Regular readers may recall a few weeks ago this post, in which I go on about a possible “successor model” to the way publishing is done today. Well, a friend from class clued me in late last week to this:
I’ll give you a minute to go check that link out. Okay. Done, now?
So, for those of you who didn’t click the link, here’s the gist: Dutch website “Tenpages.com” has created a partnership with several publishers (presumably Dutch ones) in a venture that allows the users of the site (who act as investors on a virtual market) to decide which books sourced through the site will get published by buying “stock” in that book.
Sound familiar? If you were here a few weeks ago when I posted about my “Novel Venture” concept, you might be thinking “yeah, that does sound familiar”. The ingenuity of this site, it turns out, is that, well, it’s a website, and takes that whole “building up a community of investors” problem out of the “Novel Venture” concept I proposed by establishing a virtual place for that community to gather. Frankly, though, I’m surprised that someone else (albeit in Holland) had almost the same idea, and is actually finding a way to make it work. I was ambivalent enough about the chances of my idea proving successful that I wasn’t sure anyone would ever try it, so imagine my surprise to learn that someone already has.
The biggest drawback that I see to this site, however, is that it offers writers and investors only a 10% royalty/share of profits each. In normal publishing contracts, the writer gets roughly a 20% royalty rate (actual rates vary, but 20% seems about average), so a 10% rate is pretty low. In other words, this is only going to attract brand new, unproven authors. And those authors, if they grow successful, are going to want to renegotiate their contracts.
From the investor’s perspective, the 10% rate is also too low. These are the people putting up the seed money to get the venture started. Although, to really analyze whether that share is really too low or high, I suppose, the amount of the seed money will need to be compared to the amount the publisher is kicking in. The investors need to be justly compensated for the degree of risk they’re taking on, and it matters which party is bearing the majority of that risk.
Overall, I think the idea is a very intriguing concept. I wonder if it can work here in the States. And I wonder how long it will take someone here to try. I think the idea has to work a few kinks out if it’s going to prove successful: the amount of seed capital needed to get a book off the ground and get a publisher on board, the royalty and returns offered to writers and investors, etc. will all need to be fine-tuned.
Thoughts, dear readers?