The faltering economy has impacted most segments of business and industry, and those involved in the arts have not been exempt. Nevertheless, fiction publishers have taken action to provide new options to aspiring writers. Publishing has begun to affect a myriad of changes in an attempt to remain relevant and competitive in an increasingly tight struggle for entertainment dollars.
Given the current volatility in the book business, smaller profit margins and the need to entice a new generation as the avid readers of the baby boom are aging; publishing is at last seeking solutions to longstanding difficulties.
The publishing industry, deeply entrenched in long traditions and reluctant to initiate sweeping changes in a tight economy, is experimenting with ways to eliminate some of their most vexing issues. Those solutions may have a very direct impact on writers and their art.
Growing advances, deepening losses from book returns, and increasing market pressure from e-books, are cutting into already slim profit margins. More than ever publishers are recognizing the need to give readers options and provide books in any format the reader desires in order to increase sales.
Bookstore returns have been a long-standing problem for publishers, making deep cuts into profits. It is a trend with no easy answers, but one being broached by the availability of print-on-demand (POD) technology. Bookstores would no longer need to keep large numbers of books on hand, but could print paperback versions on site, thus eliminating returns, while the publisher—and author—would still maintain their percentage of the sale.
Author advances, the money given to an author at signing, continue to climb, despite efforts to curb the trend. There is no ceiling cap on advances. Reports of advances of $750,000 and more are both alluring, and frightening. Best-selling authors can command advances so high publishers often barely eke out a small profit, even for successful books. The battle is also fierce to grab new names in hopes of creating a new hit, and publishers sometimes offer high advances to untested authors. It is a gamble, and one publishers often lose. If the author does not take off as expected, there is little hope of their earning out their astronomical advance. Monies on advances are not refundable, and many in the industry, although helpless to alter the increasing costs, believe such money would be more profitably invested in promotion and marketing to increase sales of all the publisher’s releases.
This spring, Harper-Collins made a bold move in creating a new division and incorporating measures meant to offer a new look at solutions for these problems in the industry. Authors typically earn royalties of 15 percent of the price for each book sold above and beyond their advances. Many authors never earn out their advance and therefore never earn any royalties at all. The new Harper-Collins group will replace advances with a 50-50 split of profits for their authors. This is a bold move, and ultimately should provide authors with a larger and much more reliable return on their work. It would also help protect publishers from books that, for whatever reason, fail to perform as expected, since no large advance is at risk. The group began with a limited and selective group of authors offering low-end hardback books at around $20. Concurrent releases of e-book and audio book formats at the same time as the print book are intended to offer readers a wider choice of options.
With the push by Amazon and their Kindle reader, e-books are seeing some modest success. If additional mainstream publishers offer their books in both print and e-book formatting, it should provide increases in sales and a wider market identity for authors. However, the impact of big name authors moving into e-books, which have traditionally been the venue for smaller publishing houses and their writers, will be an intense increase in competition for e-publishing slots. This should result in higher standards and a better product for the reader, which in turn would result in increased markets and sales.
If the innovations undertaken by Harper-Collins prove successful, it would be an important step toward correcting many of the flaws in traditional publishing and the opportunity of revitalizing brick-and-mortar bookstores as well as providing greater security and options for marketability for authors and their books. Writers may soon have options never previously available, of taking an advance and the traditional percent on royalties or opting for a publisher who offers a more equitable split and a different approach.