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The Gigification of Publishing

Will Authors Equity disrupt a stodgy industry?

Publishing, even among culture industries, is notoriously sleepy as a capitalist enterprise. Many enter the field—and take spiritual compensation in lieu of higher pay, shaping employee demographics—because they love literature. Depending on one’s taste, this is a commitment sometimes in conflict with maximizing profits. The story of the industry’s last fifty years has been about the steady rationalization of this fundamentally chaotic business, driven by conglomerate consolidation, the shareholder value revolution, and top-down demands for quarterly growth. Literature finds itself, as it long has, poised between capitalism and aesthetics, learning to accommodate—through everything from intensified investment in brand names to literary fiction’s adoption of genre techniques—the persistent encroachment of the former. (I detail the far-reaching consequences for literary history in my book Big Fiction.)

You would be hard-pressed to find another trio who more cannily served the drive for growth in recent decades than the cofounders of Authors Equity, a new publishing house launched earlier this month. Authors Equity brings Silicon Valley–style startup disruption to the business of books. It has a tiny core staff, offloading its labor to a network of freelancers; it has angel investors, such as James Clear, author of the mega-bestselling self-help book Atomic Habits and the über-successful mystery writer and Hillary Clinton coauthor, Louise Penny; and it is upending the way that authors get paid, eschewing advances and offering a higher percentage of profits instead. It is worth watching because its team includes several of the most important publishing people of the twenty-first century. And if it works, it will offer a model for tightening the connection between book culture and capitalism, a leap forward for the forces of efficiency and the fantasies of frictionless markets, ushering in a world where literature succeeds if and only if it sells.

Madeline McIntosh is at the top of Authors Equity as its CEO and publisher. She graduated from Philips Exeter and Harvard before entering publishing. She recognized already in 1994, as the New York Times put it, “that the internet would irreversibly transform publishing,” and became a specialist in online sales at Bantam Doubleday Dell. She also anticipated the growth of audiobooks, becoming publisher of Random House Audio in 2005. Three years later, she moved to Luxembourg to work for Amazon as “director of content for the international rollout of the Kindle.” She came back to Random House in late 2009 and climbed to the top, becoming the U.S. CEO of the merged Penguin Random House—the world’s largest trade publisher—a position she held until early 2023, when she resigned, becoming a head that rolled over the botched attempt at the acquisition of Simon & Schuster, which cost PRH $200 million. McIntosh is only in her mid-fifties. She made her reputation by always being a step ahead of everyone else in terms of data and technology. Where does one go from the most powerful position in publishing?

The more the people working on books participate in their profits, the more, structurally, profit-seeking will shape what books look like.

McIntosh’s fellow cofounders of Authors Equity are her former boss and her former deputy. Don Weisberg was Random House’s president of sales and operations, then its North American COO, under whom McIntosh thrived. He resigned (possibly under pressure) in 2007 and, after a stint as president of Penguin Young Readers, became president and then CEO of Macmillan—as with PRH, one of the Big Five conglomerates that controls some 80 percent of trade publishing—through 2022. Like McIntosh, he embraced technology, aiming, back in the aughts, to personalize sales: “We are focusing more and more on one-to-one marketing,” he told Publishers Weekly in 2000. He is Authors Equity’s senior advisor.

Nina von Moltke, who previously worked directly under McIntosh, is Authors Equity’s president. She serves as the treasurer of the board at the prestigious Center for Fiction and worked at Random House from 2002 to 2023, the last five years as president, director of strategic development—resigning just weeks after McIntosh’s ouster. McIntosh and her successor, Nihar Malaviya, offered a joint statement on her departure: “When ebooks surged, she was a key member of the team that adapted our publishing processes and business practices to the new needs and requirements of the market. When the first signs emerged of the audio boom, Nina, who oversaw the audio and diversified publishing groups from 2010 to 2018, led the investments in capabilities, infrastructure, and talent that were critical in ensuring our continued market leadership.” In short, she worked closely with McIntosh to take maximal advantage of this century’s most important format developments: e-books and audio.

Authors Equity’s website presents its vision in strikingly neoliberal corporatespeak. The company has four Core Principles: Aligned Incentives; Bespoke Teams; Flexibility and Transparency; and Long-Term Collaboration. What do they mean by these MBA keywords?

Aligned Incentives is explained in the language of human capital: “Our profit-share model rewards authors who want to bet on themselves.” Authors, that is, take on more of the financial risk of publication. At a traditional publishing house, advances provide authors with guaranteed cash early in the process that they can use to live off while writing. With Authors Equity, nothing is guaranteed and nothing given ahead of time; an author’s pay depends on their book’s profits. In an added twist, “Profit participation is also an option for key members of the book team, so we’re in a position to win together.” Typically, only an author’s agent’s income is directly tied to an author’s financial success, but at Authors Equity, others could have a stake. This has huge consequences for the logic of literary production. If an editor, for example, receives a salary and not a cut of their books’ profits, their incentives are less immediately about profit, offering more wiggle room for aesthetic value. The more the people working on books participate in their profits, the more, structurally, profit-seeking will shape what books look like.

“Bespoke Teams” is a euphemism for gigification. With a tiny initial staff of six, Authors Equity uses freelance workers to make books, unlike traditional publishers, which have many employees in many departments: editorial, marketing, sales, rights, production. McIntosh and Weisberg told the New York Times that they are taking advantage of the post-pandemic world where more people work from home and have embraced freelancing. But, conveniently, this move seems to defy the wave of organizing that has swept the culture industry in recent years. From The New Yorker to HarperCollins, bookstore employees to graduate students, workers have unionized to demand better pay and improved working conditions in traditionally poorly-remunerated jobs. It is more difficult for freelancers to unionize. Bespoke Teams, however, facilitate the related goal of Flexibility and Transparency, valuable qualities in our just-in-time economy—and responsive to the peculiar nature of books as commodities where each title is unique and thus difficult to standardize.

Their fourth Core Principle—Long-Term Collaboration—addresses widespread frustration with a systemic problem in traditional publishing: the fetishization of debut authors who receive decent or better advances, fail to earn out, and then struggle to have a career. It’s a real problem and one where authors’ interests and capitalist rationalization are, as it were, aligned. Authors Equity sees that everyone might profit when an author can build a readership and develop their skill.

This isn’t the first time that an ousted Big Five CEO with time to burn adopted a Silicon Valley mentality in an effort to remake herself as a forward-thinking maverick.

To enact these principles, the three cofounders have brought on three employees to round out their team of six. Their CMO, Carly Gorga, is another PRH alum, while COO Andrea Bachofen worked under von Moltke in publishing development and author platforms at PRH from 2010 to 2017 before spending the last seven years at Amazon. Maybe the biggest surprise is Robin Desser as editorial advisor. Desser, who is well-known and widely respected in publishing circles, spent her career at what are now PRH imprints, beginning in the 1980s. She became, in time, the editorial director at Knopf and, finally, the editor in chief of Random House, before retiring in 2022. Over the course of her career, Desser has worked with Chimamanda Ngozi Adichie, Anne Carson, Sandra Cisneros, Edwidge Danticat, Valeria Luiselli, and many others. In other words, she gives Authors Equity literary clout that it would otherwise lack.

What next? Will Authors Equity actually disrupt a stodgy industry? This isn’t the first time that an ousted Big Five CEO with time to burn adopted a Silicon Valley mentality in an effort to remake herself as a forward-thinking maverick: see Jane Friedman. Twenty years before Madeline McIntosh took the helm of Random House Audio, Friedman founded it. She departed Random House to become CEO of HarperCollins in 1997, where she rebuilt Rupert Murdoch’s house before leaving under opaque circumstances in 2008. For her next act, she drummed up millions in venture capital, rented an open-plan office in Soho, and filled it with a young staff that grew to forty people by 2012, mostly marketers. The idea was that a small, swift, young digital publishing company might prove better than the old conglomerates and establish a new model for the industry. It was called Open Road.

The company’s strategy was to raid e-book rights languishing unclaimed on the backlists of conglomerates, which hadn’t begun writing such rights into contracts until 1994. Friedman aggressively pursued rights from Pearl S. Buck, Pat Conroy, William Styron, and Alice Walker, promising to revivify their works. Forever a booster, she told sociologist John B. Thompson that “the authors say they’ve never been treated like this before in their lives. Our whole premise is that we market 365 days a year.” But after 2012, e-book sales leveled off; most readers stuck with print. Open Road, struggling to make a profit, morphed into “a digital marketing company that was providing a suite of marketing tools to other publishers,” as Thompson notes in Book Wars. It did little to change how publishing works.

Maybe Authors Equity will go the way of Open Road: an ambitious disrupter that ends up a minor adjunct. But times have changed. When Open Road launched in 2009, the Penguin and Random House merger was still four years ahead. We now live after the failure of the PRH and S&S merger, a sign, maybe, that after six decades, conglomeration is nearing the end of its run; that the economy won’t abide much more consolidation; that the big, labyrinthine, bureaucratic beast is obsolescing. Maybe. Authors Equity is also more ambitious than Open Road, presenting itself more as a direct competitor than as a parasite. It’s not impossible that we’ll look back in twenty years and see its founding as auguring the beginning of the startup age in publishing.