Web dev at the end of the world, from Hveragerði, Iceland

A thought to consider

What if the market for the services offered by publishers and agents is an Akerlof-style market for lemons?

As in, the information necessary for the author to judge the value of the services offered (i.e. honesty, dishonesty, median title performance, editorial resources, design resources) is only available to those already in the publishing industry network or to those with the financial resources to buy that information (such as hiring a specialised lawyer).

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.

This dynamic would have been sort of sustainable when authors had no alternatives except to either deal with the market for lemons (i.e. be overcharged for publishing services) or leave their chosen profession. That is no longer the case.

(Aside: You could view self-publishing services as alternate markets that have decreased the information asymmetry of buying publishing services by unbundling them and forcing them to use fixed prices, and have decreased the risk of purchasing those services by preventing publishers from claiming any rights. These markets can be unfair in other ways, of course. They just manage to avoid this particular dynamic.)

If the market for publishing services is a market for lemons, that would mean that it is structurally impossible for the industry to diversify its author base economically, geographically, or in terms of minorities and class.

Reforming a market for lemons is generally impossible without regulation since well-meaning sellers (i.e. individual publishers) are usually driven out by the less than well-meaning. And, yes, how fair your standard contract is plays a big part in whether you’d be considered well-meaning or not as far as the economics of the market are concerned.

New publishers who don’t have a pre-existing stable of proven authors—authors who are already in the network and who don’t suffer from the information asymmetry—would have to compete by lowering their prices directly or indirectly: shorter contract terms, higher royalties, more personal (and more costly) services. Over time, their lower margins would reduce the sustainability of smaller publishers and they’d be driven out of the market.

Ergo, if this applies, the perceived economic value of the services offered by publishers and agents will trend towards zero for authors who don’t have pre-existing connections in the publishing industry and for authors who are members of one or more minority.

Insiders (rich, well-educated white people) will opt for signing up with a publisher.

Outsiders and minorities will switch wholesale to self-publishing and similar markets.

Just a thought.

You can also find me on Mastodon and Twitter