HarperCollins Publishers is forming a new entity that is set to make some big changes in the traditional relationship between publishers, authors and booksellers. According to the New York Times, it will work this way:
Author advances and bookseller returns are two issues that have long troubled the publishing industry. Best-selling authors can command advances that are so high that publishers often come away with slim profits, even for books that are major successes. Publishers also offer high advances to untested authors in the hopes of creating best sellers, but often those risks do not pan out.It will be interesting to see how this works out for this new segment of HarperCollins. I gather from the article that the group will only publish a certain type of book for what is called the "low end of the market." The examples given do not particularly appeal to me as a reader but I'm intrigued by the possibility that e-book and audio copies of the books might be included at no extra charge with purchase of the hardcover version of the books.
Ms. Friedman said the new group, which will start by publishing 25 titles a year, will offer “low or no advances.” Mr. Miller said he hoped to offer a profit-sharing plan in which both publisher and author would split the net profits.
Under current standard practices, booksellers can return any books they do not sell, saddling publishers with the high costs of shipping and pulping copies. Mr. Miller said that by eliminating returns, the publishers could share any savings with authors.
The publishing industry is searching for a new business model, one that works for everyone involved in the process, including customers. I imagine that other companies will be watching this one closely.