The New Money Flow

Recently, while reading a write-up of a self-publishing nightmare, I ran across mention of something called Yog’s Law, attributed to one James D. Macdonald. Having never heard of Yog’s Law before, I clicked through and learned the following:

Macdonald is well known for his work in educating aspiring authors, particularly for his advice on avoiding literary scams. Early in his career he was asked by such an author how much he had paid to have his books published, and in response began a campaign of educating other writers about the problems of vanity publishers. As part of this campaign, he coined Yog’s Law, which states “Money should flow toward the author,” which is often quoted by professional authors when giving advice on getting published.

Less than a day later, I read this in a blog post by Richard Curtis:

The line that once sharply separated traditional publishing (“We pay you”) and vanity publishing (“You pay us”) has all but dissolved in this corrosive environment of fabulous riches.

Mere hours later I found Yog’s Law quoted a third time, in a Jane Friedman blog post analyzing the Harlequin Horizons debacle:

People like to say (and I’ve said too) that money should flow TO the writer, not AWAY from the writer.

But I can see a business model emerging where publishers work with authors in more diverse ways. What we’ve held to be sacred—that a writer should NEVER pay to publish—may change.

To be clear: there are a lot of literary scams out there, and a lot of naive writers who get taken to the cleaners as a result. Whatever work James Macdonald has done to protect writers from predatory service providers who peddle false promises is a good thing.

Understanding Yog’s Law
As maxims go, Yog’s Law is not bad. In a moment I will speak to the fallacy of Yog’s Law, and to the convenience of revisiting the rule when the publishing industry decides it wants to get in on the writer-servicing business, but as a general guideline I think Yog’s Law does what it needs to do. It tells writers that anyone asking them for money should be viewed with suspicion, and that’s correct. That this core tenet could be expanded to cover most aspects of anyone’s life does not detract from its effectiveness as a general rule for aspiring writers.  

As related specifically to publishing, Yog’s Law also describes what was, until recently, the truth. Publishers who wanted to make money as a result of book sales did not ask writers for money up front. Just as jewelers evaluate diamonds before buying, and real estate moguls evaluate land, and art dealers appraise paintings before adding them to their galleries, publishers performed due diligence on authors and their works (including future efforts) to determine whether they were worth adding to their lists. Publishers took this risk with the understanding that they would profit alongside the author only if a book did well.

That was how business was done, and that’s why Yog’s Law made sense. Legitimate publishers didn’t ask for money up front, but rather gave money to authors based on sales. Illegitimate publishers asked for money up front, meaning money flowed from authors to such publishers. A law that told aspiring writers to keep an eye on the direction in which money flowed was helpful precisely because of the modus operandi common to many of the predatory scams aimed at writers.

The Fallacy of Yog’s Law
At its most basic, however, publishing is not a question of maxims or appraisals or even authorial merit. It’s a question of cash money. Which brings me to my criticism of Yog’s Law, my criticism of the industry for exploiting Yog’s Law, and my general exhaustion with the idea that all the bad people are on the outside of the publishing industry and all the good people are on the inside praying to Daniel Webster. Because nothing about Yog’s Law deals with the fact that a pay-you-later publisher can screw authors as effectively as a pay-us-now subsidy or vanity publisher.

To begin, it’s worth noting that Yog’s Law fits quite nicely with the publishing industry’s own propaganda of love and reverence for books and authors. “Look,” the publishing industry says, “we’re not taking money up front! We’re gambling on you because we believe in you! We have faith in you! We’re not like those scummy people who ask for money in advance!”

And it sounds good. And because it sounds good this message has helped the publishing industry convince the average wannabe author that anything other than publishing with a pay-you-later publisher is a scam or — and here it gets a little ugly — an admission that the author is a vain, talentless failure.

The original spirit of Yog’s Law — the laudable let’s-keep-naive-writers-from-getting-screwed message — was hijacked so that the flow of money to other publishing sources could be kept in check, while the herd of new writers arriving in the marketplace each year could be marshaled into publishing-industry stock yards, poked and prodded for good marbling, graded, slaughtered, shipped and stocked for the convenience of the book-loving consumer.

This is what you do if there are limited resources available to your business. You try to destroy the competition and lock up those resources. Until recently, writers were the publishing industry’s only resource. Today, writers are the publishing industry’s resource and the publishing industry’s competition and the publishing industry’s new and rapidly-growing market for publishing services. (Think about that for a minute.)

It is in this context of industry propaganda that Yog’s Law breaks down. First, there’s a demonstrable need for publishing services outside of the publishing industry gates. If you have a book of family recipes, or a family history that you want to bind, or any of a thousand other works that you intend neither to sell yourself nor pitch to a publisher (meaning a publisher who doesn’t ask for money up front) you need to find someone who can make a book for you, in the same way that you might need to find someone who can hem curtains or put a patio in your backyard. And there’s nothing remotely fraudulent about anyone offering these services. (I’ll get to the fraud part in a moment.)

Second, the idea that money flowing to an author means the author isn’t being taken to the cleaners is a joke on the face of it, and only gets worse the closer you look. Think about any music-industry horror story you’ve ever heard, where musicians are cheated out of money by their own music label, and chances are that story will involve money that was flowing to the musicians. Band X doesn’t get ripped off because they paid $20,000 up front and got left in the lurch, they get ripped off because they signed a contract with a publisher that legally allowed the publisher to rip them off day and night, week after week, year after year — in some cases forcing the band to also produce new music under penalty of legal action, including loss of copyright, if the band ever had copyright to their own music in the first place.

The Money-Flow Lie
Imagine for a moment that you’re an unknown author. You sign with a publisher and your book goes to #1 forever. It never comes down. You have written a book as good as a book can be written, and everybody admits it. In less than a year your book is the only book on the bestseller list because every other writer quits the business.

Now imagine that your contract, the one you signed with the we-don’t-charge-you-up-front publisher, gives you one penny on every book sold. You had to take that contract because it’s all the publisher was willing to offer, you had six kids to feed, and you lived in an upside-down abandoned sailboat in the slimy backwaters of Chesapeake Bay. Despite the fact that you’re talented beyond measure and that money is now flowing like the Mississippi, at one penny per book your ten-million-selling blockbuster has netted you the grand total of $100,000 before taxes, agent fees, etc. When it’s all over you’ll be lucky to clear $40,000.

I know what you’re thinking. You’re thinking any author who signs a deal like that is an idiot. And I don’t disagree. But notice what’s happening now. Now we’re saying that an author needs to be on guard not just against publishers who ask for money up front, but publishers who only flow money to the author. It’s not simply the case that money flow predicts or precludes abuses, as the music-industry analogy showed. And if that’s the case — if money flowing in either direction can still be fleeced from writers — what’s the ultimate utility of Yog’s Law?

Or maybe what you’re thinking is that the penny-a-copy royalty example is too unrealistic. And you’re right. I should have made it a little more realistic, so we could get bogged down in arguable concrete details instead of recognizing the blindingly obvious fact that authors can easily be taken by publishers who do not ask for money up front.

Do we really have to have a conversation about all the ways a publisher might rip off a writer? Do we need to get into the reserves-against-returns issue? Do we need to talk about publishers holding authors’ rights even after they’ve stopped exploiting those rights? What about phantom charges deducted from a book’s costs? Is there anyone on the face of the earth who really believes that a publisher cannot screw a writer just as effectively — and perhaps even for a greater total amount over the life of a contract — as a vanity publisher?

Then again, maybe what you’re thinking is that no writer would ever be caught in a contract like that if they had a good agent, and I agree. But now we’re falling so far back from our original assertion we’re assuming it’s agents who will ultimately protect writers from any publishing nightmares. While that’s certainly an agent’s job, this assumption destroys Yog’s Law completely.

The New Money Flow
The abuse of writers by con-artist agents easily rivals the abuse of writers by publishers of any stripe. To help protect naive writers, reputable agents such as Richard Curtis put the AAR together, authors’ groups like the MWA and SFWA support sites like Writer Beware, and sites like Preditors and Editors post updated information about who’s being naughty and nice to writers.

But if writers need agents to protect them from bad publishing deals of any kind, and if the process of finding a good agent is as fraught with risk as the process of finding a good publisher, then writers today aren’t facing any unique threats. In fact, the only thing that’s changing is that the stigma of self-publishing is dying at exactly the same time that the pay-you-later publishing industry has discovered there may be considerable profit in the self-publishing space.

Apart from any stupefaction at this amazing coincidence, the net effect on writers is trivial. Instead of buying into Yog’s Law and trusting pay-you-later publishers who may bleed writers through bookkeeping scams, writers now have to use the same savvy and suspicion necessary for surviving the agent-hiring phase of their careers in the dealings they have with publishers or publishing-service providers.

Which brings me to what might be called the New Yog’s Law, with apologies to Mr. Macdonald:

Money can flow in any direction you want, but it’s your job to know where every penny goes and what you’re getting for those pennies.

If you’re a writer you have to do more and know more about your own business than ever before. You have to be good at watching your pennies, good at making deals, and good at judging the character of the people you do business with. You’re also going to need good advisers, good publishing contacts and good support groups to deal with the unending parade of offers, scams, services and cutting-edge technological developments that will appear and disappear in the next decade.

The New Publishing Metric
The good news is that content distribution isn’t the only thing the publishing industry no longer has a monopoly on. The other cornerstone of traditional publishing success has been proprietary information about the industry itself, including in particular all those legendary bookkeeping tricks of the trade.

If writers are completely on their own now, and they are (and for my money always were) then it’s up to each individual writer to make sure they take care of business. But unlike days of yore, writers can now communicate in real time about what’s happening to them. And unlike, say, musicians, writers are experts at using the tools of their craft to analyze and articulate messages. In fact, in perhaps no other industry are the rank and file as smart and skilled as management at using message and language to achieve their own ends.

Just as writers currently have resources to help them decide which agents are reputable, writers can pool knowledge and experience in order to determine which publishers and publishing-service providers are reputable. Which brings us back to the Harlequin Horizons debacle, and the reason why every publisher in the world should be scared. Ten years ago, maybe even five, Harlequin would have been able to act with impunity. Now, today, it took only a day or two before the combined response of several writers’ organization forced Harlequin to change their plans.

Why did writers react so strongly and effectively? I see two big reasons that galvanized authors to action in a way that caught Harlequin flat footed.

First, Harlequin did exactly what the publishing industry has been warning authors about for years. They held out the possibility of a potential Harlequin publishing deal as a means of seducing authors into paying money up front. That’s the fraudulent stain I mentioned earlier, and one this is often used by shady vanity publishers. Rather than offer a suite of defined publishing services for various rates, such predators imply that something wonderful and magical will happen if only an author is willing to invest in themselves by throwing ten grand (or another ten grand) at perfecting their text. This opens the door to all kinds of abuses, including selling the author on high-dollar editorial services that can easily be faked.

Second, after decades in which the industry told published writers that the pay-you-later model was the one true way to define success, a publisher with the recognizable and respected brand name of Harlequin changed its tune when it realized this industry propaganda was getting in the way of profits. Unfortunately, writers who had come to believe that professional success was defined by being published didn’t take kindly to that change of heart. And I don’t blame them.

Implicit in all this, of course, is the internet, which provided the means for the instant analysis and information sharing that galvanized authors to quick action. Again, the internet is not simply a new avenue of distribution that allows authors to move past traditional publishing-industry gatekeepers, it’s a critical information pipeline that functions in the same way. Because writers have access to shared real-time information, controlling messages in the way that the publishing industry has long been accustomed to becomes almost impossible.

In the end, Harlequin’s crime wasn’t that they tried to move to a new business model. Harlequin’s crime was that they hypocritically betrayed a whole generation of professional writers just to make a buck. Meaning the same buck that slick vanity and subsidy publishers have been trying to make all along. Once again, this pretty much puts to rest the idea that publishers love and revere writers.

As Harlequin found out, the internet puts a premium on trust. Those publishers and publishing-service providers who prosper going forward will treat trust as a critical metric in their dealings with authors. They will do this by providing honest services at a fair price, and by letting competition determine the winners. Everyone else will eventually fail.


This is a cross-posting from Mark Barrett’s Ditchwalk site.