Stop making sense

When I applied to join The Bookseller in the late 1990s, I was set a pre-interview task of analysing a set of publisher accounts to figure out why profits were being overstated. Back then it was common practice for publishers to put their author advances as an asset on their balance sheets, the sum reducing over time once the book had been published. I surmised that the publisher in question was failing to write down their advances over a realistic time period, meaning that sales were not being properly offset against costs. A prudent publisher will write down this cost of publication on publication, but in some cases it may be realistic to wait for paperback release or even further into the future should a book have legs. It is by manipulating the “even further” bit where profits may be plumped and misfortunes stored up for a future date.

I’ve no idea if I was correct. But I got the job anyway. Two decades on, and it may surprise some but broadly speaking the same rules around advances still apply, perhaps helping to explain not just why big publishing has got so, well, “big”, but also why during the recent antitrust case in the US between the Department of Justice and Penguin Random House, advances—in this situation those over $250,000—became the key focus, and subsequent talking point.

Simply put, providing it has the cash to make good its offers the bigger the publisher is the more able it is to make multiple big bets across a range of titles without it impacting profits in the short term. Providing a few titles chart, all might be well. Fundamentally, of course the model cements big publisher advantage (hence the DoJ’s case), but also as the agent Rachel Mills said this week the money, when paid out promptly, can help fund the writing of the book—“without good advances, writing can only be a career for the most privileged, independently financed people”.

That said, it needn’t have turned out this way. Spin back a decade and the argument was going in a different direction with Amazon, among other digital publishers, offering profit shares based on actual sales, and some agents arguing that lowered advances, allied to decent royalty arrangements, were actually a better way of rewarding writers in a way that was directly commensurate to the market. Personally, I’ve always found this approach a little Gradgrind. Advances are a little bit of make believe before reality bites. They can mean a lot, while also signifying more or less than we imagine.

Publishing is a correlation business that too many people want to believe is actually based on causation—if publishers really knew how to turn base metal into gold it would all be a lot less fun

The mistake I made before my interview was to believe I could make sense of all this, and if I have one criticism of the US court case it is that it wants to do the same. Publishing is a correlation business that too many people want to believe is actually based on causation—if publishers really knew how to turn base metal into gold it would all be a lot less fun. In that scenario, booksellers might as well pack up, reviewers go home, and readers form an orderly queue outside Argos-style book units.

Size enables the bigger publishers to reduce risk, it does not negate it entirely and despite the best efforts of many, including those publishers, writers, booksellers and even the readers, some big books still fail. It shouldn’t take can accountant to keep us honest about that.