The Authors Guild: A Mouse Roaring

It is interesting to watch the Authors Guild take the next vital step in proving itself irrelevant.

“As part of its ongoing effort to raise writers’ income,” reports Publishers Weekly this first week of January, 2016, “the Authors Guild is sending an open letter to members of the Association of American Publishers. The Guild will begin mailing the letters this week, with the first going to the largest publishing houses; in subsequent weeks the Guild expects to hit the remaining relevant AAP members, said Mary Rasenberger, executive director of the Guild … . The letter recaps the highlights of the Guild’s Fair Contract Initiative, which the association began at last year’s BookExpo America, and which sets forth the Guild’s contention that if authors are to be adequately compensated for their work, the standard publishing contract needs to be reworked.”

Among the demands of this initiative are 50% of NET proceeds from eBook sales, the return of rights to the author once a publisher stops “supporting” a book (support being vaguely defined), and the discontinuance of non-compete and options clauses which inhibit an author’s freedom to embark on further projects in a timely manner.

Let’s take these one at a time.

The Guild’s simplistic understanding of the publishing economics for eBooks — on which they base their demand for a 50% royalty on NET — has been debunked by more than one industry pundit, perhaps most clearly by my longtime friend and sometime editor Peter Ginna, former publisher and editorial director at Bloomsbury Press. I’ll not repeat what he has already said so eloquently. You’ll find his piece here. Simply stated, eBooks are not cash-cows.

As to the automatic return of rights once a publisher stops “supporting” a book, I’m guessing this might mean once a publisher puts its editions out of print. But here the Guild forgets that nearly all trade publishing contracts (at least those negotiated by agents who are not drunk at the time) have long included language obligating publishers to return rights for out-of-print books to authors upon demand — either that or republish the work. Here the Guild also forgets that in the new digital publishing environment, the eBook edition of a trade book usually never goes “out-of-print” — thus the demand seems moot.

Finally, the fact that non-compete and options clauses inhibit authors’ abilities to bolt off immediately from one publisher to another is completely true. This is the intent of those clauses, and always has been. These clauses protect publishers who don’t want a similar book by the same author competing directly with a front-list title for which they’ve paid a hefty advance. These clauses also protect publishers from having to bid on a follow-up project from an author before seeing what sales they have earned from that author’s current front-list title, and what benefit they’ve derived from not just their royalty guarantee investment in that author, but also their investments in editorial time, publicity, etc.

Such are the facts of legacy publishing — the only publishing houses (aka, members of the AAP) and the only authors with which the Guild in truth concerns itself, despite rhetoric to the contrary.

It must be noted that in terms of real dollars, most authors published by legacy houses wind up making far more than even today’s standard contractual royalty rates on a per-unit-sale basis. Why? Because any agent worth his or her salt negotiates the largest royalty advance possible, and the vast majority of books from legacy publishers never earn-out on those advances.

One example: In the late 1990s, Doubleday’s Bill Thomas paid me a $225,000 advance for my book The Kennedys at War (published to favorable reviews in April 2002). The deal was negotiated by Chris Calhoun, then at Sterling Lord Literistic. Per the contract, I had to wait six months after publication before proffering another proposal, to which Doubleday was entitled first-look, with no obligation on their part to make an offer and no obligation on my part to accept any offer they made. (Indeed, my next book came out under the Basic/Perseus imprint.) The Kennedys at War remains “in-print” with Doubleday as an eBook, the paper edition having long since been remaindered after sales which, though strong, fell well below Doubleday’s all-too-optimistic forecast. In the end, my per-unit royalty on actual retail sales of the book wound up being approximately $22 per paper copy. In other words, Doubleday took a bath.

Such is the risk the legacy publisher deals with. (Some will cite this as an extreme example; and I suppose it is. But many is the book with a $20,000 advance that sells only, say, 3,000 paper copies before being remaindered. That’d equal a $6.66 royalty per unit on a book that retails, for argument’s sake, at $22.95 — in real terms, a 29% royalty vs. the stated industry standard: approx. 12% of retail paper price.)

All of this aside, there’s another aspect of fundamental economics which the Authors Guild chooses to ignore. This is the simple, natural tension between supply vs. demand, and how this tension feeds into the calculation of value. PW states: “To buttress its argument about the need to raise authors’ earnings, the letter cites the Guild’s 2015 survey [of its own members only and no other professional writers, thus hardly representative], which found that writing-relating income for full-time authors dropped 30% between 2009 and 2014, to an average of $17,500.” (Note: The AG claims about 9,000 members. According to UNESCO, the total number of books published annually in the US is approximately 300,000.)

At the risk of sounding a bit too much like Ayn Rand, let me say this: No market — not even the literary market — is driven by the income needs of market suppliers. Scarcity magnifies demand, which in turn increases value. The going-rate for anything — be it bananas or LSD or novels — floats on this tide.

And, here’s the news flash — wait for it — writers looking to get published are legion. The only thing scarce in this equation is scarcity itself.

Hold on. I hear the snide and elitist rejoinder already. Yes, but most of the legion of unpublished writers suck. Sure thing. Absolutely. So too do many of the writers who DO get published. (Just try reading the roman a clef A Shore Thing, written by Snooki of “Jersey Shore” fame, and published by Simon & Schuster. Go ahead. I dare you.) Meanwhile, the fact is Stephen King was once an unpublished author, until 1973 when he got a very modest deal for Carrie, Doubleday paying him a whopping $2,500 advance. (Signet later bought mass market paper rights for $400,000, half of which went to King. Water seeks its own level.)

Get the picture? There’s a hell of a lot of talent out there, boys and girls. Real talent. Excellent writers. All competing. And all tending to make it a buyer’s market for new and innovative content, save — of course — when it comes to blockbuster “name” authors, whether these be actual writers such as King or mere inarticulate celebrities such as (God help us all) Snooki.

One feels rather through-the-looking-glass as one watches the Authors Guild make demands from this powerless position. (PS: Doing so through the vehicle of a letter-writing campaign only serves to highlight the toothless nature of the organization.) Nevertheless, a great, self-important sense of entitlement prevails at the AG, as it will — I’m sure — for quite some time. Reality be damned. And on they go …