Photo by Lara Kastner
Interesting, but in my opinion, inevitable, news in the publishing world: HarperCollins is forming a publishing group that will introduce a new model that establishes a different relationship between author and publisher. Traditionally, a publisher offers an author an advance against future royalties; this, theoretically, allows the author to finance the project, to spend the time writing or creating the book. When the book is published the author’s share of the proceeds equals 10-15% of the jacket price of the book for each book sold. My publisher, Scribner, has been very generous to me regarding The Elements of Cooking and the new cookbook I’m finishing now. Without these advances, I’d wouldn’t have been able to write the book. But that means I’ll have to sell a lot of copies in order for the book to earn out—that is, make back that advance at about $3 per book.
What this new group intends to do is to get rid of the advance but give the author a greater share of the profits. The headline in the NYTimes, where I read the story, slants the news somewhat, implying that the publisher is trying to take something away from the author. But, in fact, the new arrangement could also allow the author to sell fewer books, yet make the same amount of money in the end, or by selling the same number of books, the author might make as much as three times the amount he or she would have received given the old model. But: the author would have to finance the work and he or she could suffer if the book didn’t sell. If my books don’t sell, I still get to keep the advance (and Scribner, which would bear the loss, won't be so friendly the next time I come around with a book idea).
The new model intended by HarperCollins has already begun to happen in the cookbook world and we may see how successful it is next fall. Nick Kokonas, the restaurateur who, with Grant Achatz has created the restaurant Alinea in Chicago (pictured above), was unhappy with the conventional deals publishers were offering Grant for his cookbook. Kokonas figured, given that they have an in-house designer and photographer, they could do it themselves. They have hired several writers to handle various aspects of the text (myself included—I’m doing the intro and I also comment on the essays Nick and Grant are writing). The Alinea Cookbook is scheduled for a fall publication, and they are creating an intriguing website with demos and recipes and techinques to go with it.
The only thing Alinea can’t do is warehouse and distribute tens of thousands of books of enormous books. So they’re working with 10 Speed Press to handle it for them, as well as provide some marketing and editing support; because it’s paying Alinea no advance (which in today’s economic climate would be in the low six figures), 10 Speed has very little at risk. The risk falls on Kokonas and Achatz, and they stand to gain proportionately if the book does well—earning substantially more per book. The publishing world is changing faster than most publishers are willing to acknowledge. So far, the only response to the new dynamics has been for publishers to take on authors who have TV shows or some other “platform” resulting in a lot of books by television personalities and books promising fast, easy, low fat meals and eat-all-you-want diet books.
The new model created by Kokonas and perhaps soon a similar one by HarperCollins is exciting because it stands to enable chefs who can finance their own projects to do exactly the kind of books they want to do—which means we’re likely to see more risk taking and more innovative books, books that publishers in the traditional model previously wouldn’t have taken a chance on.
Update—Nick Kokonas expands on the numbers:
Ok. Let's assume a $40 sale price on a visually intensive book.
Wholesale price is $20. A normal retailer will then double that... but someone like Amazon or Costco, who still pay the $20, will discount the book significantly and might sell the book for $25. In any event, it is rare that the publisher discounts the books to anyone but large bulk purchasers such as Book of the Month Club or something like that where they might buy 10,000 books in bulk that cannot be returned to the publisher.
From the $20 that the publisher collects, let's say (to keep numbers round) 10% of cover price goes to the author on the first xxx number of books sold... then it might go up from there to 15% or so. These numbers vary by type of book, reputation of author, etc. so $4. Of course, the author doesn't get that money until he recoups the advance and typically will need to sell 20,000 or more books before that happens.
Of the $16 remaining to the publisher, $5 or so will be the printing cost on the book. Our book is costing significantly more than that to print because we have chosen to print it at the highest quality possible. But my guess is that $5 or less is about right for a 250 page color hardbound book -- that is a conservative estimate and I am sure that many books cost less than half of that to print.
Of the $11 remaining, the rest of the costs are internal: marketing, advertising, sales, etc. I have no real way of knowing what sort of margins a publisher can pull from that. One of the risks publishers run is that unsold books that sit on retail shelves can be returned to the publisher and the money refunded to the retailer.
Like the recording industry, the winners end up paying for the losers. Publishers take on the risk of giving advances to many authors, and then need to market them all, but of course some will be net losers. However, if you do the math, you can see that on a $60,000 advance, the book in our example only needs to sell 4,000 or so books to cover that ($15 per book is the divisor here because the author is not yet recouped, so we only need to subtract the printing cost). Of course, the marketing and such are not included, so let's be generous and assume the number is really 6,000 books. Still not that many.
We were offered a nearly mid-six-figure amount as an advance, but once we took that money we needed to pay production costs out of it and we would immediately lose our intellectual property rights, including digital rights, for all of the material. We would have no say in reprints, the ability to digitally sell or give-away material (my biggest concern personally), or even control fully the content of the book itself. One well regarded publisher wanted us to call the book something other than "Alinea". In addition, any books we would sell ourselves through the restaurant or at events or appearances would have to be purchased from the publisher at a slightly reduced wholesale rate. That was the kicker for me... we produce it, repay the publisher their advance, and then have to buy our own books back from them. Now, our only expense moving forward on the books we sell ourselves is the printing costs. So we have a strong incentive to find a direct channel to consumers and I expect to sell about 5% of our books that way.
The bottom line, is that if you can afford to forgo the advance if you are a writer, or front the production cost of a visually intensive book (not an insubstantial figure), then you will very likely end up better off with a distribution only deal -- provided you can find one. Judging from the news in the New York Times, I suspect that will be easier and easier to find.
Photo by none other than Donna
