Wednesday, September 24, 2008

Has the HarperStudio experiment failed?

Have you been following HarperStudio? News of Bob Miller's departure from Hyperion to start HarperStudio earlier this year has been all over the trades. The plan is to attempt two very different approaches to traditional book publishing--no advances and selling non-returnable.

What is funny to me is that the no advance piece of the equation is supposedly offset by an "exchange for profit sharing." Isn't that what we're doing already, profit sharing? Actually, my understanding is that it is to be a significant split--like 50/50. (I can imagine the royalty clauses, stipulations, and loopholes in that contract. In fact, I'd love to see a copy if anyone can get their hands on one.) Theoretically, the 50/50 profit sharing was being off-set by the other piece of the equation, selling non-returnable.

I'm watching closely because: A. I believe publishing is in dire need of a "Game Changer," something that will finally free us from the traditional ways of doing business that cost so much (like returns); and B. The industry is also in need of a swift kick in the pants regarding runaway advances.

Miller has been able to attract and sign celebrity authors Emeril Lagasse, Michael Eisner, Fifty Cent, John Lithgow (now that's a crew) who don't need big advances, especially if they stand to make more money on actual book sales. We know celebrity sells so that piece is pretty easy to calculate. And I've assumed that it would take strength of HarperCollins to attempt non-returnable sales. This week's PW reports that the non-returnable piece of the puzzle isn't working.

“We've learned a lot about the needs of our accounts," [said Miller,] including that
"each account has a different set of needs to be met" before they will consider buying
nonreturnable. Unable to find a one-size-fits-all policy, Miller said that at this stage
HarperStudio plans to offer retailers a choice of going returnable or nonreturnable,
“with the hope that our nonreturnable terms will be appealing enough that retailers will
try that option.”

The inability to get retailers to back a nonreturnable sale has not diminished Miller's
enthusiasm for the new venture or his determination to experiment. “It's been a very
gratifying experience,” Miller said.

Those sound like the words of a man whose corporate plug has been pulled to me, but we'll see. I'm cheering for Bob Miller and hoping HarperStudio will help chip away at some of the changes our industry desperately needs. I am all for sharing more of the pie but I've been dumbfounded at how they were going to make it work. Now it looks like it may not.


Paul Mikos said...

I kept thinking about this on the drive home tonight and it continues to befuddle me that HarperCollins, Harper-frickin-Collins, ran head long into funding a new imprint without thoroughly vetting one of its fundamental premises.

"You see, what I plan to do is sell the books non-returnable to help off-set our risk."

"That's good thinking, Bob. Damn good thinking."

PW reported that after five months of discussions, “we've learned a lot about the needs of our accounts,” including that “each account has a different set of needs to be met” before they will consider buying nonreturnable.

How did he not know that? How did the HarperCollins execs who signed him up to start the imprint not know this? I dare say had they asked ANY key account rep in the organization, the rep would have told them it wouldn't work, or at least whatever might work for B&N would not work for Ingram, etc.

Question: What did the 800 pound gorilla say to the other 800 pound gorilla who asked him to move?

Answer: No.

Bob Miller said...

Hello, Bob Miller from HarperStudio here. I appreciate the attention to our start-up, but would like to clarify a few things. First, on the skepticism about our 50/50 profit share, I can promise you that it is a true equal share of the profits, with no overhead deducted or other "fatal subtraction" (as Art Buchwald called Hollywood accounting). Second, on the non-returnable issue, while we certainly might fail, the news of our failure is somewhat premature. We haven't even offered terms to booksellers yet, and they may very well still choose our non-returnable option.
Anyway, onward...

Paul Mikos said...

Bob, (Bob?) first, I'm flattered that this blog post found you and I appreciate you taking the time to post a comment.

Second, I am sincere in cheering for you and hopes that your innovation will help change our industry.

Third, I'd still really like a peek at your contract.

Hang in there. Don't let the likes of envy or sour grapes (mine or anyone else's) slow you down. As you say, onward...

Thanks, Paul