The latest news from the publishing front is that some agents are starting publishing arms.
In case you wonder how this will operate, some of the details are here. Here’s the crucial line:
[N]et receipts will be divided on a 50/50 basis between author and agency, once production costs have been recouped out of the first receipts.
Yikes. If you’re an author or an aspiring author, and your agent offers you these or similar terms, do not pass go, do not do anything else. Go directly to your computer and type up a certified letter firing your agent and put it in the mail. Immediately.
There are two reasons why this is egregiously, stunningly, awfully bad.
First, it sets up an extraordinary conflict of interest for the agent.
Let me illustrate. Imagine an agent lands a traditional publishing deal for his client–$10,000 for a first book. Yay!
Now, you also think that the client can self-publish, and after expenses, and taking into account the time-value of money, the agent estimates they’ll make $8,000 over the lifetime of the book. (Don’t ask me how they estimate that.) Yay! Options!
How should the agent advise the client?
The traditional publisher will make the agent $1,500 and the client $8,500. Under the Ed Victor model, if the client self-publishes, the agent will make $4,000 and the client will make $4,000.
In order to properly serve the interests of the client, the Ed Victors of the world would have to advise the client to take the traditional publishing deal. But this model just skewed the take so that the agent has every financial incentive to give the client bad advice. It gives the agent a $2,500 financial incentive to lie to the client and overestimate the value of self-publishing. More importantly, it gives the agent a $2,500 financial incentive to lie to himself about the value of self-publishing.
At the point when the agent’s interests stop aligning with the client’s, the client can no longer trust the agent to tell the truth. Once that happens, the agency relationship has been irreparably broken.
The second reason this is an instant firing offense is that the terms are unbelievably bad. Ed Victor is talking about starting this with backlist books–books that have already been edited. What is he putting into the equation that is worth 50% of the take? I don’t see it–I really just don’t see more than a few hours of work on his part. He calls someone who scans books. He calls a proofer. He calls a formatter. He calls a cover artist. He pays maybe $800 total for those services–which payment is relatively risk free to him, because the production expenses repay him first. For about 30 minutes of phone calls and 30 minutes of responding to e-mails, he’s taking 50% after expenses are paid. The only way I can understand why anyone would agree to this is because to an uneducated author, it looks better than the 92% that the publisher would take.
Agents who take a 50% cut because their authors aren’t educated as to the alternatives are not acting in their clients’ best interest. On the contrary: they’re declaring themselves to be shysters to the entire world.
There is really only one way to deal with this sort of thing: fire the agent. Now. Even if he didn’t make the proposal to you, if your agent announces this skewed a business model, go to your computer, fire up your word processor, and fire them that same day. Period.
I think there can be a productive, valuable role for agents, even in the self-publishing world. I’m still thinking about what that is, but I think it can exist. But this is definitely not it.
Hi, Courtney. I agree with you, this is a bad deal. A scam. And there’s another reason to be wary of a deal like this: “net” is creative-accounting speak for “you’ll never see a penny.” Net means whatever is left after all expenses are taken out, and expenses can be sneakily expanded until they’ve eaten all the writer’s money. This is how sharks in the music business suck all the money and life out of musicians. So run, fast and far, from any deal that offers you a percentage of “net.”
Well said, Courtney.
Personally, I would be very hesitant for agents to be involved in self-publishing HOWEVER I wouldn’t be opposed to it if the author goes in with information and knowledge. I think the deal should be 15% like it is in traditional publishing IF the agent is truly a partner in finding the right vendors for cover design, editorial, etc. (and frankly, as the author, I would want to be part of that process and if I were an indie publisher, I would pay for it.) I’d want my agent to help with strategic planning, marketing plans, vendor management, cover consultation, financial issues i.e. reading the statements and working with the big guys (i.e. a top agency would have more clout with Amazon than an individual, just like publishers do.) And, because digital doesn’t go out of print, I’d think that some sort of limit should be placed on the length of the contract, i.e. 3 years or 5 years. And I think the money should go directly to the author (if the author is paying the initial expenses) and the author sends a copy of the statement with 15% check to the agent. That’s just my off-the-top gut impression. I haven’t discussed this with my agent.
Hi Allison,
I agree with much of what you say. I think it’s possible for an agent to, well, agent in the self-publishing world. And I agree–if agents can get more clout at Amazon/B&N than a self-pubbed author, this would make sense. It’s worth it to pay someone a percent if they’re making the pie bigger.
The only thing that I balk at is the author sending a check to the agent–not because I think that’s a bad idea, but because when I contemplate having to remember to do such a thing on a monthly basis, I cringe. It would never happen! I would forget and feel guilty. I know what happens with my utility bill.
But that’s a personal response, not a business objection.
And I completely agree with you that there must be a time limitation on it.
Courtney, very well said. Thanks for standing up against this craziness. There is a growing number of writers and writer’s organizations doing that. The conflict of interest, as you so clearly point out with very clear math, is stunning. And agents haven’t been working for authors since the publishers tossed all the slush at them. The agents business model has switched in the last ten years from representing authors to keeping publishers happy. This new idea just turns them even more away from their original mission of being the representative of writers.
One thing most writers don’t realize in this modern new world is how easy it is to sell books here and overseas and to Hollywood without an agent. And then get help from an IP lawyer on the negotiation and contract for a flat fee. Scary simple, actually. And it is very simple to electronic publish backlist, so writers can do that themselves as well.
So thanks for pointing this out and standing up against this clear problem. If it can be stopped now, all writers will be better off.
Well said Courtney,
You’re 100% right.
Dave
Hi Dean,
Thanks for the comments. I know that there are a lot of agents who I don’t think are very good. But I do think that there are a lot of them who are as well. I’ve seen too much of a difference among agents to categorically lump everyone together.
At some point, authors who work with an agent long enough know can figure out when she’s working for us and when she isn’t. If you’re an author with any reasonable commercial potential, you walk away from the agent who doesn’t work for the author. It’s not hard.
But when you find one who does work for the author, you hold onto her with both hands. I’m sure I could have sold my books without my agent. I’m just as sure I could never have run an auction without her. I’ve seen her stand up for me in contract negotiations on terms that we were both certain would never make a dime’s worth of difference on the royalty statement, just for the principle of it. And that’s just the very, very beginning.
So while I do think that some agents have demonstrated that they aren’t representing authors, I also believe that some agents are.
I’m rejecting one business model that some agents present, not everything that the profession does as a whole.
SL Clark put me onto this blog. Thanks, SL!
I am sure that scores of authors will fall for this gambit. Why? Because fraud can outrun the internet on most counts.
Thank you for this red flag. It looks like ‘retweet’ time. Go viral, little blue birdie.
Thanks, Emily.
But I think this is greed, not fraud.
I’d like to read Mr Victor’s response to this. Presumably he has a rationale worked out. I don’t believe he is a scam artist. Curtis Brown, likewise.
JB,
Again, I don’t think this is a scam, either. I think it’s a conflict of interest and a bad deal for the author. But I don’t see any way in which this plan involves a material misrepresentation of fact on the part of the agent–at least not one that has been disclosed.
It’s just a really, really crummy deal.
Wow, just wow. I think the way the industry is spiraling right now has left a lot of room for interpretations and some are still trying to determine value and relationship with Epub/self/trad. It is certainly more advisable to watch the contract language more than ever.
Courtney,
Point well taken.
Uhmmm…maybe ‘Buyer Beware’ and of course, agree with everyone on the READ your contracts reminders – it’s a wild, changing landscape!
Did not at all intend to imply ‘fraud’ in the criminal sense.