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 takingÂ 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.