Value Added

When you hire an interior decorator to tart up your digs, you wouldn't know what said decorator is paying for your new furniture.

You assume that there's a considerable mark-up. It's how the decorator makes money. And you know full well that the person advising you on color schemes isn't actually cooking up the paint in their kitchen, any more than they are joining the panels for the doors of your new cabinetry in their shed.

You pay for the designer's creativity. The furniture company gets what the market will bear for the physical product.

What if you were only getting decorating advice? Are the decorator's ideas any less valuable if they don't put a physical product into your home?

Not quite the situation that author Michael Chabon sees in the publishing industry, but there are some similarities.

He's the writer of several novels, a few of which Open Road Integrated Media will be publishing in digital format. These older works were published before anyone heard of digital rights, and Mr. Chabon was thus able to market those rights to whoever would give him what he felt they were worth. Open Road.made him the best offer he was likely to get, not unlike the desperate souls in High Point, North Carolina when they set a price with an interior decorator.

It's just that Mr. Chabon is the one possessed of the ideas, but unlike the interior decorator, he doesn't get to set his price and reap the rewards of his creativity.

For his works that are still controlled by Random House and Harper Collins, he had to accept their royalty on e-books. The publishers don't have to run presses, buy paper and ink, or ship crates stuffed with books. There are no such costs to be recouped. Yet the royalty rate for Mr. Chabon's e-books is the same as that for a hard copy.

E-books sell for far less than hard copies, but when an author gets the same 25% regardless, it's essentially a discount on the author's ideas. The publisher then reaps the rewards of a popular author, in the form of larger profit margins on electronic editions.

Little wonder that Mr. Chabon is less than pleased with the deal. But unless he teams up with his agent to publish on his own, he's stuck with a reduced pay-out.

Shouldn't be so surprising, then, that more and more literary agents are entering the e-book field.