When is the aim too high?

[Dana King]

BR Stateham has posted an interesting blog entry, wondering how much agents should be held accountable for the current plight of the publishing industry, because of their insistence on high advances. Here's a question to discuss the flip side of his hypothesis.

What about an agent who the author thinks is shooting too high? An agent who only approaches big New York houses--even in the face of a full round of rejections--and is not interested in looking at smaller publishers where the author might have a better chance of getting a toehold and building some readership.

True, the agent can't make any money on 15% of what a smaller house will pay. At what point do the agent's interests diverge from the author's, if building a career is the goal?

[John McFetridge]

Each individual publisher only has so much money to hand out, but there are many, many publishers.

I'm a big believer in the small presses. I'm still published by the small press in Canada that published my first novel. There was certainly no six or seven figure advance (there was a mid-four figure advance) but they really liked my books and I really like them. I had no agent and only recently got an agent because I'm now published in the US and it is sort of a foreign country to me ;).

But there are some excellent small presses in the US. Probably even more will start up now as the technology is making it cheaper to print books.

And also, as big publishers lay off quality people, some of them may start up small presses - it's happened before and it's happened in other industries.

[I. J. Parker]

Yes, I think you're quite right about that. I have a novel I like very much. My agent doesn't, and the book has lingered in her hands for a year now. Mind you, times are bad and it may be that she's waiting to see if my next in the series does well before letting the other book make the rounds. But clearly, she's worked only with the big publishers, and I'd just as soon have the novel published by a small house. Actually, sometimes, I just wish for someone who treats me a tad better and with some small amount of appreciation.

[Joe Barone]

I don't know anything about all this, but why should the book industry expect to he immune from what is happening to everybody else? Or from the sometimes unrestrained greed that went before the fall?

[Sandra Ruttan]

I don't blame agents.

Simply, the problem is greed, across the board. Now, you might say, "But aren't agents who push for high advances just being greedy?" Maybe, but the reasons I'll defend them speak to other problems within the industry. We're commonly told not to expect to make a cent beyond your advance. Reserves against returns are often unspecified amounts, and it can take years for you to ever see that money, if you ever do.

Publishers want to pay authors as little as possible so that they can maximize their profits. Agents fight to make sure authors are treated fairly. In essence, an agent is the closest thing you'll have to a union rep, and even then, agents don't have limitless power. In actuality, agents have to be careful about what they push for and how hard, because it could damage their long-term relationship with a publisher/editor. And if they're known for being difficult and demanding too many concessions for authors who don't deliver, publishers may not as readily sign their authors in the future. There are some agents who routinely work with the same editors - it's a business built on relationships and you have to be something of a peacemaker in order to negotiate contracts and not end up with two sides ticked off with you.

If I really believed I'd get a statement a year after publication for all the books sold in the first, say 9 months, and get paid my royalty for those books, I'd feel differently about advances, but the reality is that I've talked to a lot of authors who've actually been nominated for and won awards, received a lot of critical reviews in newspapers, been poised to sell well, and who haven't outearned small four-figure advances in four years. At least, haven't outearned the 'reserves against returns' that the publishers hold on to. Meanwhile, most of us are paying to do book signings, paying for advertisements, shipping out our own review copies. I can write off every cent of my advance on the two books I had published last year. Of course I'd be happier if I actually earned some money for my time investment and work, and agents are there to try to make sure you do.

It's the less common unjustified deals for six or seven figures that's the problem. I've seen reports that Sarah Palin's been offered $10 million for a book deal. I wonder what the appeal will be when she can't wink through the pages, and is confused by what's a continent, but maybe they're going for comedy. There's a lot of guilt to go around before we start generally blaming all agents.

[I. J. Parker]

Absolutely correct -- every word of it. And keep in mind that publishers shell out big money to non-writers like Palin or assorted movie stars, athletes, and notorious characters.

[B.R.Stateham]

Kerone,

A well-reasoned reply. But consider; How much was Stephan King's last deal worth? How much money did he get up front. J.K. Rowling last year earned $300 million thru all the avenues offered to her. The next leading income maker for an author was (and this may be wrong) James Patterson--and he only made about $50 million.

True--not all the money earned came from a publishing house. But the money earned by the agent representing Rowling came from that one author. What's 15% (the agent's usual cut) of 300 million?

Add up the income Patterson, King, Rowling, and the other top 20 authors get and the amount is staggering. So staggering in fact it leaves little for the rest of us. And this is the problem I am alluding to. It doesn't matter who is at fault. What matters is that someone has got to get a handle on this or there won't be much of a selection to find in any genre because only a handful of writers will be writing.

[Karen Dionne]

Ah, but Patterson and King and Rowling EARN the money that publishers pay them. Their sales numbers are incredible. Talking just royalties and not earnings from film sales or product tie-ins, in spite of what they're paying out, the publisher is still collecting a profit on these authors' work. Profits that they use in turn to purchase other authors' work. The agent's percentage has nothing to do with it - that comes out of the author's share, and not the publisher's.

Certainly there are instances where publishers pay a lot of money for a book and take a loss, and this loss in turn gets spread all across the industry, but the authors you've chosen to single out as examples are not the problem.

As for saving the genre, buy MY book! Buy Sandra's! Buy L.J.'s! That's what will help keep us little fish writers writing. :)

.

[Eric Christopherson]

According to a Harvard Business School professor, the current blockbuster mentality isn't going to change. Any publishers who stopped paying the big advances--whether to John Grisham or to celebs like Sarah Palin--would get shunned by agents at least in regard to their best projects, and editors know careers are made by developing a blockbuster, so they have personal stakes in supporting the current strategy. There are several other reasons listed by the professor, including that most book consumers prefer to read blockbusters and prefer being told what to read. Here's a link to the article:

http://online.wsj.com/article/SB123093737793850127.html

One thing the professor takes for granted is the assumption that companies will continue to try to maximize profits. I suppose this is a good assumption so long as conglomerate ownership remains in place. There was a time not too long ago before the conglomerates bought up the industry that the blockbuster mentality wasn't so prevalent, when a normal profit was okay.

[B.R.Stateham]

How long does it take a publisher to recoup the monies spent in taking in a King or Patterson? And how do the dynamics of this issue change when there is a major downturn in the economy? Giant publishing conglomerates don't make a huge profit margin--or at least, that's my assumption. So recouping the huge bonuses signed by big-name authors are draining publishers dry. Something is going to come crashing down pretty soon--either no more conglomerate publishing houses--or no more gigantic bonuses.

It can't remain the same.

[John McFetridge]

Those profit margins are really the key here. When publishing companies were run by the guys who owned them, when alfred A. Knopf ran Knopf, publishing operated at about a 3-5% profit margin.

When big, multi-national "media" companies bought them, they demanded 10% profit margins. This meant cutting costs, taking fewer chances and trying to sell many more copies of fewer titles.

But it still hasn't really worked. It looks like books just don't produce those high profit margins. Hey, maybe the people who were running the publishers all along were doing a better job than the MBAs thought they were.

So now places like Houghton-Miflin Harcourt (my old publisher) are looking to get rid of their fiction line and concentrate only in textbooks. Left me out in the cold, but in the long run it will be better for writers because, I think, publishing will return to a more local business run by people who love books and can live with a 3-5% profit margin.

I have no idea how it will affect the blockbuster bestsellers. For some reason I never even think of those books when I think of the book business.

[Sandra Ruttan]

In Canada (or perhaps I can say at least in Calgary), the major bookstore chain separates 'mystery' from 'fiction/literature' and it's in the latter section that you'll find most thrillers - Lee Child, Tess Gerritsen, MJ Rose, etc. In that section, there's also a specially marked section titled 'James Patterson'. And it's multiple shelves filled with titles by James Patterson.

It's indicative of selling power. It isn't an end cap that the publisher has bought, it isn't a special display. It's part of the regular shelving section.

I don't think economic downturn affects those blockbuster books as much as it does other titles, and I also expect that publishers (usually) see returns on their investments in big-name authors much sooner than returns on other authors. There are many reasons I would suspect this is the case. For one, big-name authors are already big names. Viral marketing will work to sell new titles by Stephen King, JK Rowling, Stephanie Meyer, etc quickly, and because publishers can expect titles by such authors to move quickly, they're more likely to invest in special display space. All those table displays and end cap displays, and the cardboard cutouts that I can never remember the name of, that are at the front of the bookstore are all paid for, and time and time and time again the publishers invest in already-known authors. They're betting on a sure thing.

From a purchasing standpoint, if a reader has to consider their budget more carefully when purchasing books, they're more likely to spend money on an author they've enjoyed in the past than to take a risk on someone new. This may not be true all the time, but you'll hear comments like, "It takes 8 books to grow a series", for example, and that's often true. Building up a track record enables the authors to build a readership and that builds sales. If you're a newer author who isn't as well known you're going to have a harder time getting publisher investment in promotion, and getting readers to know who you are.

Another factor: Borders has been in financial trouble for a while. In their restructuring, some of the jobs eliminated included those who handle purchasing for stores. Unless you're a known name or have a lot of push behind you, it's very hard to get stocked by Borders now. I've lost count of the number of people who've told me they couldn't find me in Borders. (I know the books have been stocked in some stores, but none that I've seen myself, and we have a Borders here where I live.) Borders has adopted a clearly conservative strategy, bringing in the names like Stephen King and Lee Child etc. that sell, but most new titles I've been looking for haven't been stocked, because I'm not reading 'blockbuster' bestsellers.

That type of conservative stocking strategy has an impact on publishers, who are then less likely to sign unknowns or invest in publishing lesser-known authors, because they may have more difficulty getting stock in stores.

[I. J. Parker]

Ah, is it eight now? I used to think five. Then my agent said seven. Good. Seven are written and I'm half done with number eight.

Borders is the outfit that recently was found to over-order copies and return them immediately for the money. In other words, they did not plan to sell the books. Don't ask me how that helped their financial situation, but it certainly angered publishers and authors.

In general, stores return books much too quickly. Publishers should insist that no order be returned until 60 days after it arrived. And customers like Borders need to be restricted after pulling this sort of thing.