Let me start this topic about negotiations by saying, I do not, in any way, shape or form, consider myself a master negotiator. I have a lot to learn, and could easily be shown up by others. However, over the twenty-plus years of owning a business and the business degrees I’ve gotten, I figure I have learned a thing or two.
So let’s see if I can distill it down.
To me, most negotiations come down to a matter of:
- leverage (power balance / imbalance)
- & knowledge
Leverage or the Power Balance (or Imbalance)
Let’s take two different examples here to illustrate this position.
- Example 1: You approach a new agent, looking to get signed
- Example 2: You are approached by an audiobook company after you have released a successful book to license your audiobook rights to them for 10 years
You can tell, almost immediately, where the power balance or imbalance lies in both these cases. This is partly because of who is approaching whom in this case (i.e. you approaching an agent, a publisher approaching you). At a glance, it seems that the approacher has given up leverage – and in some ways, this might be true.
However, this is not the end of the calculation by far. Leverage is not just about who makes the first move, but also depends on the amount of knowledge each party has; the egos involved, the timeframe we’re talking about, the resources available to each party and what, in business parlance, is known as the BATNA (best alternative to a negotiated agreement).
Let me quickly explain the BATNA by using the two examples:
- Agent decides to reject you. Your BATNA might be to go to another agent which is a 5 minute e-mail. Or self-publish the work yourself.
- You go to a different audiobook company that might be willing to publish your work. Or, you self-publish the audiobook yourself.
By the way, you might see me say ‘or just do it yourself’, because that’s the LOVELY thing about being a self-publisher. The alternative to giving away rights, to giving away your licenses, etc., for a portion of money is… just doing it yourself. Taking all the risks and the rewards on yourself.
So, the BATNA will vary depending on the individual – but you should ALWAYS know what your BATNA is. If you can’t agree, what do you do? It’s just good planning, but it also allows you to understand what your minimum ‘walkaway’ level is.
This is where I reiterate my belief that most authors should consider having a self-publishing career. The better you are at self-pub, the greater your leverage. The ability to say ‘Well, if you can’t at least make more than what I would do it myself, why would I work with you?’ gives you an enormous amount of leverage.
That being said…
- Ego
I talk about this at times with regard to authors, because a lot of publishing involves ego. Do I get a traditional publication offer? Does that make me a ‘real’ author? Do I get a TV/movie deal? Does that mean I’ve made it big time? All of those kinds of things are big salves to our egos, but it also gives up leverage/offers leverage to the other party.
Conversely, ego – how you speak with the other person, what their objectives are – might drive the other negotiating party too. If they’re looking to sign to win awards because your work is more literary than normal, and they believe there’s a good chance of you winning, because they are caught up in an auction, or they need a way into your genre.
As an example, I’m pretty sure the deal that I received for the Nameless Restaurant from Dreamscape was, partly, due to their desire to enter the LitRPG realm. I know they utilized my name afterwards to pitch their involvement to other LitRPG authors, so I got a much better deal than I should have for a novella.
Sometimes, ego works both ways.
- Timeframe
Urgency can drive bargains one or two ways. If you need something done quickly, because your book is releasing soon, you might take a bargain that is not as favourable just to get it done.
The other aspect of the timeframe is just how much time you have to work the deal, to spend thinking it over, to consider the various angles. A part-time author who has a job and a family is going to be under immense pressure and has less leverage than someone who does this full-time.
Another aspect – this is more in the negotiated items of the contract, but for authors, it can also involve how long you’re ‘locked’ into a contract. Whether it’s a life of copyright for the work or shorter, or whether non-compete clauses appear, or an option clause, the timeframe of how long a contract runs can seriously affect the negotiations. Of course, those are aspects of the contract itself, but worth noting as they can affect the timeframe of other negotiations.
- Resources
Finally, it’s worth realizing the disparity in resources. Not just in terms of expertise (who has lawyers, who has actual professionals) or cash (can the author who is scraping by afford to have a good BATNA? the resource difference between a small pub and a trad five is huge too, and the types of offers a big 5 trad pub can make at the high end will easily eclipse most digital publishers) but also, networks.
This is where agents can be useful – they might have access to other publishing houses, other editors, other authors who might know more of the situation. They can provide much-needed knowledge and an understanding of the lay of the land.
For an audiobook publisher, resources could mean saying ‘I have X famous narrator on contract for 18 hours this year. We can guarantee you’ll get them; otherwise, they’ll be booked till three years from now’. It can also mean things like ‘I have access to Amazon representatives, so there’s no concern about our account going down for longer than a few days’.
Sometimes, resources and timeframes can bleed together to give you or them leverage. If you’ve lost your job, you could be desperate for income and take an offer immediately. Or you could look at a trad pub offer, realize it might take 9 months to get paid even if you sign now, and go ‘I’ll self-publish now’ just to make your money immediately.
Knowledge
This is perhaps the biggest differentiator. Not just in terms of the kind of leverage you have – for example, knowing that the author you’re negotiating with is poor and desperate for money allows you to lowball them – but also, in terms of the actual approach to the deal itself.
Here’s a simple example:
- Most traditional publishing houses discount how much audiobook rights are worth, in comparison to how much audiobook rights might be worth when negotiated directly with publishing houses.
- As such, a trad publisher might offer $12k for all rights for the lifetime of copyright, when an audiobook company might offer $10k for audiobook rights for 10 years.
- However, if you didn’t know that, you might see the $12k for a single book and decide that’s pretty good. Or you might not have knowledge of how to contact the audiobook companies or how much they might offer.
- Another example: audiobook publishers approach a new self-pub author for their debut release. They offer $3k for the book with 15% net royalties for 10 years. Now, if said author is in the mystery or crime genre, this might actually be reasonable (depending on sales); if this were to a new LitRPG author, it most likely won’t. The reason? Disparity in audiobook listeners. LitRPG / progression fantasy is HEAVY on audiobook readers, while mystery/crime is low (at the moment).
Knowledge allows you to understand the landscape of the negotiation beforehand. Speaking with other authors, speaking with other publishers, reading about what is happening or going to conferences to listen to others all provide a background understanding that allows one to decide if an offer at the start is terrible, or worth discussing further.
Time-limited offers, or ones where the other party tries to rush a deal (see timeframe), can be suspect, especially if one doesn’t know much about the particular industry or genre.
Knowledge is huge in negotiations, and the more you have – especially in comparison to the other person – the better.
Alright, this is enough theory. I might go into specific tactics later, though I’ll admit that is one area I’m less familiar with. I mostly go into most negotiations looking for a win-win, but that can sometimes conflict with other negotiating styles or goals of the other party.
Anyway, if you’re interested in actual negotiating tactics I’ve used, let me know.
Recent Comments