The Agent-Publisher Business Model: New Approaches to ePublishing Solutions

Lately, it seems as if you can’t read a daily or a blog without some commentary or announcement about literary agents who are now offering epublishing services (including the recently announced Trident E-Book Operations). Many agencies are creating publishing arms, and the concept has long been an issue, ever since Richard Curtis was drummed out of the Association of Authors Representatives (AAR) when he set up E-Reads over a decade ago. Born out of the desire to exercise digital rights to authors’ backlist titles for which the agency has reclaimed rights, most agent-publishers are now using these new arms to also publish original material. With many saying they are inherently a conflict of interest, agent-publishers inevitably bring looming questions of what effect they will have on publisher-agent relationships, not to mention royalties and rights ownership for authors. Though much of the debate can seem like constant squabbling over semantics, word choice seems essential in defining a business model that is so new and varied.

So who are these agent-publishers and what are their business models? As PT explored these questions, we quickly realized that the agent-publisher model is far from a one-size-fits-all construct; rather, agents’ publishing arms represent their efforts to keep up with the rapidly changing industry, and how far those arms extend from the agent body defines how pronounced they want either the agent or publisher role to be in their side ventures.

Though everyone seems eager to find new opportunities for their clients’ work and agrees that finding digital opportunities for clients’ backlist is a valuable service they can provide, ethical boundaries become murky with the temptation of frontlist properties. While publishers won’t give agents epublishing rights on new contracts, agents could abuse their position by “shepherding [authors] work to their own arm,” warns Jason Allen Ashlock, an agent for Movable Type Literary Group. While Ashlock agrees that agents exploring epublishing options for clients’ work can “raise awareness around a property or a property bundle,” he also specifies that defining an agent-publisher business model is “simply a matter of to whom the author is signing his/her rights.”

The AAR is also concerned with what agent-publishers mean to its guidelines. “The AAR is actively reviewing the serious and difficult issues raised by agents acting as e-book publishers and we expect to be issuing our conclusions in the near future,” says Gail Hochman, President of the AAR. “We will be looking at how an agent can work in this way and still adhere fully to the AAR Canon of Ethics.”

In the case of an agency like Movable Type that is looking to expand its services, third party distributors play an important role in epublishing backlist titles, in that some distributors offer services where distributors act as publisher. This allows agents to retain their position as mediator and negotiator, while an edistributor (like INscribe Digital, Movable Type’s distributing partner of choice) licenses digital rights for distribution on a revenue-sharing basis and remits royalties directly to the author (usually at a much better rate than with an almost carved-in-stone 25% of net receipts from traditional publishers). Ashlock believes this keeps ethical boundaries intact, as agents are still negotiating with outside parties, not themselves. The advantage to partnering directly with a distributor over now traditional digital publisher like Open Road is that, with a third party distributor, an author is “only signing over digital distribution rights,” says Ashlock. “Because Open Road is a more traditional publisher, there would be no flexibility to do anything else with that book.”  Some agents, however, do see opportunity in working with Open Road to publish their clients’ backlists, especially with built-in marketing campaigns and enhanced capabilities; Marly Rusoff of Marly Rusoff Literary Agency, for example, licensed the ebook rights to Pat Conroy’s novels to it.

In fact, Bedford Square Books, the recently launched epublishing and print-on-demand publishing arm of Ed Victor Ltd, works through Open Road. And whereas an agent like Ashlock looks for defined agent roles to structure services, Bedford is open to fluidity. For example, it does not have authors sign over their rights to Bedford Square Books, as with a traditional publisher. “If the author wants the rights back at any point—or what we hope will happen, a trade publisher materializes and makes an acceptable offer, then rights can revert back very quickly (a matter of a few months),” says Charlie Campbell, an agent at Ed Victor. “We will quite happily return to the role of agent.” Also working with digital production company Acorn to distribute/format materials and offering at 50/50 royalty split between Bedford and its authors, Ed Victor views its publishing arm as just another service it can offer its clients to give visibility to unsold properties/rights. Bedford released six backlist titles in September, including Edna O’Brien’s Tales for the Telling and David Scott and Alexei Leonov’s Two Sides of the Moon, and while the agency has not taken on new staff for Bedford, they have retained JK Rowling publicist Mark Hutchinson to market through social media.

Going even a step further in an agency using epublishing to show its commitment to serving its clients, The Knight Agency offers an epublishing program that offers to pay all upfront costs of ebook production (with the exception of copyediting) while only taking their standard 15% cut. Reserving this service for clients only and shouldering most of the upfront costs, this ambitious model will be an interesting one to watch as its first titles launch this Fall.

Digital distributors, often tied to digital service companies, are an important aspect of building agent-publisher businesses, as they offer solutions for creating ebooks and ensure that authors get their titles into the catalogs of etailers and libraries. Recently, Perseus announced Argo Navis for authors and agents, and Bloomsbury is also readying its own digital distribution service. Many digital distribution/solutions companies also offer services to help build marketing campaigns and allow agents to present their clients with a full range of publishing options, from Vook’s soon-to-be-launched author platform to Constellation’s Digital Discovery Services. With these comprehensive platforms, how does the agent remain relevant in the epublishing process, and what is keeping authors from epublishing themselves?

“Some of [the third party distributors] are offering services to agents only,” explains Ashlock. “They are attempting to preserve the relevancy of agents by allowing them to curate what’s best on the market and bringing it to the shelf.”

Authors may also rely on their agents’ publishing experience to help guide the publication process. “Clearly a lot of authors are going to publish directly [without an agent],” says Scott Waxman, whose Waxman Literary Agency has spawned Diversion Books. “The ones that are on the fence because they want a partner are going to want some of the same things they’ve always wanted: editorial feedback, staying on schedule, a good cover, real ideas about hitting their market, and effective royalty payments in a timely manner. Who is actually performing those services is evolving.”

These shifting dynamics are reflected by Diversion Books’ approach to the agent-publisher model, creating a full-fledged epublisher that publishes backlist ebook titles and frontlist fiction that might have struck out in the marketplace. In fact, the ‘agent’ aspect of Diversion’s agent-publisher status may be a bit of a misnomer, as only very small percentage of Diversion authors are Waxman clients, and there is no relationship between a Diversion or Waxman contract. Diversion even works with other agents and has acquired works like Roger Herst’s five-volume ebook Rabbi Gabrielle series and Kent Harrington’s Red Jungle from agencies like Goldfarb & Associates and Philip Spitzer Literary Agency, respectively. Also, aside from “doing a few things with Smashwords,” Diversion also distributes its ebooks directly to digital platforms in addition to providing marketing and publicity services, and it has already found some success with titles like Mike Leach’s Swing Your Sword, which was #5 on The New York Times Bestseller List within the Advice/How-to/Miscellaneous category and #15 on the Publishers Weekly Hardcover Nonfiction Bestseller List.

Joining Diversion in accentuating the publisher role in the agent-publisher model is the eprogram launched by agents Liza Dawson, Laura Dail, and Nancy Yost. Publishing only the backlist and occasional original work by its own clients, this collective epublisher uses longtime author relationships to build a brand. With a 15% royalty cut (and production expenses), these three agents are looking at agent-publishing as a collaborative process. “Because they’re ongoing clients, we have been able to be more informal about [terms of agreement],” says Liza Dawson, though she does point out that original content comes with more rights caveats and possible indemnity issues. Like Diversion, this e-program also does its own direct distributing. “There’s been a learning curve there with established Amazon and other platforms,” admits Dawson. “etailers are just more friendly; they understand bookselling and are making the books available everywhere. They don’t need an army of reps, they make things much faster, and as this is going on, Amazon and Barnes & Noble are getting more sophisticated. I’m feeling kind of wooed.” In fact, there has already been some success with the Nook when Robyn Carr’s Chelynne went to #1 on the B&N list two days after publication.

With the rapidly changing industry and increasing variations on the agent-publisher theme, the underlying questions are big ones: will agent-publishers change the game in publishing, and how profitable will it be? When it comes to whether or not a certain infrastructure will help streamline these agent-publisher businesses, it might be too early to tell since it’s hard to estimate how much money these ventures will generate. With changes in the industry happening so far, “we can’t base it on all we knew,” says Waxman. “What a standard epub royalty should be is still in flux.”

So as agents feel their way through the publishing process, every situation will warrant its own assessment. What all agents agree on across the board, however, is that serving their clients is key.

“You have to do this with an author who’s going to work as hard or even harder than you,” says Dawson. “It feels very empowering—this is something we’re doing together and it’s a brave new world.”

Leave a Comment

5 Comments

  1. Oct 7, 20116:50 am

    what a fantastically well written and interesting article. Thanks

  2. Dec 28, 201112:21 pm
    Lou Pike

    As a first-time author trying to understand the issues and options, this was an extremely helpful article. Thanks very much.

  3. Jan 9, 20124:58 pm
    Kimberly Lew

    Thank you for the wonderful feedback! Glad to hear this was useful!

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5 Trackbacks

  1. By Writing on the Ether on October 6, 2011 at 5:01 am

    [...] This Publishing Trends story sums up the state of the debate, cheerfully headlined The Agent-Publisher Business Model: New Approaches to ePublishing Solutions [...]

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