the larger literary agencies still wondering what they should do to prepare themselves for the brave new world. I propose this one: A larger literary agency (ten agents or more) will have to expand to survive. Smaller agencies have no chance of survival and in the end will band together to form a critical mass. Twelve agents is the size to offer robust survival and the larger the better. But that still doesn’t offer a business model. It just states the critical mass for continued synaptic activity. So, assuming the agency you pitch to is big enough to survive and continue serving you as a writer, what should you want, what should you expect them to do? I believe they will need to do two things. First, exploit the beand that is your writing. Without a brand, without reader expectations that each of your books will offer something uniquely “you,” nothing good will happen. Some agents already know how to do this. Agencies that don’t have this skill in their repertoire should acquire an agent who can provide it and find a way to compensate them for it. Second, for those writers whose work they feel deserves to be published, they should offer the writer a path to publication if they cannot make a deal with a traditional publisher. Yes, agents will have to be the “publisher of record” for writers they believe in when they cannot find a traditional publisher to do the heavy lifting. AAR (the Association of Authors Representatives) claims this is a violation of their code of ethic. AAR’s code of ethics was written before the tsunami of change now rolling over publishing. IMHO, it’s no longer relevant. Parts of it are reasonable, but for the survival of the industry, literary agents have no choice but to become publishers. To decline their destiny might leave readers with a sense of having been abandoned. If the print publishers die from their huge fixed asset base of irrelevant-to-the-eBook-world investments (trucks, warehouses, printing presses for creation, storage and transport of paper books), who will replace them? The eBook publishers now in existence are a good start, but they offer little in the way of service that literary agencies provide. And they agencies offer no publishing services and won’t work with the eBook publishers since they don’t offer writers advances. Mexican standoff. Hmmmmnnn.

So, then, what’s they optimal organization for a literary agency and how would their behavior differ from what they now do? The agency would continue trying to sell to traditional publishers. Where they couldn’t sell to a traditional publisher, they would have a bank credit line to provide them with the cash to prepare the author’s manuscript, develop cover art the book needs for publication. They would obtain copyright in the author’s name, obtain an ISBN number, and coach the author on crafting their brand. They would assist in obtaining publicity for the book, and assist in obtaining reviews of the book.

When sales of the book come in from Amazon and other sources, the first revenues would pay the agency back for the services they advanced, including interest on the bank credit line. After that, revenues would be split in a traditional way. Assuming the cover art, editing and other prepublishing costs total about $3,000 for a new eBook, and it takes a total of three months from contract to publishing date for the title to hit the market, the advance would probably not be repaid until the book had been out for about two months. The advance would accrue about five months of bank interest, which is not much. If the book is priced at $2.99 retail with Amazon, the agent and author would receive 70% of the sale, or $2.09. Assuming the $3,000 in prepublication costs plus about $100 of interest expense, it would take about 1,500 unit sales to cover the advance. The agency would keep the advance repayment, and then for subsequent sales, the author would receive their 85%, or about $1.75, and the agent would keep about $0.34 per unit sale.

To be fair, we have to compare this model with the traditional print publishing model. Which one is better on a per unit sale; eBook or hardcover? Since, for traditional publishing of a hardcover book the publisher sends about 15% of the net to the agent and author to split, and the net on a hardcover is usually about $10, on an eBook less than the agency model I’m proposing here would net the agent and the author. Surprised? Well, in the past we’d expect print publishers to provide expertise in publicity and marketing, but no longer. Literary agents often help out these days doing those things. BUT… for the most part, it’s left to the author. In the future, we can expect some of the better literary agents to teach their budding authors a few of the tricks of the trade, as value-added for the agent-author relationship. If you are looking for an agent, be sure to ask them what they’ll provide to improve the relationship and your chances of becoming a commercial success.

Good luck, all my fellow writers!

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