The evolving role of agents
Because of a couple of panels I spoke on last spring and because of the development of FiledBy, I have had more and more conversations lately with agents. They are part of the General Trade Publishing ecosystem. So their lives are getting more difficult and more complicated, like everybody else’s in Book Valley.
The agents’ concern is frequently expressed as “what do I tell my authors?” Publishers are increasingly insistent that a prospective author have an internet platform to build on before they sign a book. Editors always wanted credentials to back up a writer’s authority on any subject; now they’d like to see that the writer has a following on that subject as well.
But agents are also concerned about themselves. The two most innovative imprint initiatives in recent memory — Bob Miller’s HarperStudio inside HarperCollins and Roger Cooper’s Vanguard inside Perseus — are built on the idea of reducing risk, paying the author a lower advance. Yes, they also promise a higher reward (higher royalty), but experienced agents know most books don’t earn anything beyond the advance.
Miller and Cooper are smart guys and it could well be that their imprints will have a higher percentage of earnouts than most. But, as smart guys, they wouldn’t be willing to pay more on the high side if they didn’t believe they were saving at least that much on the risk side.
The advance pool is probably shrinking. John Sargent, Macmillan’s CEO, said as much at a gathering of agents a couple of months ago when he explained that the de-leveraging that is taking place throughout the economy is also taking place in publishing. Big houses just won’t have the cash available to them that they used to, and that means less money for advances, less money for printing, and less money for promoting.
But in addition to shrinking, publishing advances are taking on much more of a power law configuration, with concentration at the top and a long tail of books getting less and less (and extended by mushrooming self-publishing where the “advance” is actually negative; it’s a cost!)
This is already having an effect. I have heard from people who know that larger agencies are now shopping among the smaller ones to buy them out. It takes more agents working to pay the same rent than it used to. And the smaller agents are finding it harder and harder to make a living so they’re ready to sell out a bit of their upside to get some stability. The small number of agents that have clients at the power end of a power law distribution are doing great; those who have traditionally made a living on making lots of second level deals are really suffering.
Compounding the problem for agents is the changing nature of publishing opportunity. While the sales and royalty potential of the book through the publisher is declining, other opportunities are opening up. There is a multiplicity of ebook channels that in the aggregate do not replace the revenue that print used to provide and doesn’t anymore. Chunks of books and material too short to be published as a book can be sold through them. Agents have for years been trying to split off audio rights to sell to Audible or Brilliance or Tantor Media. The opportunity to sell content to web sites seems to be emerging. But all of these deals require conceiving, pitching, closing, negotiating, and contract reviewing. For fifteen percent of what?
And further comlicating things is the ubiquitous self-publishing option. As self-publishing becomes part of the strategic approach to getting a “real” publisher (and it is), it adds a further complication to the business relationship between agent and writer. Is it fair for an agent to work with a writer on developing a proposal or a manuscript and then, when it fails to sell to a publisher, see that writer self-publish what amounts to a collaborative effort without owing anything to the agent? I think most agents would say, “NO!”
An agent for a book writer carries the same title as the agent for an actor or the agent for a performing musician but that’s a bit misleading. A book writer’s agent is really a business partner, more like the managerof an actor or musician. I see the writer and agent as two halves of a business: the writer creates the product and the agent handles the B2B relationships necessary to turn it into money.
When the book agent’s job, most of the time, was to find the biggest possible up-front payment for an author’s work, a straight commission deal made complete sense. With writer-pays options becoming not only more common and accessible, but more sensible as a commercial choice and, indeed, becoming part of the step-ladder to commercial success, it increasingly will not.
At a conference on “Giving It Away” in Toronto at which I spoke two weeks ago, Carolyn Pittis of HarperCollins was explicit that the publisher buying content and making money by selling it was “one model”, and she pointed out that there is a “fee for services” model as well. The inference I drew was “that’s not what we’re doing today, but every option is on the table for tomorrow.” Why not? Don’t we have to believe that one of the exit strategies for the investors in Author Solutions, the biggest rollup of self-publishing service companies, might be to sell to one of the Big Six who, despairing of the future of their publishing model, tries to buy their way into a new one?
I am old enough to remember that agent’s fees, now standard at 15% of revenue, once were 10% (like the agents in other businesses I referred to at the top.) When that change happened — was Scott Meredith the first? — many of the 10 percenters sneered at the change as exploitation. But eventually they all went that way. About 10 years ago, agent Richard Curtis started EReads, an ebook publishing company which gave his authors, and others, another choice besides throwing the ebook rights in for print publishers who, at that time, seldom exploited them. Curtis was also excoriated in some circles for generating a conflict of interest, which, indeed, it would have been if he steered his authors away from better ebook options with their publishers. (He doesn’t do that.) It would be like a doctor owning a medical testing business, for crying out loud! (And they do do that…)
A friend of mine in the financial business wrote a book 20 years ago and wanted to get an agent to sell it. He knew the advance would be low, but he also knew the book would add credibility to his business. He wanted it sold. An agent told him that the agency only handled books on which they thought the advance would be $25,000 or more, yielding a commission of $3,750 at the normal 15%. This friend told the agent, take the first $3,750. The agent took the book, sold it for $6,000, and everybody was happy. This kind of arrangement, as well as others where the agent actually charges a fee for helping an author manage self-publishing options, are going to have to become more common in the future. Let’s not be too judgmental about the pioneering agents who change the paradigm.