Saturday, April 12, 2008

HarperCollins' New Imprint Will Harm Entire Industry

HarperCollins' new imprint will offer low or no advances to authors and won't accept returns from booksellers. Laine Cunningham, a publishing consultant for fifteen years, applauds the company for attacking the biggest problem in the industry today. But the damage to authors, she says, will cause publishers to suffer, as well. Cunningham recommends that authors use the FSA Rule when considering contract offers.

"Self-publishing by any other name," says Laine Cunningham, President of Writer's Resource, "is still self-publishing."

Cunningham is referring to HarperCollins' announcement last week that its new imprint will eliminate advances for authors and won't accept returns. With fifteen years of experience to draw on, she thinks offering a 50-50 profit split rather than paying authors up front will harm the entire publishing industry.

"That's only a step above the old vanity press system," she says. "Plenty of printers and hybrids that call themselves publishers already operate under this model." These profit-sharing publishers are widely considered to be the worst option for self-publishers because they offer so little in return for so large a chunk of the profits. When the model is applied to traditional publishing, the potential for damage grows.

"Authors these days from the mid-list down use part or all of their advances to market their books," Cunningham says. "A high profit split on top of zero advance means they'll have to sell twice as many copies to achieve the same reach. If they have no money in the kitty from an advance, the book sinks without a trace."

And that, Cunningham says, will hurt the entire industry. Readers faced with even fewer choices from a shrinking pool of authors will turn to other forms of entertainment. Authors who know they won't be supported will turn more often to the traditional self-publishing model where they might bear all the risk but they also reap all the benefits.

Rich Ehisen, a regular contributor to Comstock's business magazine, sees that starting to happen already. "At what point," he says, "do authors say the heck with chasing the big publishers and just do it ourselves anyway?"

Not all of HarperCollins' plans are detrimental. "Returns," Cunningham says, "have got to be the worst idea in sales and marketing ever. Everyone thinks book sales will plummet if stores can't return unsold copies. But no other product in the world is sold that way."

She compares the process to women's clothes. Multiple pairs of a single style of jeans are stocked in petite, average and long lengths. Stores buy dozens of pairs knowing that not all will sell for retail. "Guess what?" Cunningham says. "No one's refusing to stock Levi's because the company won't take returns. And you don't see the company eliminating entire lines or only manufacturing the most popular sizes."

Cunningham applauds HarperCollins for making a bold move against one of the industry's most antiquated procedures. Edmund Schubert, Editor of Orson Scott Card's Intergalactic Medicine Show magazine, disagrees about remainders but is also critical of the loss of advances.

"The idea of a book being non-returnable is monumentally stupid," Schubert says. "It's so engrained in the business that no bookstore will order a book it can't return. So a 50-50 split on a book no one will order sounds even less attractive" on top of the missing advance.

Cunningham points out other flaws in the arrangement. Authors have always struggled with royalty statements because the percentages are calculated based on profits rather than retail price. An individual has no way to determine if a publisher's expenses are apportioned appropriately to his or her book. The 50-50 split on profits therefore looks even worse.

"HarperCollins is trying to make some big changes in an industry that does need to be updated," Cunningham says. "But if you have trouble reaching the market, you don't starve the horse thinking that's going to fix the wagon."

For authors considering any type of publishing deal, Cunningham offers the FSA Rule. She developed this rule over fifteen years of helping authors improve their work and approach agents and publishers. By considering three primary concepts, authors can judge whether a deal will work. The concepts to consider are:

-- Is it Fair? The contract must be fair to both sides. The publisher deserves to make money in return for its time, effort and investment. So does the author.

-- Is it Sound? The deal should make good business sense. Both the publisher and the author should be clear on what each will do to create sales.

-- Is it Acceptable? Although this isn't a quantifiable measure, it is as important as the first two. The author must be satisfied with the deal over the long run. Dissatisfaction can eliminate the potential for future deals with the same company.

Laine Cunningham,


Miles Newbold Clark said...
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Miles Newbold Clark said...

If Cunningham's appraisal was correct, then an award-winning publisher like McSweeney's, an innovator like FC2, the majority of presses devoted to poetry and many of those maintained by universities would also be a "step above vanity publishing."

Perhaps Cunningham has missed the last decade of publishing history in the marketplace? Or perhaps is comfortable parroting the agricultural arrogance of prior generations?

To say that a market will "sink" because there are "fewer options" available to consumers denies the realities of internet-driven consumer habits, which involve greater interactions between producers and consumers.

A similar "sinking" is occurring in the music industry - at least at the top levels. This is widely seen as a result of the industry's inability to cope with the changing dynamic of the marketplace. With pundits like Cunningham doling out advice, expect a similar retraction to occur in book publishing.