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Richard Nash

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Richard Nash on a new business model for publishing

Richard Nash

Founder, Cursor

I’ve spilled much ink, and darkened many pixels describing the community dimension of Cursor, but I’ve had relatively little to say about its publishing dimension, in particular as it relates to established writers and the traditional publishing infrastructure. I have mentioned that we would be doing some classic indie publishing, but that’s gotten a bit lost amidst all the rest.

So let me say here: each community is also a publishing imprint, one that will publish one to two books a month. So, for Red Lemonade, the first community/imprint based on the Cursor platform, each of these books will be published digitally—both in the cloud, and as a download—and mechanically, as a limited edition and as a trade paperback original, this trade edition being distributed in the conventional manner by leading distributors around the world (details of authors, distributors, etc., to be announced at Book Expo America) and all editions being promoted with galleys, co-op, review copies, hustling, moxie, and my own brand of pimpin’ and hoin’. Why bother, why continue to participate in this old system?

First off, Cursor is a community business, a writer-and-reader-driven business. To eschew the format and purchasing preferences of the vast majority of our community is to do them an enormous disservice. It is not our job to decide formats; it is the reader’s choice.

Second, my previous company Soft Skull derived a great deal of its success from the support of, let’s say, five hundred bookstore clerks, freelance book reviewers, sales reps, and librarians, people who are, yes, part of the disintegrating supply chain, but who are also part of the vibrant and ever more dynamic book culture ecosystem.

The best way to enable them to get the word about our books, about our community, about our writers published and unpublished, out to all the readers and writers they talk to is by participating: by having our books sold into their stores, by having our books reviewed by their conventional media that helps librarians, booksellers, and yes, even readers make purchasing decisions, by having the books visible in those places most highly trafficked by avid book readers and writers, by making books available to readers’ advisory librarians.

I admit, it freaks the investors out a wee bit, participating in this expensive and barely profitable part of the business. We’re not selling to the trade to make money, we’re selling to the trade because we owe it to the community. (Plus, we’ve other ways to make money.)

But we wouldn’t be Cursor if we didn’t tweak this. And the tweak is pretty radical. It’s not really a tweak at all, it’s a complete break with publishing norms. It already rather freaked out Jack McKeown, former head of adult trade at both HarperCollins and Simon & Schuster, and founder and former CEO of the Perseus Books Group when I hinted at it during the Digital Book World conference in January. When I discuss the details at Book Expo America at the end of this month, it’ll likely freak folks like Jack out even more.

No more life-of-the-copyright contracts.

Instead: three year contracts.

Yup, from a contract that locks you in till seventy years after you’re dead, to a three year contract. Renewable annually thereafter. Which means after three years you can walk. Or stay, but stick it to us for better royalties because there’s gonna be a movie. Or stay with us because with all the additional formats and revenue opportunities we’re creating above and beyond what any publisher has to offer, you’re making more money than ever before.

You see, most publishers have accepted they’re not going to make money publishing your book. They’re publishing your book and a bunch of other books like it so they can have exclusive rights over as much intellectual property as possible. Such that if, three or five or nine years down the road, you win the NBA, or the Orange, or there’s a movie, or an Oprah pick, your whole backlist starts to sell but they don’t have to pay you one single extra red percent in royalties.

That’s where their profits come from, from being able to NOT have to renegotiate royalties when your books start selling better than they expected.* That’s what freaked out Jack (sorry for singling you out, man, it’s just you were the one that saw the implications for the old business model and spoke up…)

My wife’s an intellectual property lawyer and deals all the time with negotiating licenses for intellectual property in fashion, cosmetics, software, design. She’s negotiated for or against DC Comics, Disney, Mark Ecko, Chanel, Michael Kors, J-Lo, the Elvis Presley and Muhammad Ali estates and so forth in creating apparel lines, fragrances, resorts. These transactions don’t involve 100 year licenses, or 20 year licenses. They’re 2, 3, 5 year licenses, the underlying philosophy being that you’re together in business to maximize the revenues from the intellectual property and if the underlying value increases, you’ll renegotiate when the license is up for renewal.

Authors deserve the same terms.

The publishing industry is in a state of turmoil. New sales channels are arising, new formats, new terms of sale.

Authors deserve the chance to renegotiate as the industry evolves.

The number of books published has increased forty-fold since 1990, the number of readers has remained broadly static.

Authors deserve to be actively connected with readers, not just be made available to readers…

OK, so I just slid from contracts and terms and rights and royalties to more general business issues. I’m cheating in my rhetoric. But in the broader sense, the authors we choose to publish know they are publishing with us because we serve them best, by actively connecting them with readers, not because of civil law penalties for breach of contract. And we know we must serve them better than anyone, else they’ll be out of here.

Are there any catches? Only this: given how tight, focused, loyal and progressive our communities/imprints will be, and given the ease with which an author can renegotiate any and all rights, we’re seeking a fairly broad basket of rights in the license. Not necessarily film, because agents get pretty emotional about film, and frankly book-to-film agents know what they’re doing and tend not to miss opportunities, but in audio, in English-language outside the US, in magazine republication, in translation, in those licensing channels, each of our imprints is going to be more active and visible than individual authors or agents or general-interest publishers are going to be. When an imprint is as focused as ours are, foreign publishers, audio publishers, magazines etc, know to come to our distinctive stable of writers.

Moreover, not only do you maximize your licensing revenue through our model, the more channels we can use to reach readers, the more efficiently we can get you in front of readers, and the more ways we can offer readers to connect with you. We collaborate with those entities licensing from us so as to, in the phrase used in the magazine business, so as to “surround the audience.”

There have been inflection points in the history of the production of culture where business norms change radically. Oftentimes the baby gets thrown out with the bathwater. We think we need to maintain selective publishing into book retailers, we think that’s the baby. But the old contract is the bathwater. Away with it. Join the baby shooting out of the bathtub with the rocket wings. We are your leg up in the world. We are your platform. And you can still fire us.

*I’m semi-exaggerating. For example, under the 1976 revision of U.S. copyright law, authors (and all other copyright holders) are allowed to terminate transfers of their copyrights to publishers after a set number of years, with different provisions for pre- and post-1978 works. The U.S. Congress made such provision “because of the unequal bargaining position of authors, resulting in part from the impossibility of determining a work’s value until it has been exploited.” However, you can expect it to cost a minimum of $10,000 right now in legal fees to perform all the very complex filings necessary to accomplish this. And I don’t know how many other countries have such escape clauses.

Richard Nash

Cursor

Richard Nash ran the independent US publisher Soft Skull Press, now an imprint of Counterpoint, from 2001 to 2007 and ran the imprint on behalf of Counterpoint until early 2009. He is currently launching Cursor, a portfolio of niche social publishing communities. Nash explains more about the business model behind the Cursor publishing venture.

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17 Responses to “Richard Nash on a new business model for publishing”

  1. Kate Pullinger Says:

    May 11th, 2010 at 10:59 am

    This is a truly fabulous post. Full of excitment and passion, but also great ideas for breaking the current stalement on so many of these issues, while helping out/contributing to the crumbling distribution chain. It’s exciting to see a publisher thinking this way. Bring it on!!! Can’t wait for Cursor to get going.

  2. Anthony Says:

    May 11th, 2010 at 3:22 pm

    I really like this idea, but I don’t know if it’s without it’s inherent flaws. For instance, what happens if, within the 3 year license window, Cursor sells a foreign edition of the book? Are those foreign Publishers now required to give up their license in 3 or 5 years? Most foreign deals are licenses for a certain amount of time anyway, but 5 years is usually the minimum. So, would Cursor need to be sure it sells foreign the minute their license for the domestic rights begins? If a year into this license a foreign publisher approaches Cursor for the rights, but Cursor only has 2 years left, won’t that scare off a potential deal? If a foreign publisher only wants a 5 year license, but Cursor only has a 3 year deal with the author, do they have to say no to a potential deal?

  3. Kate Says:

    May 11th, 2010 at 3:53 pm

    Interestingly, this is another place where the erotica publishers are apparently ahead of the curve. Ellora’s Cave, Noble Romance, Samhain, and the like have been doing one- to three-year auto-renewing contracts for…well, pretty much the duration of their businesses. Granted, erotica has a short shelf life, but the Backlist Principle still applies here. This model is essentially what they’ve been doing all along – heavy introductory promotion, relying on backlist sales to boost revenue, and taking as many subsidiary rights as possible (audiobooks are a biggie for erotica publishers). Market those heavily, make it worth the author’s while to stick around, and 3-year contracts work out well.

  4. Mike Shatzkin Says:

    May 11th, 2010 at 5:37 pm

    Richard, I assume the clock starts on the three years when you publish, not when you sign. You want to make that clear and explicit. Obviously the conventional French or Italian or Dutch publisher you license translation rights to will be expecting a term longer than the less-than-36 months you have left when you sell them a book post-publication.

    Your author must be bound by that, right? Isn’t that a great complication in licensing those deals since Cursor is the licensor and then no longer has a valid contract with the author? What are the mechanics if the author fires you with sub-licenses outstanding?

  5. Julieta Lionetti Says:

    May 11th, 2010 at 7:50 pm

    Thrilling post. As to what happens in other countries, I can tell you that nothing is in the least like in Spain. Agents will never license a book for more than 5 years since the date of signature, meaning that, as a publisher, you have roughly 4 years ahead to make a profit.
    As to authors, my experience teaches me that, if they haven’t enjoyed a big success in the first or second publishing house, they will have to wait many, many years before they find a new home.
    It’s amazing the privilegies American publishers have had until now. No doubt New York is home town to the Big Six.

  6. Evelyn Rodriguez Says:

    May 11th, 2010 at 8:20 pm

    Thanks for laying out the details of Cursor. So you’ve said, “when I discuss the details at Book Expo America…” I’ll be there — when is your announcement/fleshing out happening? Thanks again.

  7. What is Cursor? Richard Nash Explains(ish) Says:

    May 11th, 2010 at 10:01 pm

    [...] Without giving too much away here, go to The Literary Platform for the whole shebang. [...]

  8. Midweek Miscellany | The Casual Optimist Says:

    May 12th, 2010 at 1:29 pm

    [...] “We are your platform” — Richard Nash, formerly of Soft Skull, talks about his new start-up Cursor at The Literary Platform. There’s something about this that reminds me of Factory Records in good ways and bad… [...]

  9. Richard Nash Says:

    May 12th, 2010 at 3:40 pm

    Thanks for the very useful comments! Some thoughts/responses:

    Mike, you’re right, three years from publication. To have it three years from the contract would result in far too much variance between writers, given how much contract-date-to-pub-date can vary from project to project.

    The question of other licenses arises from a few commenters. The brevity of our license does not preclude us from granting longer terms to, say, an audio book publisher, or an Italian publisher. In fact, the industry deals with these issues already all the time given that a book may go out-of-print and rights revert to the author, even though the book might still be in print in other countries per the terms of sublicenses previously granted. So we deal every day with the problems you describe, Those licenses would in no way be impinged. (It is, as I mentioned above, convenient to be married to an intellectual property lawyer who deals with far greater complications every day!)

  10. Ren Cummins Says:

    May 12th, 2010 at 6:55 pm

    Fantastic news! I’ve been very buoyed by all the groups staking their claim on the bleeding edge of New Publishing. It’s a very exciting time to be an independent author.

  11. Crosbie Fitch Says:

    May 13th, 2010 at 3:02 pm

    Given copyright is coming to an overdue end anyway (within the decade, let alone within the century), it makes sense for publishers who see the writing on the wall to ‘get the authors in’ quick = before they realise the publisher is redundant.

  12. Max Guevara Says:

    May 13th, 2010 at 4:22 pm

    Publishing agreements for a ‘short’ term… such a revolutionary idea! Publishers in my (developing) home country have been doing this for ages now – contracts with local authors are normally for 5 or 10 years. If a publisher suggested a contract for the term of the copyright the author would think they went mad!
    Actually, note that US and UK publishers don’t normally license translation rights to foreign publishers for more than 5 or 10 years… ;-) But try to suggest that the same should apply to their contracts with their authors! Well… looks like you have already tried. ;-)

  13. Max Guevara Says:

    May 13th, 2010 at 5:15 pm

    Btw, Richard is right about the contract for foreign rights not being bound to the original license (if the original license expires or is cancelled)… But I would suggest either a) putting a clause (in any sub-license agreements) making it clear that the contract should survive the original agreement or simply make the contract between author and foreign publisher including the original publisher as an ‘agent’ for that deal. Just to make things more clear. Wife might have better ideas maybe.

  14. Reinventing Book Publishing: Startup “Cursor” to Build Ebooks on Communities | The Buzz on Ereading Says:

    May 18th, 2010 at 1:05 am

    [...] to me is because Nash has decided that, unlike pretty much every other publisher in the world, to purposely limit the length of the contract away from “life-of-copyright.” As he notes, traditionally, when you sign a publishing deal, the publishing house controls the [...]

  15. You Get The . Info » Reinventing Book Publishing: Building Real Communities, And Only Holding Rights For Three Years – 4039th Edition Says:

    May 18th, 2010 at 3:30 am

    [...] to me is because Nash has decided that, unlike pretty much every other publisher in the world, to purposely limit the length of the contract away from “life-of-copyright.” As he notes, traditionally, when you sign a publishing deal, the publishing house controls the [...]

  16. Andrei Mincov Says:

    May 30th, 2010 at 7:56 pm

    Critics of today’s copyright laws often contend that instead of trying to control the use of their works through copyright, “old industries” must adopt “new business models” that would address the public’s desire to have unlimited access to content and impracticality of copyright enforcement in the context of the Internet. Usually adoption of such new business models is offered as a remedy for the growing number of copyright infringements.

    In my new article, Failed Business Models of the Past, Eh?, at http://mincov.com/articles/index.php/fullarticle/business_models/ (http://bit.ly/b2TceK), I explain why adoption of new business models has nothing to do with abandonment of the underlying principle that the owner of copyright should be allowed to decide how its content is used. If a business decides to use their property in an inefficient manner, it is perfectly OK to let such a business fail. We should not “save” this business by stealing from it the property that we think it uses inefficiently.

  17. Agents Need to Develop Alternative Models | Digital Book World Says:

    June 28th, 2010 at 3:18 pm

    [...] Agents need to innovate on contracts to keep themselves, as well as their authors, alive through the transition. Richard Nash has the right thinking in this area. [...]

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