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Agents warn of e-book "reckoning"
11.10.11 | Philip Jones
Literary agents speaking at Publishers Launch Frankfurt have challenged publishers to approach e-book royalty discussions in a more "knowledgeable" way or face a "reckoning" from the digital revolution. But there are signs of movement on the 25% royalty from UK publishers, with UK agent David Miller stating that he had negotiated better rates for some of his authors.
Robert Gottlieb, chairman of the US literary agency Trident Media Group [pictured], said publishers were still fixed in their traditional models. "American publishers have to get beyond the point when they are doing it the same way, over and over again," he said. "It means cutting overheads, and changing their dynamics, and welcoming as opposed to resisting or being frightened of this new e-book arena."
He said publishers should "embrace" the changes, and "then they'll be able to look at what they are paying their authors in a knowledgeable way, and we will then see the rate moving up". Gottlieb warned that new players such as Amazon had no such constraints and were "offering a higher e-book rate, and advances that are comparable with what others publishers are willing to pay". He warned that publishers' grip on the business was "starting to change in favour of the author". He added: "Publishers are frightened to death of the e-book market, because they see the opportunity for authors, that they did not have before."
Peter Fritz, literary agent at Paul & Peter Fritz in Germany, said publishers faced a "reckoning" because of their refusal to adapt: "These large companies got into the market because they could afford to, but they were also afraid of it. We may not have seen it yet, but there will be a company with a new business model, and it will be harmful to those large publishing groups."
David Miller from the UK's Rogers, Coleridge and White literary agency adopted a more conciliatory tone, saying that he had seen some "slippage" in the UK over the 25% digital royalty rate. "I've negotiated some better rates, and publishers are beginning to run a little faster, and we are getting those conversations going, particularly where an author has an extensive backlist, or where the author has earned out." Miller also said that UK agents were "slightly more cautious" about dealing with Amazon, despite the royalty rates on offer.
At a separate session Faber chief executive Stephen Page agreed that publishers had to adapt to a new approach, saying: "Publishers have to get far far better at communicating the manner at which they can create value and what that value is worth, and that is going to result in a change in orientation of publishing houses."