Big Publishing Pretends Not To Talk About Risk

by Rich on January 4, 2012

In an interview with Digital Book World, Hyperion CEO Ellen Archer spoke candidly (for a CEO, at least) about the changes to publishing caused by the growth of digital media. It’s a good interview, and well worth a read.

Some of her points showed that she understood the concerns propelling indie publishers better than traditional publishers are expected to understand them. What interested me the most was around funding, sales, and advances. The quote which has been singled out is

We’ve been able to provide advances to authors and unfortunately most of those [advances] don’t drive revenue.

Most of the comments I’ve seen express severely burned bacon. Wading through the commentors’ sarcasm, the complaint with Archer seems to be based on reading this as distaste for having to pay authors. I don’t think that’s what she meant, and I don’t thing it’s fair analysis.

Most traditionally published books don’t earn out past their advances. There are lots of reasons for this which encapsulate many indies’ frustration with traditional publishers, but regardless of the reasons, it’s still true. An advance is exactly what its name implies: an advance against future payments.

Advances are important in publishing risk management for a simple reason. They transfer risk from the author to the publisher. If publishers are losing their taste for taking on that risk, the only one left to bear it is the author. I suppose you could devise some sort of “crop insurance” program for your novel, but good luck getting someone to underwrite it.

If the future of traditional publishing is to expect the author to take on more risk (which is certainly the case in indie publishing), authors ought to reasonably expect more return. That’s the balance. Risk vs. reward.

Ultimately, that’s the publishing calculus, for traditional or indie. Traditional seems primed to shift more of the risk burden toward authors. That means authors should be prepared to pull some of the reward with it.

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