The case for United Authors

In 1919 four leading lights of the newest entertainment medium around, the movies, cut themselves off from the conventional studios and formed something called United Artists. Mary Pickford, Charles Chaplin, Douglas Fairbanks, and D. W. Griffith wanted better control over their artistic future and a fairer share of the money the studios were making from them. They envisaged a creative enterprise owned and managed by the people whose talents were the raw material around which its fortunes were set.

An interesting idea, and one I start to hear mooted more and more among my fellow authors as they peer into the uncertain and shifting future of book publishing. As I noted here the other day, the present model of publishing is based upon the recent past, not a rational, frank look at what the fast-changing world of books requires in a time of new markets and media, and radical shifts in publishing practice. Are we fast approaching the moment when authors should begin to cut their comfy umbilical ties to existing houses and go it alone?

Let’s begin with a caveat. This article is based upon what I, as an outsider, perceive to be custom and practice in the US book market, an industry which has similarities with markets elsewhere but is unique on several fronts, namely…

• Its vast size
• Its division of traditional book retailing between big, monolithic national retailers and a substantial if threatened network of small, independent stores
• Its embrace of new techniques and technologies ahead of the rest of the world, notable ebook readers, such as Kindle, and the rapid rise of Amazon as a new distribution medium
• Its willingness to experiment with new models, often under intense economic pressure, when other parts of the world are content to rely on existing systems, perhaps because the pressure hasn’t reached them yet.

Once upon a time the route from author to reader was relatively simple…

Then, in the twentieth century, it became somewhat more complex. Here is the way it looks for many a professional author today.

Complicated or what? And of course each one of those steps in the chain needs to earn a living. As money passes back from reader to author, the pool of cash is diminished. In the end some eight per cent or so of the retail price, in the case of print, makes its way back to the original writer of the material. The rest is absorbed in retail costs, publisher margins, returns, distribution, print, publicity, marketing… all those things that authors never think about much if we’re honest. More importantly, some might say, the reader and author find themselves separated by a barrier of intervening processes and managerial layers that can serve to make writers somewhat remote from the people that matter most – those who buy and relish their work.

We live in an age shaped by technology. One of the key buzzwords in this era is a nasty and ugly one with some very interesting implications: disintermediation. What this means is quite simple: thanks to the Internet lots of these intervening layers can be done away with. Disintermediation is what iTunes did to the record companies, making it possible for bands to reach their audience directly through digital uploads, and to produce their own music at home without having to resort to the studio system that demanded they sign punitive contracts forcing them to spend their ‘advances’ on expensive recording commitments.

How might a disintermediated United Authors publishing system look? At its most savage, maybe like this…

OK. Let me try and quell the screams out there from agents first. Am I suggesting they’re doomed? Not for a moment. Good agents serve an extremely important purpose in the current process. But in a remodelled book age their role is going to change. One possible future is that conventional advances will begin to disappear. Vanguard Press pioneered the no-advance model a few years ago and now has some distinguished and successful authors under its wing, among them David Morrell. Vanguard works by paying higher royalties, handing them out early, and focusing on marketing and distributing its authors. This is clearly an idea that has its fans elsewhere. Last year, Bob Miller quit the house he founded, Hyperion, to set up just such a unit within HarperCollins. HarperStudio is now in operation, though I’m a little unsure what its editorial direction is from its web site. But it’s an interesting place all the same.

if you don’t have advances why do you need an agent? Well to sell into other markets for one thing: foreign, movie, TV. Important places. But cutting deals with conventional publishers ever more wary of tying themselves into uncertain advances may not be a safe bet for much longer.

Now to the second disruptive event: ebooks. There’s a fascinating discussion about this on the HarperStudio site where Bob Miller says out loud, ‘I agree that e-books should be priced lower than physical books. But I don’t agree that being profitable at $27.99 translates to being profitable at $9.99. It only costs us about $2.50-$3.00 less for us to publish the e-book, not $18.00 less.’ Asked to justify this by an incredulous commenter, Miller says, ‘most of a publisher’s costs are in overhead and advances to authors, which don’t change if the book is printed on steel plates or paper or pasta or transmitted electronically’.

OK. But we’ve just done away with advances. And any new publishing venture is going to do away with huge offices in New York, fancy expense accounts, and a lot of that overhead too. Do that and ebooks ought to seem a dream. No print or distribution costs. No expensive returns. No inventory. Oh, and from the point of view of existing publishers, a distinctively hazier relationship with authors when it comes to handing out royalties.

While print contracts tend to run around standard figures, say around eight per cent of retail price, ebook royalties vary widely from publisher to publisher. As the agent-run Pub Rants blog notes…

Every publisher has their own structure (which is a bit annoying) but there you have it. Also, there are two basic ways to pay e-royalties. Some publishers do a straight percentage of retail price of the work (standard is 15%). But some publishers do the royalty based on net amount received. Not quite the same thing. Standard for net amount is 25%. So you have to check the language. You might look at a contract and see 15% and think it’s all groovy. But 15% of net amount received is not the industry standard.

In fact it’s even more complicated than that. Random House, for example, recently announced a complex change to its ebook rates that actually reduced the royalty, down to around 12.5% according to this estimate by E-Reads.

Why should authors accept 12.5%? Amazon currently pays 35% royalties on self-published sales through its ebook programme. This is the standard public rate which anyone can get just by uploading a file to the Amazon site. Big publishers supposedly get around 50%. This margin comes from Amazon’s market domination and is likely to be challenged in the future, changing in the favour of publishers. At least one rival ebook store, based on an open format, is due to launch in the coming months and will offer much more generous rates, possibly double or more to participating parties.

Here’s one possible model for United Authors. Participating writers get their books edited by an outside party and upload them directly into the ebook channels themselves, taking the royalty directly – currently, say, 35% but soon to be much higher when ebook distribution competition arrives. If they want to be in audio, they either pay to produce the audio book or sell to an audio publisher. Either way the delivery medium will, surely, be direct digital download, not physical distribution, for the most part.

United Authors then cuts a deal with a no-advance book publisher who handles the conventional print side of the equation. Some percentage is taken off to pay for United Authors’ minimal operating costs, probably on a par with union membership dues.  Publicity and marketing are handled directly by the authors themselves, out of their own pockets.  Not that there’s anything much new in that – most conventional publishers seem to be expecting this of their authors already.

Could it work? Hell, I’m a writer. What do I know? But, speaking as an ignoramus whose business experience amounts to once having been an executive director of a struggling and now disappeared small magazine company, the potential advantages, it seems to me, are many.

• You get the benefits of the potential system without many of the downfalls or the crippling overhead
• You cut out a lot of the intervening processes between writers and readers
• Your print partner can focus on selling books without worrying about whether he’s got enough money to pay the next instalment of the advance or dealing with whiny authors complaining the limo’s late for the book tour
• You can get books into the market more quickly, cheaply and efficiently
• You could, in theory, be more creative, using the economic flexibility of the ebook system to publish material such as backlist books, novellas and short stories, that the conventional channel will reject as unviable.

But the pitfalls are multiple.

• This kind of model may look simple in practice but would doubtless prove more complex and expensive in reality than it appears at first sight
• It’s a rotten economic climate for launching something new
• You won’t have a conventional editor, and editors, when they’re good, are a godsend
• Authors are on occasion criminally dismissive of the hidden skills and talents that go into getting their work to market. It’s not easy selling books, whatever we think. Something would get lost along the way
• This is a model made for the American market alone and wouldn’t work elsewhere for some time to come
• Authors may occupy one of the insecure jobs on the planet but they are temperamentally risk-averse and often suspicious of new ideas, preferring to sit back and hope a fat advance will fall through the door instead
• Creative types are rarely managerial types and usually make a hash of business things because they think, wrongly, it’s just business, and anyone can do that, right?
• I haven’t a clue how you’d work out who could join the club. Clearly you couldn’t allow in everyone, otherwise the United Authors brand would just be one more self publishing outfit. Creative, editorial decisions would have to be made. If this were to be a system for new authors, not established ones, it would, one way or another, become a publishing house. Isn’t that what we’re trying to put behind us?
• It would probably need one or two brave big names to quit their comfy contracts with existing publishers and lend some credence to the operation. And who would take the risk?

One final point too: United Artists may have been a lovely idea, but the company struggled from the start and became just one more movie studio name, passed from owner to owner. It was last revived in 2006 by Tom Cruise and the producer Paula Wagner. After its production of Cruise’s Valkyrie Paula Wagner left last year. A great and revolutionary artistic success? Not exactly, though whether this has much relevance to today’s writers is another matter.