The hot topics

12.12.11 | Pete Ayrton

At the Symposium of European Publishers, organised by the International Bureau of French Publishing (BIEF), in association with the French Publishers Association, Syndicat national de l'édition (SNE), the hot topic was the changing relationship of sales between digital and conventional books, which affects the revenue split between authors, publishers, agents, designers and booksellers.

There were suggestions that there could be a win-win situation, where as e-book sales grow as an overall percentage of sales, the share going to authors and publishers also grows. However like all things in the real world, the situation is much more complicated: why?

Firstly, in the new e-conditions, the role of publisher is undermined. Authors no longer need publishers (or at least don't think they do). Already famous authors are making a lot more money selling directly through Amazon than through a publisher:
 for example, thriller writer Barry Eisler turned down a two-book deal with St. Martin's Press in March worth $500,000 in favour of self-publishing. But in May, he inked a deal with Amazon instead.


"A half a million dollars is attractive , but it always comes with caveats." Eisler said. "[Traditional] publishers are going to set prices and the release date. They want to control the cover art and even the title." 
His deals with traditional publishers typically gave him 17.5% of the retail price, while self-publishing would have netted him around 70%. He won't reveal the cut that Amazon offers, but "it's much more favourable" than the "traditional guys".


But the internet also offers attractive possibilities for unknown writers. For instance, during April 2011, the first novel (Captive by Megan Lisa Jones) published on the website BitTorrent—and was downloaded 423,000 times as a free download. Other sites like Unbound offer a different model—the author puts a proposal for a book on the site and if enough pledges of money are received the book is printed and everyone who pledged money gets a copy (signed if you pay more).

Amazon.com with its Prime plan is offering to loan subscribers a book a month—this is on top of free shipping. It is having difficulty signing up big publishers to the scheme but it would seem that those that do are paid a one-off fee, rather like the payment model of film websites such as Netflix and Lovefilm. This is not a model for bibliophiles but what percentage of book buyers are? It is no accident that the type of books Amazon has started publishing is genre—romance and crime. Many genre readers do not want to keep books.

And it is not only publishers who are threatened by these changes—as the agent Richard Curtis writes in the New York Times, quoted on Francoise Benhamou's blog for Livres Hebdo: "If you are a bookseller, Amazon has been a competitor for a while already. If you are a publisher, one day you wake up and discover that Amazon is a competitor. And if you are an agent, Amazon may steal the food from your table since it will offer authors the possibility of publishing directly their works and do without you."

Of course, these changes will be less marked and slower in countries that do not have the Net Book Agreement (Prix Unique) but it is still important to be aware of them (I should add that I believe that the abolition of the NBA is responsible for the great majority of the disastrous conditions prevalent in publishing in the UK and yet still today it is rare to find someone in a senior position in UK publishing who argues for its re-introduction).


The implications for rights are many. Here are a few:


1. The definition of what it is to be in print/in commerce. Is a book still in print if it is only available as an e-book? For certain types of titles (deep backlist, classics) e-book sales will become the majority—so it is more and more important for the definition of in print/in commerce to allow for this. The definition of what it means to be 'in print' will have to include a percentage of e-book sales. More and more UK and US publishers are insisting that e-book rights be included in rights deals. I would strongly advise European publishers to acquire these rights if they do not already have them.


2. High discounts. At present UK publishers are making deals with the chains at the same discount—for some the discount is just over 60%, for some it is just under—because of the contracts they have with an author, it can be better for the publisher to agree to a discount of over 60%. Obviously this is much worse for the author. In many rights deals, the foreign publisher's royalty is calculated on price received on sales at a discount of over 50% or over 60%; more and more sales will be at these high discounts.


3. The percentages going to authors/foreign publishers on e-book sales are changing. Currently the norm is for 25% of price received/receipts but there will be pressure for the author's percentage to increase as authors have the option of selling directly to Amazon.

4. Rights sales will also have to allow for the Amazon Prime model: if UK/US publishers are getting a flat fee from Amazon, how much money does the foreign publisher get from this kind of deal? Some of you may have already sold books to Amazon Crossing—does their contract say anything about what they will pay you on books that are loaned to Amazon Prime subscribers?)


To conclude, I would suggest certain steps that must urgently be taken:


1. We need to find initiatives to support independent bookshops—for even with the growth of social media, they remain the crucial arena for people to discover and fall in love with books—you cannot browse on Amazon! In the UK, we have the absurd situation where independent booksellers can get books cheaper from Amazon and supermarkets than directly from the publishers—and they do this at Christmas. But it is not enough for publishers to declare love for independent booksellers. We need to find a way of offering them discounts no less (or only slightly less) that what we give the big boys. This will not be easy in a situation where the discounts publishers give booksellers is a secret.


2. We need to stress the role of the publisher; the work we do with authors, the role of publishers in selecting what is published, the time/money we put into building authors.


3. Take a more nuanced view of the relationship between internet and conventional books. There are examples that show that free availability on the internet encourages sales. We are about to publish From Dictatorship to Democracy by Gene Sharp, a seminal political text that has been available free on the internet for years—we are optimistic about conventional book sales. It is quite likely that some people who read a book for free on the internet will want to buy a copy to  keep or to give it as a present. This is more likely to happen the more beautiful an object the book is.


4. To the surprise of many, books continue to retain a privileged place in our culture. In the early days of Serpent's Tail, I was inspired by an interview in Publishers Weekly with Howard Kaminsky, the then head of Warner Books who had just bought the paperback rights to Umberto Eco's The Name of the Rose. The interviewer suggested that it was an unlikely (implying too literary) book for Warner to be publishing. To which Kaminsky replied that Warner did not only publish books for people to read. And he went on to say that the fact was that if you wanted to pick up a date at the Museum of Modern Art in New York, there was no better book to be showing out of your pocket than The Name of the Rose—this has always been my ambition for Serpent's Tail books!

Much better than book internet dating. But for those of you who want to do just that the site to go to is goodreads.com.
 

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