On Saturday, I alluded to the possibility of posts on some ideas I have for possible “successor” models to replace the existing “traditional publisher” model that predominates publishing today. Market forces are whittling away at that dominance, and publishers are struggling to find new ways to survive. Eventually, they will more than likely have to change to remain viable.
Today, I present the first (and possibly only, as so far this is the only idea I’ve come up with for an alternative) Publishing Successor Model. The format is this: I will begin by describing the Model, giving it a name and detailing the basic function. Then, I will offer an argument for why it will succeed. Finally, I will conclude with an argument for why it will fail. (If there are any future Publishing Successor Model articles, they’ll follow the same format.)
What it is: The Novel Venture Capital Model
How it Works: The model is based loosely on the way many small businesses in America today get funding, and how they are primed for success. The idea is that the mechanisms by which novels are screened and edited (and financed) are decoupled from the printing and publishing process. Instead of sending off query letters to publishers, novelists in the future will prepare short business plans (including a short summary of the novel, sample chapters, reviews of the finished work when available, an explanation for why the novel will succeed, target audience analysis, that sort of thing) for review by “Novel Venture Capitalists”.
NVCs, as we’ll call them, are a decentralized, loose network of angel investors and avid readers of some means who organize together to fund “Novel Ventures” for publication and distribution in exchange for an equity share in the business venture (potentially anywhere between 20 and 60 percent stake). Working with an NVC group gives an author access to that group of NVC’s network of distributed, experienced, and vetted freelance editors, artists, designers, proofreaders, and so on, as well as to established relationships between NVCs and the large, old-school printing, distribution, and marketing firms (today’s traditional publishers will become these, and will make their profit on a per-book-sold fee). An NVC group may work with a number of different printing and distribution firms, depending on the specific distribution channel (for e-Books, Hardcovers, etc.).
Because the primary role of the NVCs will be to screen and vet novels and novelists for publication, finance the venture, connect the novelists to skilled and experienced professionals who will manage the process, and then get out of the way and let the system work, the NVCs will develop a talent for, well, recognizing talent. Everyone else gets to do the part they’re good at, and nobody has to support the overhead of trying to cram all that talent together under one roof (most of these jobs can be done from freelancers’ homes).
Why it Will Succeed: Today’s new mid-lister authors will be tomorrow’s old guard, blockbuster novelists, replacing the current group as they pass away or retire. And these mid-listers/future-blockbusters will be increasingly disloyal and disillusioned with current traditional publishers even as their own names increase in brand recognition with the reading public. As the traditional publishers try to demand more and more rights from writers and offer ever-diminishing royalty rates in a bid for their own survival, these established and experience authors will revolt, seeking new opportunities in the open marketplace. They’ll seek ways to maintain all of their rights, bundled together and closely held, and only sell out shares of the potential profits: a business model that ties easily with existing network of angel investors.
Bereft of their big-name, tent-pole authors, the current business model of traditional publishers will suddenly implode as the reading public abandons them in droves. They are forced to divest unproductive assets and imprints in order to lean up and compete with the smaller printers that are lapping up the new business. The old publishers still have the means to do large-scale print runs the most economically possible. Their divested imprints have the marketing and distribution relationships needed to manage the book, the publication process, and ultimately success.
Writers get to keep the rights to their own work and keep on writing (even if they sometimes have to write business plans). NVCs reap huge hordes of cash when Hollywood moguls purchase licensing options for film adaptations.
Why it Will Fail: Typically, novelists are terrible at writing business plans, and have a general lack of business acumen. Real-world Venture Capitalists demand huge returns on their investments, on the order of 30% or more over a couple of years (for comparison, the stock market historically returns something like 8% in the long term). It’s uncertain whether the chance to fund (and get a share of) the next J. K. Rowling or Stephanie Meyers will be worth the risk of funding (and getting no return from) the next John. Q. Nobody (who is a more populous animal than the J. K. Rowlings) to business-savvy VCs. Plus, the idea is predicated on groups of VCs who love books and reading simultaneously coming up with this same idea and spontaneously forming networks. Heavy industry consolidation in publishing means the remaining players have a lot of power to manipulate the market for their own mutual benefit and to prevent their own demise. It will take some heavy defection from some really major tent-pole authors (we’re talking tomorrow’s Stephen Kings et al.) before all the old publishers will be in any serious trouble.
What do you think? How do you think the market and industry will evolve to solve today’s market and industry inefficiencies and problems? Let me know in the comments.