“Flat is not an acceptable position. We are always expected to grow.” —CAROLYN REIDY, CEO OF SIMON & SCHUSTER
In its heyday, publishing was a vast array of mom-and-pop shops, in which the pops tended to be independently wealthy. Their competitive advantage was not efficiency or low costs but taste. Maxwell Perkins at Scribner; Bennett Cerf at Random House; Roger Straus and Robert Giroux at Farrar, Straus and Giroux; Barney Rosset at Grove; and Alfred A. Knopf epitomized the gentleman editor as gallerist, snatching up unknown geniuses. One British publisher advised an American at the time: “Take lots and lots of gambles, but small ones.” So they did. They took poor writers drinking, put them up in their homes, and defended them in court. They made handshake deals, spent their personal wealth in lean years, and built backlists out of modernist classics. Discovering Faulkner was like buying Picassos in 1910.
In the early sixties, Knopf sold out to Cerf, who sold Random House to RCA, and the era of consolidation began. Formerly independent publishers shriveled into mere imprints of massive corporations. Knopf became part of Random House; so did Doubleday and Bantam and Ballantine and dozens of still smaller shops now distinguished mostly by their names, like corporatized Broadway theaters bearing the monikers of long-gone cigar-chomping producers.
By the nineties, five big conglomerates were divvying up the spoils and their lucrative backlists. Many of the smaller companies that had been struggling, like FSG, Ecco, and Crown, were flush with corporate resources. But in exchange, they gave up final say in how they’d publish their books—or even what books they’d publish. And suddenly an industry accustomed to 5 percent margins was being run by media moguls aiming for double digits.
The corporations began by doing what they knew how to do: acquire, expand, diversify, spend. Sign up all kinds of writers, pay some of them a ton, market the hell out of them, see what sticks. It was the nineties, after all. A few books sold spectacularly, but more failed, and in the last ten years, the bill has come due. So today, the order comes down from beleaguered CEOs: More blockbuster books, fast. Which leads to cutthroat auctions and ballooning advances. You can’t win big if you don’t bet big.
“The system works just fine for commercial fiction. But for literary fiction, I think we had a nice run of it in the commercial world.”
Lately, the whole, hoary concept of paying writers advances against royalties has come under question. Following their down payments to authors, publishers don’t have to pay a cent in royalties, which are usually 15 percent of the hardcover price, 7.5 for paperbacks, until that signing bonus is earned back. The system is supposed to be mutually beneficial; the publishers guarantee writers a certain income, and then both parties share in the proceeds beyond that level. But it only works for publishers if they’re conservative in their expectations. As auctions over hot books have grown more frequent, prudence has gone out the window— paying a $1 million advance to a 26-year-old first-time novelist becomes a public-relations gambit as much as an investment in that writer’s future.
That money has to come from somewhere, so publishers have cracked down on their non-star writers. The advances you don’t hear about have been dropping precipitously. For every Pretty Young Debut Novelist who snags that seven-figure prize, ten solid literary novelists have seen advances slashed for their third books.
Of course, back in the boom nineties, the corporations themselves were pumping up the expectations of midlist writers. Consider Dale Peck. His first novel, Martin and John, came out in 1993 to excellent reviews, and by his third book, in 1998, he was, by his own account, wildly overpaid. Books, he says, “were like Internet stocks, getting enormous advances without demonstrating any moneymaking whatsoever.” Having rarely sold more than 10,000 copies, he took up with superagent Andrew Wylie, developed a reputation for being a “diva,” and pretty soon couldn’t sell a book to save his life. Until he started specializing in genre fiction—first children’s books, then horror. Last year, Peck sold Body Surfing, a thriller about demons exiting people through sexual release. He’s now splitting $3 million with Heroes writer Tim Kring to produce a trilogy of conspiracy thrillers.
Peck sees an increasingly hostile environment for the kind of books he used to write. “When you get $100,000 for a novel,” he says, “you want $150,000 and then $200,000, so when they pay you $25,000 for the next one, and my rent is $2,500 a month, what do you do? The system works just fine for commercial fiction. But for literary fiction, I think we had a nice run of it in the commercial world.”
The good fiction that does manage to snag a stratospheric advance is mostly either a follow-up to or a knockoff of a freak hit. The astonishing success of Charles Frazier’s Cold Mountain led to a bidding war for his second book, which Grove/Atlantic editor Morgan Entrekin lost with great regret to Ann Godoff at Random House’s eponymous imprint (known as Little Random). Lucky him. The price tag, more than $8 million, might well have sunk Grove, one of the few biggish independent houses left, because Frazier’s follow-up, Thirteen Moons, sold less than 500,000 copies, according to BookScan. Ann Godoff was fired not long after the deal was made. “It is possible they broke Little Random’s neck,” says one agent. “Frazier’s wife will not have the luxury to buy another racehorse.”