The New 800-Pound Gorilla in the Room

Authors Equity

A New Model for Publishing?

As of late, everyone is talking about Authors Equity, a seemingly new model for writers to bring their work to market. For the finer details, read this. And possibly, this also. In a nutshell, this new outfit looks to publish authors with no advance on royalties, but larger profit sharing on the back end as books actually sell.

Per the New York Times, this new start-up is promising authors the “lion’s share” of the profits.

And this from the Wall Street Journal. Sorry, that’s the best link I could find.

Is This Really So New?

Not hardly. Comics publishing has always worked this way. The various houses—Dark Horse, DC, Image, Marvel—often don’t pay the author in advance of sales for original work. The production costs for the illustrator, the letterer, the colorist, the printing and distribution, these costs must all be paid before the writer/creator sees a penny. The author might be promised 85 percent of the profits, but once fixed costs and publicity are paid out, well, the book better sell damn well. That’s the only way the creator sees any income.

Also, in prose publishing the writer generally uses a literary agent. The standard commission to said agent is fifteen percent. In comics the author generally pays an entertainment lawyer a one-time fee to review the contract—with no on-going commission to be paid from royalties. Will writers who work with Authors Equity use agents or not?

What About Distribution?

Authors Equity will use Simon & Schuster to get books into stores. Comics publishers typically use Diamond Comics Distributors. Dark Horse also uses Penguin Random House, thanks to the mystery writer Janet Evanovich, who demanded her graphic novels be distributed through her prose publisher.

What No One Has Mentioned

The biggest hurdle is publicity. Does Authors Equity handle promotion in-house? Traditionally, promo is a big reason for courting a traditional publisher. As per the link above, it was the star-making machinery of consolidated Big Publishing that made the huge writing careers of name-brand writers. In the latter link, the author makes an interesting point:

Stephen King tried to get around this by publishing under the pseudonym Richard Bachman in the early 1980s, to see if people were just buying his books because of the brand name or because the books were good. And Bachman’s books didn’t sell. This was super depressing to King. Then, in the second half the 1980s, you see him writing a series of books—Misery, The Tommyknockers—that feature a creative figure in some sort of conflict or struggle with commercialization.

Also Left Unmentioned Is the Dreaded Inventory Tax

In short, all copies of a book are taxable until they sell. So publishers pay that tax on outstanding inventory. In comics publishing, the tax is passed along to the author/creator. In prose publishing, the tax makes it more likely that the book will be reprinted in very small numbers—if at all. Or, that the book will go out of print unless it sells quickly, in sizable numbers. Until the late seventies, publishers could keep slow selling mid-list books in their line-up, but after the Supreme Court ruled on Thor Power Tool Co. v. Commissioner, publishers had to pay the full tax rate on unsold inventory. This from Wikipedia:

The Thor decision caused publishers and booksellers to be much quicker to destroy stocks of poorly selling books in order to realize a taxable loss. These books would previously have been kept in stock but written down to reflect the fact that not all of them were expected to sell.

And there’s this:

Since Thor Power Tool Company v. Commissioner of Internal Revenue, books in the United States have been remaindered much earlier and in greater quantities than prior to the 1979 decision. Since then, the number of unsold books that have simply been destroyed (by being trashed, burned, or recycled) instead of being sold at a large reduction has also risen greatly.

So, in this brave new world, my guess is that the author will be paying the tax on standing inventory. Another ding against take-home income.

An Aside

It’s my understanding that publishers once owned their own retail outlets. In the way that movie studios had vertical integration—20th Century-Fox owned and released first-run films to Fox Theaters, Paramount to its own chain, etc.—you could buy books from Doubleday or Random House stores. Antitrust action forced both publishers and studios to divest themselves of their outlets. For a time Barnes & Noble published its own line of books, but that endeavor seems to have disappeared also.

In the brave new world of Ebooks, publishers were able to continually sell books to readers who had yet to read the books they already owned. With Ebooks, there was no nagging pile-up of books on the bedside table. But times change, and no trick works forever. From Statista:

In 2021, e-book revenue in the United States reached 1.1 billion U.S. dollars, the same as the figure recorded in the previous year, suggesting a halt in growth.

In my experience, Ebooks never caught on in Europe. The market where they still seem popular is China. Still, with Ebooks there’s no unsold inventory to tax.

Another Aside

In recent memory, print-on-demand books looked like the future. This trend looked so promising that the Borders chain had designed a smaller brand of store, wherein only bestsellers would line the few shelves. Each store’s centerpiece would be a printing/binding machine that would create books on-demand. Readers could specify their own cover. Readers could create their own personalized libraries of favorite books in matched, curated designs. That would’ve added a sense of ownership to such personalized books. Hot off the press, literally.

All of your books would look like you’d custom bound them because, in a way, you had. Catnip for the completionist.

Until a few years ago the McNally Jackson booksellers featured in-house, print-on-demand books. However, the machines took up a huge footprint. They gave off more heat than a pizza oven. And printing/binding a book took about twenty minutes. Few hardcore readers wanted to stand around for that long, in that heat.

Another Thing You Don’t Want to Hear

While you cling to the notion that merit decides everything … Early in my career I had lunch with some publishing big wigs. The Harry Potter wave was cresting, and J.K. Rowling owned multiple slots on the New York Times bestseller list. It was a marvel to watch, but then a lunchmate said, “Harry Potter is popular because Roald Dahl died.” This “insider” explained that when Dahl died in 1990, the publishing world had sought out a successor. Everything had been very calculated.

My lunchmate’s version of this seemed a given. I was the only person at the table who didn’t already know this, sigh. And if it’s true, double-sigh.

So What’s Wrong with Ebooks?

What’s wrong with Ebooks is what’s right with Harry Potter books. Grandparents need to give you something. Consider that books are generally a great gift. Easy to wrap. A lovely object. Something that can be inscribed to add value, either by the author or by the gift-giver. On the other hand, Ebooks are becoming the new gift card: Who wants to give/receive something so impersonal.

Per Seth Godin, the book is a “souvenir.” Of your grandparents’ love. Of meeting the author. As Godin puts it in his column. More specifically in the sequel:¹

Understand that a non-fiction book is a souvenir, just a vessel for the ideas themselves. You don’t want the ideas to get stuck in the book … you want them to spread. Which means that you shouldn’t hoard the idea! The more you give away, the better you will do.

I’d argue that the same goes for fiction. You want a physical way to revisit your vacation/adventure/fictional friends.

Another Aside

This aside underscores the value of books as physical objects. Kinda. For a long time, The Strand Book Store in Manhattan has offered a unique service. Customers can order specific linear feet of certain books. For example, an interior decorator needs to fill the shelves of a newly built mansion. The mansion’s owner reads only biographies. The room in question is primarily yellow in color. So, the decorator contacts The Strand to request four hundred linear feet of biographies, all bound in various shades of yellow leather. An associate at the book store goes to the warehouse—they have at least one vast warehouse—and hand picks that many feet of those specific books. Of course this is a rich person’s niche, such a person likely owns multiple houses, each needing many linear feet of yellow-leather biographies. What’s important is: They pay. Such buyers help keep The Strand running. And—most importantly—no decorator is ever going to call and say, “We need five hundred linear feet of Ebooks, pronto!”

Such buyers are a big profit engine for The Strand.

Besides, what’s the point of reading Camus if no one can tell you’re reading Camus. The book as a self-badging device … and a status object can never be underestimated. No one cares if an Ebook version of Rubáiyát of Omar Khayyám goes to the bottom of the ocean aboard the Titanic, but a jewel-encrusted edition …

Which Leaves Us Where, Exactly?

The tech will change. The business will change. You may or may not ever get paid. But no such change is forever. And if you’re writing for any reason other than that you love to write, you’re chasing a phantom.

Pretty much everything except your story is beyond your control.

Give it up.

P.S. I love how the latest marketing for Disney parks features the term “create core memories.” In the eighties, everyone harped about having “peak experiences.” Now they’re chasing “core memories.” Plus “core memory” is a term spun off another Disney/Pixar product. Where does the marketing end?

Big double-sigh.

1. Thanks Kyle!