2010: A Publishing Odyssey

Jon Reed is the Founder and Editor in Chief of Publishing Talk, and author of Get Up to Speed with Online Marketing. Follow him at @jonreed.

With the launch of Odyssey Editions, has Andrew Wylie turned publishing on its head?

Is this a tipping point? Did publishing power just shift a little in favour of authors? Are agents publishers now?
Über-agent Andrew “the Jackal” Wylie – no doubt with his little finger at the corner of his mouth, Dr Evil style – has hatched an audacious plot. Or maybe he has just seen the future. Either way, he has disintermediated the publishers he works with – for ebooks at least. With last week’s launch of Odyssey Editions, his Kindle-only ebook imprint, a range of his authors are now available digitally for the first time. And we’re talking some pretty big names here: Vladimir Nabokov, John Updike, Philip Roth, Salman Rushdie, Hunter S. Thompson, William S. Burroughs, Evelyn Waugh, Oliver Sacks, V.S. Naipaul, and Martin Amis are among 700 authors and estates.
To me, this seems inevitable. Many authors and their agents get the new digital realities – and, more importantly, the opportunities – while too many publishing discussions still focus on a protectionist response to the ‘threat’ of digital. If publishers won’t grasp digital, authors and agents will. Ebooks are increasingly maintream, with Amazon now selling more ebooks than hardbacks. Publishers can be slow on the uptake with ebooks, while consumers want to read them. Publishers have a vested interest in holding on to traditional print publishing models – while agents have a vested interest in the success of their authors. This is where the battle lines will be drawn in the coming war of the business models.
It is no surprise that the big publishers don’t like this. They don’t like it at all. Random House disputed the deal. And Macmillan CEO John Sargent was quick to respond on his blog:

This is smart retailing, and a great deal for Amazon. But it is an extraordinarily bad deal for writers, illustrators, publishers, other booksellers, and for anyone who believes that books should be as widely available as possible. This deal advantages Amazon, which already has the dominant share in this market.
JOHN SARGENT, CEO of Macmillan, 22 July 2010

Is it really a bad deal for writers? The comments say it all, such as this one from Richard Askenase:

Sounds like a VERY sound business deal to me. First, Wylie probably got about 70% royalties for his company/author. Second, the sale price of the ebooks are reasonable (unlike so many of your company’s prices). Third, if you wanted to publish these books, why didn’t you do so already? The point is, Wylie acted for his clients in dealing with the present/future and getting them very good money. MacMillan et al? They sat on their hands and overpriced them, with LOW LOW royalties to the authors.
RICHARD ASKENASE, commenting on John Sargent’s post

The Authors Guild described the move as ‘weird’. But added that: “This sort of weirdness will only multiply, however, as long as authors don’t share fairly in the rewards of electronic publishing.”
You may recall, at the London Book Fair Digital Conference this year, there was palpable eye-rolling in the room when agent Ed Victor asked why, if there are no warehousing costs, no manufacturing costs, no distribution costs, and no bookshop returns, did agents have to drag publishers kicking and screaming to 25% of net receipts? This is not a question most publishers like to engage with.
But the harsh truth is: it doesn’t matter whether publishers engage or not. Those publishers who don’t engage will be cut out of the loop as the world rolls on regardless. It doesn’t even matter whether they decide to pay fair royalties or not. Ultimately, it’s not their decision any more. The economics of the new publishing are open to all. Publishers no longer have the monopoly. Anyone can play. And if someone chooses to take their ball away and play a different game with someone else, what, exactly, are you going to do about it?

To a large extent, publishers have brought this on themselves. This storm has long been gathering. Literary agencies have refused to sign e-rights deals for countless backlist books with traditional publishers, even though they and their clients, no doubt, see real benefits in having a single publisher handle the print and electronic rights to a book. Knowledgeable authors and agents, however, are well aware that e-book royalty rates of 25% of net proceeds are exceedingly low and contrary to the long-standing practice of authors and publishers to, effectively, split evenly the net proceeds of book sales.
AUTHORS GUILD statement

The Authors Guild also estimate that author income from ebooks will be 300% higher under this deal than under traditional publishing contracts – 60%-63% of retail price rather than 25% of net receipts. What’s not to like?
The big publishers may rage against the dying of the old business models. They may even delay the inevitable. But they won’t prevent it. As ‘Skip’, a commenter on John Sargent’s post put it: “John is worried that in a few years nobody will want to buy his buggy whips any more, so he’s doing anything he can to stop those new-fangled automobile things.” Welcome to the 21st Century. Adapt and survive, or disengage and die. It’s going to be a bumpy ride.

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