This Business of Publishing
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by Richard Curtis
Category: General Nonfiction
Description: This Business of Publishing has been hailed by literary agent Michael Larsen as "must reading for writers, agents and anyone else who cares about the future of publishing." It reveals the unique perspective of Richard Curtis, former president of the Association of Authors' Representatives. He provides the aspiring author with the benefit of over thirty years of lessons learned in the publishing industry, including: The damage caused to the publishing industry by the archaic practice of selling books on consignment; the changing nature of the wholesale business, and how it affects authors, editors and agents; the way that large corporate mergers of publishing companies have brought about the disenfranchisement of authors and editors; the electronic media revolution and the opportunities it offers; as well as the pitfalls. Curtis talks about the "blockbuster mentality" that currently dominates publisher thinking, leading to increased dependence on a few overpaid authors with big-name market status. This is an engaging and thoroughly readable guidebook to one of the most rapidly changing industries in America. It is an essential reference work for anyone hoping to understand or function in the publishing world.
eBook Publisher: E-Reads, 2004
eBookwise Release Date: July 2004
Available eBook Formats: OEBFF Format (IMP) [279 KB]
Reading time: 172-241 min.
Preface: Then and Now
NEARLY TWO DECADES HAVE PASSED since I began writing about the publishing industry, and, as middle-aged people are wont to do, I recently browsed through my pile of tearsheets and wondered where the time had gone. Nostalgia is a sweet but essentially useless emotion, so, after dabbing the mist from my eyes, I took a harder look at the body of this work and began to ruminate on the changes that have occurred in the industry since 1981.
Our tradition-bound field evolves very slowly, but with the perspective of time, one can see definite trends--some good, some ominous. The advance of the publishing business toward monolithic consolidation continues inexorably, leaving almost no independent companies of large dimension operating today. The result is the emergence of a system for producing literature that might best be likened to dairy farming, with authors forced into the role of domesticated cattle resignedly allowing themselves to be milked to satisfy the thirst of a mass market. That the product will inevitably become homogenized goes without saying. Most distressing is the extension of these conditions to the book distribution system itself.
From my viewpoint, the most significant change in publishing in the last few years has been the tightening of the control exerted by bookstore chains over the creation of literature. Because purchasing decisions are made by a handful of buyers operating out of the chains' central headquarters, the leveraged influence of these buyers over decisions made by consumers, publishers, and, ultimately, writers has become immense. And because such decisions are usually reached by the calculation of the lowest common denominator, the selection process annually becomes more and more bestseller oriented. Aided by computerized sales information, the buyers tend to order in significant quantity only books by authors with proven track records, pushing publishers further and further into frontlist (just published), bottom-line, star-author, hit-book thinking, and putting increasing pressure on authors to truncate their apprenticeships, attempt to write blockbusters every time they sit down at their keyboards, and follow or repeat formulas. As this process evolves, our criteria for evaluating writers have begun to homogenize too, until we are left with only one: Is he or she a winner or a loser?
The winners become richer and the losers poorer. While star authors are now getting multimillion-dollar advances for their books, the starting pay for new authors and for writers working in genre fiction is pretty much what it was ten or fifteen years ago, somewhere between $1,500 and $5,000, and of course, if you adjust those figures for inflation, you will realize that struggling authors are horrendously worse off than they were in the 1960s and 1970s.
Although the rise of bookstore chains has improved the efficiency with which books are marketed to consumers, authors have not been the beneficiaries of profits created by that efficiency. For one thing, the returns problem has become colossal, meaning that while more copies of any given book may be getting into the stores, a higher percentage than ever before is being returned, and, of course, no royalty is paid on returned books. Higher return patterns also cause publishers to fix reserves against returns at higher figures, meaning lower and slower royalties.
For another thing, the bookstore chains, with their growing stranglehold over publishers, are demanding and winning higher discounts, and because authors' royalty rates ride inversely on discount schedules, many authors are waking to discover disappointing, if not shocking, royalty statements even though their books shipped in large quantities. In fact, their royalty statements are disappointing because their books shipped in large quantities!
The level of interest in book discounting expressed by most authors is on a par with their interest in Manichaeism in fourth-century Persia. Although I can't blame them, it must be stated that their apathy is costing them dearly. Book publishing contracts provide for a reduction in royalty rate when the discount offered by the publisher to retail store or wholesale distributor exceeds a certain percentage. In some contracts the royalty is reduced by, say, half a point for every point by which the discount is increased. In others, the royalty is cut in half when the discount reaches a high level.
There is nothing inherently wrong with offering high discounts to induce buyers to order large quantities of merchandise. Nor is there anything wrong with tying authors' royalties to the discount rate. After all, the publisher is receiving less money for each unit sold, and it is only fair to ask the author to share in the reduced profit. Both publisher and author are compensated, however, by the high volume of sales. At least, both should be. In practice, however, authors lose out because most publishing contracts call for the same slashes in royalties today that existed ten or twenty years ago, before deep discounting became commonplace. For instance, your paperback royalty may, by contract, go from 8 percent to 4 percent if your publisher sells your book at a discount higher than 50 percent. In the 1970s, that discount was not given often; today, it is commonly exceeded. Yet, no one has told the authors, and even agents have been slow to realize the significance of the change. Late in 1985, three authors brought suit against Addison-Wesley, claiming that the publisher's interpretation of the discount clause had resulted in the loss of more than $100,000 in royalties. Although the authors were supposed to get a royalty of 15 percent of the list price per copy, the contract called for a drop in royalty to 10 percent of the publisher's net receipts for copies sold at half the list price or less. The publisher invoked that adjusted royalty on a large quantity of copies sold. The case was settled, but it underscored the necessity for authors and agents to recognize, and to build into contracts, the realities of modern book marketing.
Another disturbing development of the last half decade is the adoption by many publishers of an exceedingly restrictive option clause. Until the late 1970s, the option language in the boilerplate of most publishing contracts was fairly weak, giving the publisher little more than the right to see the author's next work before anybody else, and to negotiate in good faith for it. If publisher and author couldn't reach agreement, the author was free to seek a deal with another publisher.
This loose option made it easy for authors to leave their publishers, but with the stakes getting higher and higher, such freedom of movement became an alarming threat to publishers. Their legal counsels therefore started to build a more restrictive language into their option clauses, until today, the tight option is more the rule than the exception. (Paradoxically, the same language that enables a publisher to keep his sheep in the fold makes it harder for him to acquire sheep trying to leave that of his neighbors. He who lives by the option perishes by the option.)
Under the terms of the new option clauses, a publisher is granted a first look at the author's next work, as before, and the right to negotiate with the author. In the event negotiations break down, however, the publisher has the right to match the best offer that the author may secure from other publishers. Now, this is all well and good for the author who seeks only to get the very best price for his book. If, however, he is dissatisfied with his publisher and doesn't want to be published by that firm at any price, he's out of luck.
In my experience, an author's grounds for dissatisfaction are seldom restricted to money, and an author who is aggrieved with his publisher will not feel compensated by a raise in pay. The way options are designed today, however, the only legitimate way to escape from your publisher is to get a competitive house to make a bid for your book that is so high your original publisher can't match it. One cannot guarantee that will happen, however. Furthermore, the sophisticated language of some of the new options implies that you are in effect indentured to your publishers forever, as long as they continue matching the highest price you obtain in the marketplace. And, while I doubt that this interpretation would hold up in court, one publisher did recently attempt to invoke it to keep an author against her will. Only on threat of a lawsuit did the publisher decide, out of the goodness of his heart, to release the unhappy author. Agents like to boast that there isn't an option they cannot break, but the new phraseology is starting to spoil some perfect records.
Another significant change in contractual language has to do with electronic rights, specifically audio-and videotape cassettes. The last ten years have witnessed explosive growth in the consumption of videocassette recorders, Walkman-type tape players, and automobile audiotape cassette players, and the appetite for suitable programming has become ravenous. And now the Internet has opened unlimited markets for the exploitation of electronic rights.
Until recently, such rights were either reserved to authors as part of their motion picture and television rights, or, if they were granted to publishers, they were not exploited very aggressively because the market was so weak. Now, however, talking books, instructional tapes, and the like have become a source of intense contention between publishers and authors, and many publishers are quietly infiltrating contracts with language reserving those rights to themselves or granting themselves the right of first refusal to acquire those rights in the event that an outside company makes an offer for them to the author.
Not all the changes manifest in contracts over the last few years have been for the worse. At the time I started writing my column "Agent's Corner" in the 1980s, the only way that authors could secure insurance against the costs and judgments of libel and related lawsuits was to buy it themselves at exceedingly high premiums. Then a few publishers offered to include authors under the umbrella of their companies' libel insurance policies, free of charge. Many, but by no means all, publishers followed suit. In a typical contractual provision for libel insurance, the author is responsible for a deductible sum, usually in the tens of thousands of dollars. Thereafter, his expenses and damages, if any, are absorbed by the publisher--at least, as long as the author has not flagrantly abused the warranties in his contract.
Although a libel suit would still be costly to an author because of the high deductible, at least his liability is limited in the case of a catastrophically expensive lawsuit. This was and still is a generous gesture on the part of publishers. But the soaring costs of libel insurance premiums may force publishers to drop authors from their coverage.
Even more gratifying is some progress toward truth in royalty reporting. When I started writing about our industry, I asserted that many publishers, particularly paperback, issued deceptive royalty statements disguising the withholding of excessive reserves against returns. The raising of authors' and agents' consciousness has started to yield greater candor among publishers. Growing numbers now reveal in statements the total copies shipped, returned, and reserved against returns, and other publishers have installed provisions in their contracts agreeing to furnish such vital information at the author's request. This is most commendable, and wherever these practices have been instituted, I am told, authors have felt increased trust in their publishers. To the extent that my criticism has had anything to do with promoting harmony between authors and publishers, I am more than happy to take the credit.
One reason for increased candor on the part of publishers is that the returns problem has become chronic and severe, and publishers want authors and agents to understand that the withholding of large reserves is justified by the extremely high return rates prevalent in the industry today. Many publishers believe the returns problem has reached crisis proportions in the last few years, and book trade publications have reported creative schemes aimed at combating returns. Unfortunately, much of that creativity is at the authors' expense. I am skeptical that many such plans will work without the cooperation of authors and agents. I have tried in this book to raise the collective consciousness of writers in the hope of equalizing the lopsided advantage publishers have over them, even over those who have literary agents. I don't believe that anything important will be achieved in this respect until writers enter the realm of collective action. No single author or agent, however powerful, can compel publishers to establish a decent minimum advance and royalty, to pay out money due to authors within a reasonable period of time, to issue comprehensible, honest, and timely royalty statements, and to respond positively to reasonable grievances expressed by writers' and agents' organizations. Such improvements in the fundamental rights and conditions of authors will be conceded only under pressure applied by a unified author and agent community. The wherewithal to apply it exists now. Such organizations as the Authors Guild, the Association of Authors' Representatives, the National Writers Union, and a galaxy of writers groups are in a position to render significant changes. No more courage is required than what it takes to raise your hand over your head when the vote is taken.
Surely we can find that much, can't we?