It's an Odyssey

The general definition of an odyssey is an extended adventurous voyage or trip, or an intellectual or spiritual quest. If you've kept up with news from the publishing world this week, you'll probably agree with me that this profession is on an odyssey right now, on odyssey of exploration of new technologies, new relationships and -- unfortunately perhaps -- new conflicts as the struggle for domination continues between the traditional and the innovative.

All right, I hear you asking how this week has been any different from the last year or so. Two things stand out, in my opinion. Both of these are indicators that the business of publishing has changed much faster and in ways that are rocking the traditional publishing business plan so badly that the little leak in the boat has become a flood. How the "agency plan" publishers react very well may be the make-or-break point for them.

The first item that caught my eye in the last week or so was Amazon's announcement that the first quarter sales for the year saw more e-books being sold than hard covers. Specifically, it announced a ratio of 143 e-books sold for every 100 hard covers. In the last month, the difference has increased to 180 e-books sold for every 100 hard covers. Is this the tipping point for e-books, I don't know. I think if it isn't, we are almost there. And, yes, that slight tremor you feel is the "Agency Five" quaking in their boots and trying to hide it.

To put that into perspective, the American Association of Publishers has released its May sales stats. Books sales increased in May 9.8% and sales are up 11.6% for the year. That's the good news:

The Adult Hardcover category was up 43.2% percent in May with sales of $138.5 million; sales for the year-to-date are up by 21.7% percent. Adult Paperback sales decreased 2.2 percent for the month ($110.7 million) but increased by 15.7 percent for the year so far. Adult Mass Market sales decreased 14.6 percent for May with sales totaling $54.6 million; sales were down by 7.3 percent year-to-date. . . E-book sales grew 162.8 percent for the month ($29.3 million), year-to-date eBook sales are up 207.4 percent. [emphasis added] Year-To-Date E-book sales of the 13 submitting publishers to that category currently comprise 8.48 % of the total trade books market, compared to 2.89% percent for the same period last year. . .

So, e-books for these 13 publishers total less than 9% of the market. However, if we were to take into account all books bought in this country, I have a sneaking suspicion that number would be much different. But that is just supposition on my part. However, the rate of growth for e-book sales by the 13 publishers who reported to AAP is telling. Yes, that tremor we felt earlier is getting stronger.

Finally, the news that turned the tremor into a full-blown quake has certain publishers threatening dire consequences. In case you haven't heard, Wednesday, Andrew Wylie announced an exclusive deal with Amazon to bring out 20 "modern classics" as e-books. Among the authors involved are: John Updike, Salmon Rushdie, Philip Roth, and Vladimir Nabokov. You can just imagine the roar that went up from the offices of publishers throughout New York. "These books are still in print. They are still under contract. They are ours! Oh, wait, there's no clause in the contract for electronic or digital rights. Well, that doesn't matter. There is language there somewhere that will cover it. We know there is. So, Andrew Wiley, you can't do this."

Yes, I'm being facetious here. But it does point out the problem facing publishers, authors or their estates with the changing of technology. These contracts written years, sometimes decades ago are out-of-date with the times. And the publishers aren't renegotiating. So agents are looking for alternatives for their clients.

And there is, in the short term at least, going to be fall-out not only for the publishers but for the agents and their clients, even clients who aren't involved in the Odyssey 20 deal. “The Wylie Agency’s decision to sell e-books exclusively to Amazon for titles which are subject to active Random House agreements undermines our longstanding commitments to and investments in our authors, and it establishes this agency as our direct competitor,” Stuart Applebaum, a spokesman for Random House, said in a news release on Thursday. “Therefore, regrettably, Random House on a worldwide basis will not be entering into any new English-language business agreements with the Wylie Agency until this situation is resolved.”

In Mr. Wylie's defense, if he needs to be defended, he noted in his announcement that the deal to bring out the Odyssey books was limited to those books where the publishers did not have the digital rights. “The fact remains that backlist digital rights were not conveyed to publishers, and so there’s an opportunity to do something with those rights.” This has been, in my opinion, an issue since the onset of e-books. If the publisher has the digital rights to an author's backlist, then why not bring them out, if for no other reason than as promotional tools for the newer books?

Needless to say, the industry is standing up and paying attention to what happens next. The "Agency 5" publishers are taking the hard line and saying that Wylie's actions are wrong and injurious not only to the authors but to the publishers and the industry as a whole. Some traditional booksellers are worried that this action is just the tip of the iceberg and will further erode their business. Agents are watching closely to see what happens -- some are probably acting like sharks attracted by chum, circling to see if any of Wylie's 700 clients jump ship -- while others are thinking about how they can follow Wylie's example for their own clients. Then there are the writers. We are a wide and diverse lot. You'll find any number of reactions from us. For myself, I applaud Mr. Wylie and his agency for what they have done. My only fear is that this will cause publishers to insert clauses into their contracts that give them digital rights -- no biggie here if there is reasonable compensation for the author. The key term being reasonable -- but that they will also amend the term "still in print" so that as long as a nominal number of digital copies of a book are being sold, it will considered "in print" for all forms of the book, thereby all but preventing the rights from ever reverting back to the author.

Some other links about this issue:
Galley Cat
Jason Pinter

So, what do you think? Did Wylie make a good move for his clients, all of his clients, or will this wind up backfiring? Should publishers be able to claim the digital rights for books that are "still in print" but were contracted before the advent of e-books and for which they have not executed contract amendments? Is this the tipping point for e-books?