Money Rehab with Nicole Lapin - The Dark Side of Publishing

Episode Date: September 13, 2022

Today is all about the book biz. Nicole covers (pun always intended) everything she wishes she knew when she was putting her first book deal together: from advances, to agents, to *achem* verrrry similarly titled books. If imitation is the sincerest form of flattery, consider Nicole extremely flattered. To help her on this demystifying mission, Nicole is joined by the lovely Bethanne Patrick, literary critic for The Washington Post, The Los Angeles Times, The Boston Globe, The Atlantic, NPR, and the host of the new podcast Missing Pages. To listen to Missing Pages, click here: https://link.chtbl.com/M8oj-eXh?sid Check out Association of Authors' Representatives here: https://aaronline.wildapricot.org/ 

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Find a co-host at Airbnb.com slash host. Hey guys, are you ready for some money rehab? Wall Street has been completely upended by an unlikely player, GameStop. Are you ready for some money rehab? Wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. On the show, I've talked about the music publishing industry, but I have not yet talked about the wonderful world of book publishing.

As you're about to hear, demystifying the world of book publishing is something I am very, very passionate about as an author who has navigated this very confusing process of birthing a book or books into the world. To help me in this demystifying mission is Bethann Patrick, literary critic for The Washington Post, The Los Angeles Times, The Boston Globe, The Atlantic, NPR, and now the host of the new podcast Missing Pages. Let's dive in. Bethann, I'm so excited to say welcome to Money Rehab. Thank you, Nicole. I am delighted to be here. I think what you do is the bomb. So I think what you do is the bomb. We're talking about the book biz. That's right. This is the bomb.com. It really is because money and the book biz. Well, as we're going to talk about, it's a little complicated. It's not exactly an easy discussion. But I think in talking, we can really help a lot of people. I agree. I think it's a black box. I'm super passionate about illuminating all things money.

This one in particular, because there's a lot of things I know now that I wish I had known when I was first putting my publishing deals together. And here on Money Rehab, I am all about, of course, making sure that our listeners do not make the same mistakes I did. I made many, many, many mistakes. And I've made many. Who hasn't? The only problem you can't fix is the one you don't admit you have. That's right.

And that's why Money Rehab and any kind of rehab starts with admitting you have a problem. And there's a lot of problems in the publishing world. So let's start with the most important topic to get into it. Bethann, can you break down how authors and writers make money? Well, you've published so many books so successfully, Nicole. You know that a book is a really important thing for people, even people who have already done incredible things. They've won Olympic gold medals. They've made a fortune. They've, you know, I don't know, found the pyramids of Egypt, but people still want to write books. And that's

because books are a really direct link between reader and writer. Okay. Here's the problem. Readers don't think of the money they spend on books as being something that goes directly to the writer. So a lot of people tend to, you know, someone who will easily buy a $7 latte will say, oh, that $14 paperback, that's too much. And they don't think about the fact that someone has to make money from this. So does that make sense? Yes, absolutely. And I think unlike many other endeavors in life, writing a book is on a lot of people's bucket lists. It is on a lot of people's bucket lists. And here's the thing.

So you want to have a book. Maybe you've got a novel you always wanted to write. You hopefully get an agent and then the agent sells your manuscript, which is, of course, fantastic. And the agent sells it and, which is, of course, fantastic. And the agent sells it and gets an advance for you from a publisher. Now that advance money, let's say it's $50,000. You don't get a check for $50,000 the next day. They don't sell you $50,000. They usually divide it up into quarters. So that money though, isn't just like, we think you're great. Here's some money. That is actually an advance against your future sales. And so if you

earn out that money, if you sell enough copies and that equals $50,000 at 10% a copy. So you're making $2, let's say, on a $25 book. So however many copies you need to sell to make 50K, then you start getting royalties, then you start getting sales money. And, you know, I just recently, we're going to talk about the DOJ Penguin Random House trial in a couple of minutes. But one of the authors who testified there said, you know, I don't actually care about how much my advances are. I really care about sales because that's your real money as an author and writer. And when you say, I'm not going to buy that book because I can borrow it from a friend

or, you know, whatever. That just means someone who actually worked hard to put that book together is not getting paid. Yeah. And not to get too in the weeds, but there are expenses that you have to recoup before you even see more than the minimum guarantee. see more than the minimum guarantee. And there's a lot of really interesting accounting that happens that I've only figured out now that I'm on my fifth book that I wish I knew in advance, no pun intended. But there are some philosophies around having a lower minimum guarantee or a lower advance. For one of my books, I actually took no advance and I took a bigger part of the back end, which was a bigger bet on myself. But yeah, it's not money that you're just getting free and clear. There are strings attached. I want to double click, though, on the agent part of what you said.

One of the biggest things I hear from people who have a book in them or up and coming writers is people who have a book in them or up and coming writers is how do I get that agent? So I am not shy about my sordid, crazy story of like it took me 10 years and four different agents and four false starts and all these things to like finally get a book deal. It wasn't rainbows and butterflies. But what what's your advice to somebody who wants to start? You said hopefully they have an agent. How do they do that? The first place to go is the Association of Authors Representatives, the AAR. And that is a great website of people who are literary agents who meet the ethical and professional standards that agents should. They are sort of vetted. It's not exactly the same as becoming a neurosurgeon, but still, these are people you can trust. They do business well with publishers and other agents and other

writers and authors. The other thing you could do, depending on what kind of book you're working on, is reach out to other people who have published. And if you don't know anyone or you're really shy, one of my all-time favorite tricks is go to the shelf in your favorite bookstore where the kinds of books you're writing reside and just go through and look in the acknowledgements and see the agent names. You know, you're not going to find their cell phone numbers there, but you will usually with a name be able to find a website that will show you where to make a pitch, how to make a query, you know, all of that sort of thing.

Really smart. Yes. Steve Troha, my final book agent. He's the best partner at Folio. I put a ring on that one. It took me a while. It took me a decade. But yes, he is in he's the top, I guess, of all of my

acknowledgments. That's that's a really clever way to find out who your favorite authors, agents are. So just to decode that when it comes to advances, I've always also been very transparent about my advances, what I make, all my salaries, because this is the business I'm in. So in my books, it's kind of meta. I talk about how much I made for my advances, because I just assumed somebody would be curious, I would be. So I put them in. But what is the typical, I suppose, like way the advances are calculated for new writers, for veteran writers? What ballpark of advance should somebody expect? This is my favorite because there is none. What's so crazy is that as we heard during the trial from publishers,

agents, and editors, sometimes someone says, I just really think that this book is going to blow up. I want to pay a big advance. And maybe they're really persuasive, right? And so their boss, the publisher, the head of the publishing group will say, go ahead. And the other thing we learned during the trial is that this makes sense. Each person at a certain level has a certain spending capability. So an editor may be able to approve up to $50,000. Then the editor's editor-in-chief might be able to approve up to 100K and so on and so forth till you get to the CEO of Penguin Random House, and she has to approve anything over, I think, 250K, not, don't quote me on that, but then if it's over 500K or a million, then the head of Bertelsmann, Marcus Dola, has to approve what Madeline McIntosh, the CEO of Penguin Random House,

says. So everyone's got a different limit. And that seems like most corporations in a way. But there's so much play in each of those little areas because it depends also on things like production standards. Is it going to be a paperback, a hardcover, big, small, fancy, plain, that kind of stuff. Yeah, I found this out the hard way that there's while there is a lot of organization and decorum and pomp and circumstance and all that, there's really no rhyme or reason. It really is the Wild West when it comes to the money part of getting a publishing deal. part of getting a publishing deal. And the lawsuit, just to clarify that you're referring to, is the Justice Department filed a suit to block publisher Penguin Random House's acquisition of Simon & Schuster. Correct. So why does this suit matter? And what does this show us about the dark side of publishing? This suit matters for a couple of reasons. I think a lot of people, including our friend Jeff Bezos,

use books as a kind of kindergarten step. I worked as the books editor at AOL back in the dark ages. And, you know, basically people experiment with books because it's easy to do that, right? Books are something you can classify. Books are something that can be sold or not. And they're easy to try things out with. You could try a video. You can try this. You could blah, blah, blah. So with this, I think the DOJ is becoming concerned about monopoly and monopsony. Here's what the difference is. And this is why it's important. A monopoly, remember, we all learned that about the robber barons of the 19th century. They controlled access to all sales of coal or steel or the railroads. A monopsony is when you control access to buying something instead of selling something. And so the DOJ is saying to Penguin Random House,

if you buy Simon & Schuster, we are worried that there will be fewer markets for authors, that you will just be one monolith and all books will have to be sold through you. Now, Penguin Random House says, we want to keep Simon & Schuster by itself. We want to keep them independent. We want to keep this great publishing brand a publishing brand. But DOJ is kind of like, hmm, we going to be a slam dunk. Penguin Random House was going to win. They were going to be able to buy Simon & Schuster, which has been in some dire straits for a while, both financially and structurally. And that was going to be so great. But then the judge, Florence Pan, is so brilliant. And she kept digging deeper and deeper and finding out what was really going on. And here's the bottom line. It doesn't really matter for the high earning top selling as they termed them authors. What it really does matter for are the mid list authors. And it is going to be more difficult for

mid list authors to have different markets for their books if this goes through. So in October, we'll see what the judge determines. And I think the thing that's been left out of all of this, Nicole, is the reader. No one's asking about the reader and what this means for book prices. And maybe they shouldn't be. But I just think because we're money rehab, we should be able to talk about things like that, that people do want to spend their hard earned income on like books. Well, that would be the monopoly side of it, right? Because they would be selling

and they would have a majority of the market share, I assume there's also HarperCollins and others, but this would be a big acquisition. Yes, exactly. Exactly. So it is pretty crazy to think about what will happen because if they don't acquire Simon & Schuster, Simon & Schuster, some people say they're going to be fine. Other people say if Simon & Schuster is bought by a private equity concern, that they will just collapse because they already have so many internal problems with their marketing is very bad and they have a lot of managerial concerns within the company as well.

So we shall see. If we step back for a moment, how do publishers make money? You said that Simon & Schuster was struggling. A lot of publishers have been struggling. What are some of their biggest expenses and revenue streams and what's come out of this trial that surprised you? Well, one thing to quickly pick up on is what you were just talking about with supply chain problems during the pandemic. You know, a lot of people probably saw the story about the ship that went down with all the cookbooks on it, for example, just lost on its way, you know, to whatever port it was going to go into.

So a lot of printing production and paper manufacturing is done in Asia, particularly in China. And so, for example, publishers with really beautiful photography books or design books, which include cookbooks, coffee table books, children's books, all kinds of different volumes, have been experiencing terrible, terrible supply chain problems. And that has made it really tough for all the other aspects of publishing. The real money in publishing is that it is based on something very strange that you know about, Nicole, but not everyone does, which is the returns model. Publishing is like a consignment business. Now, everyone knows what consignment is you know

with clothes or furnishings and things like that it means you're selling something and you're not getting the entire profit because someone else is selling it for you so the booksellers are the consignment shop your book is the consignment product And if the consignment shop doesn't sell all the books, they are able to return them to the publisher. So this is crazy, right? You think you've sold 500 books. They've gone to all of your favorite bookstores, but only 10 people buy copies. Those bookstores are shipping 490 books back to the publisher. How are you going to make money with something like that? This is the craziest thing.

I mean, bookstores are returning books to publishers, not consumers. We're not talking about someone saying, you know, I bought this book, but my mom already gets a copy. We're talking about big pallets full of books being returned because this is some old style idea that took root at some point in the 19th or 20th century. I need to look more into the history of that, Nicole, but it is a really crazy model. If you ask me to run an entire industry on, especially an industry in which the products contain our ideas, the very foundation of our democracy and country. It's all about ideas and discussion and concepts. And that's what books hold. I couldn't agree more. Unfortunately,

the bookstores are struggling as well. But this model is wackadoodle. It's not like if you have a theory, you know, shipment to Bloomy's, they can just like ship it back or to some department store, right? They sell it on their outlet or they put it on sale, or they have to get rid of it in one way or another because they bought it. Hold on to your wallets, boys and girls. Money Rehab will be right back. I love hosting on Airbnb. It's a great way to bring in some extra cash. But I totally get it that it might sound overwhelming to start, or even too complicated, if, say, you want to put your summer home in Maine on Airbnb, but you live full time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you.

Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you. I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself.

Find a co-host at Airbnb.com slash host. Now for some more money rehab. And I want to bring up something, Nicole, your boss bitch title. And it's such a great conceit that you came up with for your books. And I know that there might be someone out there who has similar title. Yes. Recently, a woman who is on Netflix's hit show Selling Sunset named Christine Quinn came out with a very similarly titled book called How to Be a Boss Bitch. And I was overwhelmed with notes about this from friends to followers to people on my team. Like, have you seen this? And honestly, I haven't talked about this publicly yet, but I was shocked to see it. I was confused about why that

was even legal. And then I went through some of the hoops to figure out if there's anything I can do to protect this IP of a book that I had come out with in 2017. I was surprised, Bethann, to learn through this experience that there's not a lot of book protection for book titles. You can literally write a book about a whale and call it Moby Dick. And that is completely legal. You are correct. Can you make this make sense to me? You are correct. That is completely correct to call a book Moby Dick if you like. If you're writing, you could be writing

a book about a whale or about Fudgy the Whale, the Carvel cake. You could still call it Moby Dick, right? Why is that possible? It's ridiculous. And you'd have to ask, you know, the United States Trademark and Copyright Office, Nicole, you have all my sympathy, but I want you to know you're not alone because even big time authors like Stephen King face this. He wrote a book called Joyland. And this was, I want to say 2017 or so, or maybe it was earlier than that, 2014. I'd have to check. But there was a woman who had written a book called Joyland several years before that. And her book was much smaller, much quieter. All of a sudden, she gets a sales bump because people are like Joyland. They're typing it into Amazon and just

buying the first thing that pops up. So that's the really raw end of the deal. It's kind of fun to think of a smaller author getting a little bit of a lift from Stephen King. But at the same time, you know, it's frustrating when you choose a title and you know you love it and you know it just is perfect for your book and someone else just runs right over you. I wish that there were a solution to this. And I think this is just my personal opinion, not the publishing industry's dictum. But I think that that woman who decided to use something you'd already been using was wrong. Come on, do a little Googling, find out, you know, if I'm going to call a book by title X, I'm going to make sure I see what else is out there with that title on it. And if you are arrogant enough to think you can just use it because maybe you

think you're better, that's bad behavior. It's not playing well with others. I agree. And I've struggled to figure out how I feel about this because, as you know, I've built a career about empowering other women and propping them up. And I didn't want to come across as catty and say, hey, you stole my title. But I did put a significant amount of time, money and energy into building out this IP and promoting it and making it the phrase that it is today. And by the nature of the title, only a woman could steal it. So this isn't, I think, steal it. So this isn't, I think, a story of a woman taking down another woman for, you know, funsies, but somebody saying, hey, you took something that I made really valuable.

Well, exactly. Exactly. And that's the thing is taking something that someone else has made valuable, added value to, and co-opting it for yourself. And of course, Missing Pages, this podcast that I'm hosting, we're examining bad behavior. We're looking at these kinds of incidents and we're saying, what is here in our industry that still allows the bad behavior to go on. So why shouldn't there be a way for an author to take a concept and use that intellectual property, as you said, and protect it? You know, there's got to be something, there's got to be different ways to think about these things. And I know we're less on the money side and more on the IP side right now. But the IP is what leads to the money. That's correct.

Correctamundo. And I think that you're spot on with saying that there's this unstated rule in the book world. I've had a bunch of book title ideas over the years. And the first thing I do is search if there's another book of that title. And I don't want to have somebody else's book title. So I go on to the next idea. It doesn't even occur to me to say, yeah, I should just use that other person's book title. But there is no legal reason that I couldn't, which I found out later by speaking with lawyers. You can't copyright or protect a title for whatever reason. You can only protect yourself

if there are actual passages within the manuscript that are plagiarized. And so whether, you know, it's a cool thing to do or not, I think it's an uncool thing to do. It is, unfortunately, a legal thing to do, which gets us to this idea of like the spirit of a deal versus the deal itself. You know, what's the spirit of the book publishing world versus what's actually legal and codified that you're able to do. And this is well within the gray area. It is well within the gray area. And part of the problem there for any aspiring writers or authors out there is the fact that publishing is an industry based so much on trust and relationships. And so you have to trust someone a great deal in order to have them read your

manuscript, you know, and not run away with that idea. I know one of the things that really sets professional writers and authors apart from first timers, let's say, is a first timer might send a manuscript, whether it's via, it should be via email at this point, but there are still people who use snail mail, right? And they will put all over it. This is my work. This is the work of, you know, James F, you know, whomever, um, do not copy, do not steal. This is why it's so important to go to reputable agents and publishers, because that is one of the things that you are supposed to be guaranteed, at least within your publishing imprint, is that no one's going to steal the idea. No one is going to take that manuscript and run and give it to

someone else or sell it elsewhere. Now, of course, look, I'm the woman covering the scams and the scandals, so I know that this happens. But it is, as I told someone else last week in an interview, remember, we all go out on the roads every day in our cars. Imagine the trust that we put. We don't even realize how much trust we're putting when we get behind the wheel of a car

and we know that there's a stop sign and other people are going to stop most of the time. Same thing in publishing. Most of the time, people are not going to steal your ideas. Unfortunately, that tiny percentage, they do it and it's infuriating or dangerous. I'll just say, if you're going to steal, you might as well steal from the best. There you go. That's it, Nicole. Yes. For today's tip, you can take straight to the bank to get started in your mission of finding a book agent. Follow Bethann's recommendation and check out the Association of Authors Representatives. I've linked the website in the show notes.

I hope that you find your publishing soulmate and that I see you out there in the wild west of author land. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson. Our mascots are Penny and Mimsy. Huge thanks to OG Money Rehab team Michelle Lanz for her development work,

Catherine Law for her production and writing magic, and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.