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Publishing Times Are a-Changin' - If Art Klebanoff has anything to say about it...

We spoke with two veteran New York publishing personalities: literary agent and e-publishing impresario Arthur Klebanoff, and Myles Thompson, president of the recently launched business publishing house, Texere.

by Jim Barnes

News Item: "With electronic rights to countless books potentially at stake, a small e-publisher has won a second legal round against Random House Inc.," said a recent AP wire story. That small e-publisher is RosettaBooks, the company that is selling e-versions of Cat's Cradle, Sophie's Choice, and six other vintage Random House books. The U.S. Court of Appeals had unanimously upheld an earlier decision rejecting Random House's request for a preliminary injunction against RosettaBooks.

``It is a good day for authors and for the development of electronic reading,'' said RosettaBooks' chief executive Arthur Klebanoff. Klebanoff is a veteran agent and long-time advocate of authors' rights, handling the works of such notables as Michael Bloomberg, Bill Bradley, and astrologer Linda Goodman. His career is a beacon for today's authors and publishers, inspiring them to create multiple opportunities for success in a constantly changing world.

"In a world of ever-larger institutions, I have chosen to be on my own," observes Klebanoff. "My 'intellectual diet' is constantly changing, so my career path has been a series of unpredictable twists and turns. My fundamental goal is personal challenge, and with it the opportunity to effect change."

His book, The Agent: Personalities, Publishing, and Politics (Texere, January 2002), recalls a twisting career path that led from Harvard Law school, to the White House, to a New York law firm representing authors, where he worked on over 30 seven-figure book deals. He bought 50-year old Scott Meredith Literary Agency in 1993, and used his combination of education, relationships with talented people, willingness to take risks, and adeptly reading the market, to earn his book's moniker, "The Agent." Accounts of actions leading up to the Random House trial are included in the book, and the final chapters are as good a primer on Publishing in the New Millennium as you are apt to find.

Working with Arthur Klebanoff was a dream," says Thompson, who formerly headed up financial publishing at John Wiley & Sons. "Ironically, for an agent and publisher he turned out to be a perfect author. He was cooperative, realistic, pro-active and understands the industry."

The book world has been strongly divided over the lawsuit. Publishers Simon & Schuster and Penguin Putnam were among those backing Random House, while the Authors Guild and the Association of Authors' Representatives supported RosettaBooks.

Not surprisingly, Thompson and Texere are squarely on the side of the authors: "Authors are not only the creators of the work but often they become great partners in the sales, marketing and publicity processes. At large houses, despite the best intentions of everyone involved it is often difficult to keep authors in the loop and to take advantage of what they have to offer. We are author-focused and welcome the authors' contributions. They usually know a particular community well and we love working with them in a realistic and practical fashion."

Thompson has some refreshing views of his own on the State of Publishing: "It sounds trite but if the publisher does not add value why should the author come to a publisher at all, when producing the actual book is a fairly simple process? We help the author in the developmental process, always insuring the work coincides with the author's vision that was agreed upon when we signed the contract. We want the author's voice. We try to let the author run with their strengths and help them with their weaknesses. We are blessed to be in an industry dedicated to individual views and ideas that are widely disseminated. Our goal is to have the author the only one on earth that could write this particular book."

Myles Thompson

Yes the publishing times truly are a-changin... The 1980's, according to Klebanoff, was "the decade of publisher consolidation and the rise of the branded author," the 1990's became "the decade of more consolidation and the triumph of the branded author," and the 2000's will be "the decade of yet more consolidation and the ultimate power of the branded author."

"There are two communities of authors," he says. "First, there are the 'branded' big money authors, who in many ways have more power than even the most consolidated publishers. The publisher depends upon them. The bookseller needs their new title to help make their numbers. A company like AMS serving the warehouse selling clubs speaks in terms of better and worse years based upon the timing of release of these titles."

"Then there is everyone else, which numerically is nearly everybody. In a consolidated publishing world, these authors have less and less power. I think it is likely we will see standard contracts become less favorable, including on basic royalty definitions. Independent publishers who choose their authors because they care will take on more appeal to the professional writer who would previously only have considered a major house."

Enter an independent like Texere: "We don't see other publishers as direct competition," says Thompson. "Their success can create more space on the shelf for us. We believe we are part of the publishing community and are contributing to the overall community of business publishing."

"We are not paying as high advances as other publishers might be but we are acquiring the authors we want. In fact, our bestselling title's author did not receive any advance. Nassim Taleb, whose Fooled By Randomness: The Role of Chance In the Markets and In Life is an international bestseller, was much more interested in our committing to a promotion campaign that would allow his book to break out from all the titles we all publish than in an advance."

The Texere model seems to be working, although Thompson admits the trade bookstore marketplace has been pretty rough. "Hopefully it will improve significantly but we do have a lot of competition for a person's leisure time. Given the realities of the marketplace we have adjusted our publishing program a bit. We still want to bring business books out of their ghetto by publishing quality non-fiction in this category but we did find we need to lower the number of general business titles given how much harder it is to get traction these days and publish higher level an niche books."

Klebanoff feels that the agent community is parallel to that of the publishers, in that the critical economics for the agents are defined by the branded authors. "Branded authors, who will realize more and more their power, may behave more like music or movie talent," he says. "In other words, they are more open to changing agents. They may also be resistant to paying 15% commissions for ever more valuable copyrights."

"More mature agencies, like publishers, enjoy the cash flow from their backlists, but mining this backlist does not require much staff. Since it is harder and harder to sell mid-list books and they sell for smaller and smaller advances, the core of most agency activity will have declining profitability, the energy for the "new" will be yet more cynical and jaundiced, professional authors will perceive themselves (accurately) as receiving less attention and results and beginners will be yet more intimidated."

"The agent is much less likely to be the long term professional partner for the author of the future. For the few authors who do succeed, there may be a perceived need for a different level of service. For those whose career is not growing, there may be a wish to try a fresh approach."

Enter again, the innovative verve of a Texere: "We are blessed to be in an industry dedicated to individual views and ideas that are widely disseminated," says Thompson. "The overheads of the larger companies makes it difficult for them to rationalize a sales figure that may be acceptable for an independent publisher that keeps their costs low. Because you can operate from anywhere now, there are opportunities for lowering your overheads and utilizing freelancers and a smaller staff. This is why there will always be independent publishers."

Arthur Klebanoff

"There are two levels to the Random House - RosettaBooks dispute. One is the ownership of backlist electronic rights. The Authors Guild and the Association of Authors Representatives have been very supportive of Rosetta and very pleased with the results. The same has been true in London from the Society of Authors, who work from the house originally donated by George Bernard Shaw. Some more subtle future set of issues implicit in the dispute go to the heart of long standard author/publisher contracts:

1. Author/publisher contracts are typically exclusive for the length of copyright. Not many years ago that was an original term of 28 years with a 28-year renewal. Now the term is author's life plus 70 years. Publishers offer subsidiary licenses to third parties (book clubs, paperback, large print, etc) for terms of three to perhaps ten years. Yet they ask for effectively 100 years without an obligation of performance.

2. Publishers are 'bundling' electronic rights as part of the license of print rights - often refusing to license unless the rights are included. Then they typically 'warehouse' the rights, neither issuing them in their own program (assuming there is one) or licensing them to third parties."

Klebanoff feels that companies like Xlibris and iUniverse have been too quickly criticized. "On the one hand, trade publishers bring to market piles of titles the world can (and does) live without - imitative diets, self-help books, fifty tries mimicking the latest success in fiction, etc. In fact, anyone perusing the catalogs of a range of publishers can certainly ask how a range of titles 'made the list.' At the same time, many writers, with work of merit and no access to the publishing network, cannot get their work read, let alone published. Most of the books published by iUniverse and Xlibris will not 'make the cut' for mainstream publication. However, some will and some have. When companies like this take full advantage of their resources, they can begin to bring talented authors to market."

"In the final analysis, Print on Demand is another way to make a physical book. For the reader, POD delivers a trade paperback in your hand. For the publisher/distributor, the cost per unit for POD is quickly declining so that the economics are more and more attractive. As a practical matter, POD brings an ever-wider range of older titles to the reading public efficiently - and for narrow interest publishers, POD may even be the format for first publication."

"The same can basically be said for electronic delivery, when you limit the discussion to a book, which in the alternative would be printed or produced by POD - alternative delivery at a cheaper cost with more flexibility for the reader. POD may encourage some publishers, corporate users, governmental entities, etc. to consider 'publication' when before they wouldn't due to cost factors. One server copy supports conceivably multi-point POD delivery. At that point most anything can be a 'book' whenever and how quickly people like."

"Electronic publishing goes even further. As the software develops rapidly (MS Reader, Adobe e-reader, Palm Digital, Mobi-Pocket, etc) options emerge, such as instant high quality voice matched with text; 'on the fly' translations; and tie-ins to Web-based databases and the like. Definition of control of rights will be critical. The older the rights and the more they were licensed in a physical world, the more the underlying relationships will get reviewed."

Yes, everything is changing, but one thing remains constant - when it comes to publishing, be it tradition or innovation, the heartbeat of it all emanates from New York, as the upcoming BookExpo America convention will soon highlight.

"Publishing is to New York as the movies are to Hollywood," says Klebanoff. "The world shares in New York's work. Unlike the movies, authors are always 'on location,' only the executive offices are here. And production is wherever in the world you find the printer."