Around the Kindlesphere: Two Very Smart People Weigh in on the Idea of Literary Agents Bypassing Publishers

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I’ve already had my say in the three posts linked [at the end of this post] on last week’s big news, but there are plenty of other intelligent points of view to choose from. Two of the smartest people with fresh things to say about changes in the world of books and publishing are author J.A. Konrath and publishing industry consultant Mike Shatzkin. I don’t agree with them on every word, but their most recent posts on this topic are well worth the time it takes to read them if you have an interest in these matters.

My only real quarrel with Joe Konrath’s post is his concern that a literary agent who becomes a publisher is engaged in conflict of interest:
Wylie is an agent. His job is to sell his clients’ work. If he is also the publisher of his clients, there is a HUGE conflict of interest there, as well as some ethical considerations. 
My take there is just that all the lines are changing and blurring so quickly that I don’t see this as any more significant a conflict than, say, booksellers becoming publishers, publishers become booksellers, or authors becoming booksellers and publishers, all of which is happening. It is all part of the process of experimenting with different kinds of, excuse me for the 75-cent word, disintermediation, as we all try to become more efficient and effective and making better, stronger connections between authors and readers.
 
The biggest flaw that jumped out at me right from the start of Shatzkin’s post is an error of omission. He says that the "three moving parts to the publishers’ margin equation for ebooks" are (1) ebook prices, (2) the potential consolidation of sales channels that could occur through Kindle domination of ebook content market share and, presumably, the failure of brick-and-mortar bookstores, and (3) author royalties. I think that he — and many who are looking at these issues from the Big Six publishers’ point of view — have structured their viewpoints so that they are failing to recognize the importance of another significant moving part, which is the potential decline of Big Six content sales relative to the content provided by other authors and publishers.
 

But once you get beyond that problem, Shatzkin provides the brilliant if obvious solution to the whole mess.
 

There’s a very simple, clear policy they could declare that would make this whole issue go away. Maybe there are one or two already acting this way, but it would be nice if even one publisher would just say this:

“Our policy for all new titles we sign up in the context of all our other standard terms is that we pay 25% royalty on ebooks. But for those books on our backlist which a) have earned out their advance and b) have ambiguity in their original contracts making it unclear what the royalty rate for an ebook should be, we will negotiate a higher royalty in recognition that a contractual element is being negotiated after the value of the copyright has been demonstrated in the marketplace and the risk profile has changed.”

Life is very complicated here. Every deal is different. There are costs and risks for authors and publishers trying to set up these separate ebook deals while a print backlist remains with a legacy publisher. The publisher might sue (although that opens up, for them, the danger that they’d lose, and the consequences of that could be dire.) At the very least, the author annoys the guys with the big checkbooks who are still the custodians of their print sales.

Although it is certainly possible that some authors or estates would want a publisher as talented as Jane Friedman remarketing their backlist, I still believe that if Open Road and others are offering 50%, publishers would find many authors receptive to avoiding the conflict if the publishers were offering 40%. But even if they had to pay 50% to some authors, the publishers would be doing themselves a favor by stating the position articulated above.
It may not be a total solution, but it could well put off the ultimate death of the Big Six publishers at least a few more years.

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This is a cross-posting from Stephen Windwalker’s Kindle Nation Daily.