Market for lemons.

/Market for lemons.

If your average new author doesn’t have access to the resources necessary to tell an honest publisher or agent from a dishonest one (just to name one information asymmetry) without personal recommendation, if the market for the service offered by publishers is indeed a market for lemons, then the perceived economic value of those services to authors outside of the publishing industry network will trend towards zero.

(Those inside the network can get trustworthy personal recommendations and so will be able to assess the true economic value of each offer.)

If this dynamic applies, then the situation would be even more stark for minority authors because they can’t rely on the recommendations of their non-minority network contacts.

Baldur Bjarnason on publishing lemons.

For those who haven’t heard of it, a “market for lemons” is a theory in economics that has to do with markets wherein buyer access to information on the quality of goods is so uneven (“information asymmetry”) that it has the functional effect of driving all quality products from the market. Basically, because a buyer can’t tell whether the product they’re buying is any good beforehand (for whatever reason), they will never be prepared to pay more than average price for it. Which also means sellers of quality products will never be able to get premium prices, ergo they will forego selling in that particular market, meaning the percent of bad experiences buyers have will go up, prices will go down, and so on. The classic example of a market for lemons is used cars, hence the name.

Bjarnason is arguing that publishing services, in which he includes both agents and editors/publishers, looks very similar to a classic market for lemons, at least to people on the “outside” of publishing. I think his argument has some merit, and it makes me think of several conversations I’ve had recently along the lines of, “Do I have to have an agent if I’ve already got an offer from a publisher?”1 all of which seem to stem from the fact that a lot of “pre-published” authors have absolutely no idea what an agent actually does.

Hint: getting you offers from publishers is, like, 5% of their job. At most.

But the fact that people don’t know what agents are supposed to do makes it very hard, from the outside, to assess a “peach” agent from a “lemon” one. Most “lemon agents”2 will do things like try and convince you that 5% is all they should be, or need to be, doing. Often described in terms like, “We’re a down-to-earth boutique agency! No fancy expensive New York offices and wasting time sipping martinis with Big 5 editors for us! We do Real Work™.”3

Some of this information asymmetry is the fault of the industry itself; it’s a pretty closed shop. Which, given my day job is INFOSEC, is really saying something.4 I don’t necessarily think the closed shopiness is intentional so much as it is simply a disconnect between the expectations of people who are in the industry versus those who aren’t. Put simply, people who are “in” tend to look for indications of long-term viability,5 whereas those who are “out” are looking for indications of “omg I just want a publisher someone anyone ple-ee-ee-ease!” Also, people who are “in” tend to be utterly rubbish at talking about this stuff, which doesn’t help the out-group.

To test, next time you’re talking to an author, try and ask them a business question about publishing. Something like “in your experience how has the emergence of digital platforms impacted discoverability?” or even a basic “how do you think the industry has changed for someone getting in now, as opposed to [x] years ago when you started?” And watch the verbal flailing and evasiveness that will almost inevitably ensue.

Actually, that’s not always true. I’m my experience, you’re going to get one of three different answers here, and–to get back to Bjarnason’s core point–they’re almost certainly going to reflect the demographics of their person you’re asking.

White dudes who’ve had no experience on the business side, particularly those in the age bracket of about 40-plus? They’re almost always going to flail. They have no idea about the mechanics of the industry because they’ve never had to know; they’ve always been on the inside and they’ve never really had to think about things. Even when they were neophytes, they were never given any institutional indicators that they wouldn’t be able to “make it” if they kept at it. Slightly more astute white guys will even know why this is (hint: check out who’s on a “best of” list lately), and might defer the question because of it.

White dudes who’ve been on the business side (i.e. been editors) and most white women will usually have a slightly different answer, and it will tend to revolve around networking and individual effort. These are the people who’ll tell you about the greater onus put on authors to do self-promotion and marketing and how it kinda sucks but you have to man it up and do it (phrasing intentional). They might even talk about good versus bad agents, and how to tell the difference. They’ll also probably talk about things like the importance of BarCon and (if they’re dudes) on getting yourself invited up into room parties at conventions in order to meet people and do networking (which might earn them side-eyeing from nearby women).

And then there’s the people with the actual interesting answers; mostly writers of color, but some other intersections (including wealth), too. These are the people who will, more often that not, give you the mechanical nitty-gritty because they’re the people who’ve usually had to navigate through the lemon market themselves, by hand, rather than been dragged through it by peers and patronage.

Say that whole “navigating through the lemon market” takes a good, oh, I dunno. Ten years? That’s a ten year head-start that people who haven’t had to do that learning (because of demographics) have on their career progression. Given the way publishing (doesn’t) pay, that’s also very possibly ten years most people can’t afford.

You want to talk about structural disadvantage in the publishing industry? Well, here you go.

So how fix? This is where I think Bjarnason’s comparison gets interesting again, because one of the core arguments about markets for lemons is that they can’t be fixed from within the market itself; they get fixed by external regulation. Imagine if suddenly every publisher was mandated, by law, to release ROI figures on every book they published (advances versus marketing dollars versus sales).  Or imagine if there was some kind of independent certifying board for agents,6 in the way there is for lawyers, and misbehaving agents could be “disbarred”.

Imagine if you could even get reliable sales figures for individual book titles. What a different world even that would be!

But, let’s be real: the government is not going to regulate the publishing industry,7 nor do I necessarily think it should.

And in the meantime? Be careful what you sign up to, and I hope you like the taste of lemonade.

  1. Answer: you probably should’ve gotten one first, kid. ^
  2. Which sounds like a drink, now that I’m thinking about it. Mm, delicious icy-cold lemonagent. ^
  3. Protip time: “Sipping martinis with Big 5 editors” is “real work” for a peach agent, and given that like an unscientifically determined 94.23% of the publishing industry are massive introverts, they aren’t doing it for fun. They’re doing it to network and find out what publishers are buying, because that’s literally they’re job, and so they can name-drop you, their client, and talk up whatever project you’re currently working on. Also, I’m reliably informed the martinis thing is a myth, though if you’re lucky you might get taken to a nice deli. ^
  4. Publishing might be a market for lemons, maybe, but INFOSEC definitely is. ^
  5. Incidentally, this keep-away-from-the-lemons-child stuff is a good, say, 40% of what your peach agent is for. ^
  6. Key word: “independent”. There are some guild-like organisations that attempt to do this, but they tend to suffer from the same problems as the rest of the industry. ^
  7. Except around parallel importing, which is another one of those things that’s there to benefit insiders. ^
2016-11-17T19:58:41+00:00 2nd November, 2016|Tags: publishing|Comments Off on Market for lemons.