Do agent-publishers carry a conflict of interest?

How agent-publishers came to be, and what they mean for the publishing world.

The shift in the digital publishing landscape is changing more than formats and production processes — it’s bringing new positions with it, too. One of the most noteworthy new jobs — and perhaps most controversial and contentious — is the emerging agent-publisher role.

To find out more about what agent-publishers mean for established publishers, authors, and agents, I turned to Booksquare’s Kassia Krozser (@booksquare). She says the agent-publisher position rose out of the refusal of traditional publishers to adjust their business models. “Traditional publishers need to not only rethink how they sell their value to authors and agents,” Krozser says, “but they also need to rethink the economic structure of their deals.”

The agent-publisher isn’t a squeaky-clean solution for authors, however. Krozser is concerned the position might come with an inherent conflict of interest.

Our interview follows.

What is an agent-publisher, and why is this new position emerging?

Kassia_KrozserKassia Krozser: The first part of the question is fairly simple: an agent-publisher is someone who fulfills both roles. The second is even easier. Agent-publishers are emerging because, well, traditional publishers couldn’t or wouldn’t twist their business models to meet the market realities. Agents, smartly, saw a business opportunity in the desire of authors to make reasonably good money from self-publishing. Agents also recognized that authors do not necessarily possess — nor necessarily want to assume — the functions publishers fulfill.

Traditional publishers try to coax these same authors into their existing structures. This, I think, is a mistake on the part of traditional publishers because they’re having a difficult time articulating the value proposition to these authors. Think about the choice authors are making: 70% royalty for self-publishing, 25% royalty for going with a traditional publisher. Then add in agents who realize they can offer a suite of services while still allowing authors to do better than they would with a traditional publishing house, for a 15% fee.

I should note that this phenomenon is mostly geared toward backlist titles, though some digital originals are emerging. And because it’s backlist, the economics weighed by the authors — and the benefits — are very much skewed toward self-publishing or going agent-publisher.

It’s not like the distribution and marketing are all that different.

How are agent-publishers disruptive to the publishing ecosystem?

Kassia Krozser: It’s disruptive because backlist is incredibly lucrative, and backlist for digital means additive sales, in the sense that readers are buying favorites from their existing print libraries in digital. Publishers don’t want to lose control of the digital backlist. These are titles that have (likely) earned out, so the investment in converting to digital, for a traditional publisher, is peanuts. The potential profitability of the book is quite nice because, in digital, books remain on the shelf forever — which isn’t great for the authors if the royalties are low.

So, if authors or their agents take these properties and exploit them, then there goes a steady, predictable, and profitable revenue stream for publishers. As readers shift from print to digital, the shift of these sales from publisher to author/agent — I am using some terms interchangeably — is profound.

This will increase a prime tension: publishers want to acquire as many rights as possible, for as long as possible; agents want to retain as many rights as possible while licensing other rights for as short as possible. What to watch for in the near future is how the balance of power shifts.

In my opinion, traditional publishers need to not only rethink how they sell their value to authors and agents, but they also need to rethink the economic structure of their deals.

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Is the agent-publisher arrangement a viable service model?

Kassia Krozser: I’m torn on this point. I completely understand why agents are moving into this marketplace. I am also concerned about conflicts of interest. If I’m an author and my agent is selling to traditional publishers while also creating a profit center around digital publishing, can I be certain my best interests are being considered?

On the other hand, it is currently the case that traditional publishers are not willing or able to pay market value for these backlist books. And it is very hard for authors/agents/innocent bystanders to discern what value is added by these publishers. The quality of ebooks from traditional publishers is sub-par — oh yes, I can point you to examples — marketing is negligible, and cost of conversion is minor (I am assuming the books the traditional publishers care about have earned out and then some).

So, authors have three choices: DIY, agent-publisher, or traditional publishers. DIY means the author has to employ a lot of new/uncomfortable skills (please authors, you are not as good at conversion as you think you are). Agent-publisher means you have someone doing those jobs for you at a 15% rate, plus, possibly, expenses. Traditional means you have someone doing that work at a 75% rate.

So, yeah, agent-publisher is a viable business model. But it’s also an opportunity for others to move into the space — non-agent publishers who can offer rates and services on par with agents. For example, I am seeing small, and growing, author collectives springing up. In these, each author is his/her own entity, handling conversion, formatting, and proofing on his/her own. But the group markets collectively and has a single point of sale, with, presumably, someone managing the distribution of monies. While this creates work for these authors, they also don’t have to pay the agent a fee. More of these sorts of arrangements would help me get past my conflict of interest issues.

This interview was edited and condensed.

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