At the Alliance of Independent Authors we're always examining different business models and revenue streams for authors and a salary for novelists is a new one on us. In an innovation recently announced, De Montfort Literature (DML) intends to pay writers a small annual salary to write novels, which DML will produce, distribute and promote. Below ALLi Advisors consider the implications and we'd love to know what you think. Let us know in the comments.
One such model is the 2018 publishing venture by Jonathan De Montfort, a hedge fund manager. In 2018, De Montfort intended to pay novelists from £2,000 per month to create their books. Authors would also receive a share of their book's profits from De Montfort Literature, once all costs (including the salary) had been covered.
What is DML's Business Model Concept About?
DML started life as a small division of De Montfort's hedge fund. Now a company in its own right, it takes hedge fund management techniques and applies them to literature in a program that he says will see “the creation of a new generation of best-selling novelists”.
“DML is a totally new model and will be a game changer for the fiction industry,” says De Montfort. “Our goal is to produce more great literature by creating an environment in which authors can learn and develop.”
In addition to being paid a salary, writers will receive support from professional mentors, editors and writing courses. DML is initially offering up to ten places to successful applicants, which it expects to increase up to 100.
“We spent a lot of time and energy using some very advanced techniques to discover what makes a good novelist. This is the biggest problem that traditional publishers have. Because they don’t know what it is, they prefer not to invest. But at De Montfort Literature, because we know what we are looking for, when we find it we’ll invest in it. “
I this video, De Montfort explains the idea and below ALLi found Orna Ross, Campaigns Manager Melissa Addey and new editor Dan Holloway tease out the fine print.
A Salary for Novelists: An AskALLi Team Discussion
Orna: We have emailed DML to ask if the Alliance of Independent Authors might see a contract. In the meantime, here are some of the headline points.
- The salary is a business starter salary of £24,000.
- In addition, the novelist receives 50% of their books' profits after all costs are subtracted i.e. salary, production and marketing costs.
- Should you leave, you own the world and characters you have created and are free to write more stories in that world. DML would own individual storylines / plots already written, and in every format.
- Some questions are unanswered. How is every format defined? There a reversion of rights clause allowing the novelist to buy back the rights, the price set is based on a formula. What is that formula?
- DML recommends that the novelists chosen should have the contract checked and have offered to pay for that check (to an independent lawyer chosen by the novelist)
Melissa: I find it interesting the horror with which various writing organisations reacted to this option, when it offers a decent starting salary to train as a writer. Couldn't we at least consider it, and work with them to understand the entire process, and maybe tweak the contracts, if we find them unacceptable? Personally, if I was back at the beginning, I’d totally sign up for this.
I think of it as a sort of graduate trainee scheme for novelists, paying a not-bad salary to have time to learn your craft. I was part of a graduate trainee scheme in my early business days and there was time to make mistakes and learn what you were doing while being pretty well paid for a total newbie.
Later, as a writer, I benefitted from a similar sort of thing through having two grants one after the other–from The British Library for a year and a PhD grant for three years. That protected time allowed me to improve as a writer and to explore different genres to find what I was good at, and what people wanted to buy. The grants also allowed me to explore self-publishing and learn about that.
Grants for writers are usually quite small and short-lived which doesn’t give you enough time to build confidence. I remember especially with the PhD feeling really ’safe’ because I had three years to make my self-publishing work and by the time I’d got to the end of that, the royalties had caught up with the grant and that was a huge personal milestone for me.
I get that there are concerns. They could take your pen name! They could take your intellectual property! But those are things you could negotiate and are pretty common to many ‘ordinary’ jobs (if you check most contracts you’ll see they say if you invent something etc. it belongs to the company).
Orna: I do think you've hit the nail on the head when you talk about confidence. An indie author's income is based on intellectual property. Trade publishers license that property under clearly defined terms but under this program, DML becomes the owner and that is what sets alarm bells ringing for an author advocacy association. Clearly this hedgefund owner can see the value in fiction. If the author is confident enough, and willing to invest in themselves, they can realize that value themselves, and pay their own salary. But creative confidence is not easily built and some authors would find this offer attractive.
I also find it interesting that there is a psychometric test at the heart of the interview process. And that their application process is protected by NDA. The NDA similarly protects the novelists whose ideas are not chosen for the program.
Dan: There is a lot I love about this idea–which I think already distances me from the crowd of sceptics.. As always, what really matters will be the relationship between the idea and the execution.
I think there can be a tendency to romanticise hardship in the arts. In part, I guess this is because “rags to riches” is such a great story arc, and we spend so much of our time writing this kind of arc that we transfer it to ourselves. And the struggling artist is such a strong cultural trope it can almost feel like an archetype—as though to be a “proper” artist, you have to be poor either in money or in time.
Then there’s the whole “necessity is the mother of invention” thing: the idea that we are somehow at our most creative when we are absolutely down to our last few hours and final pennies. It’s only then that the floodgates open and we discover the gem that remained hidden inside us until we were desperate.
There is a tendency to see struggling as somehow a moral imperative. That if we don’t struggle we haven’t “earned” success. As though the quality of a book and its right to a readership owed more to the pain of the author than the joy of the reader.
As a disabled person, I butt up against this kind of attitude a lot, and it’s toxic. But also really pervasive.
One of the most important books I’ve read is Mullainathan and Shafir’s “Scarcity”, which outlines their research into the devastating impact that poverty has on the brain. When people struggle for money (and time), it eats bandwidth faster than dodgy roaming charges, and the effect is to make us, on the whole, far less creative.
The advantage of a salary is very simple in this context. It frees up bandwidth. That mental space allows for more, not less, creativity.
Orna: I get it that it takes a long time to become a skilled writer and that having a salary support you while you do that is tempting. But if we move beyond thinking of salaries, and think instead of business opportunities (which is what De Monfort is doing), it's about believing not just in yourself but in self-publishing as a model.
The creator economy offers a world of new opportunities and we're seen that readers (through patron-support programs and crowd funders) and others (from social media companies like Facebook to your local bank manager) will invest in an entrepreneurial author in ways that don't ask you to hand over your publishing rights to all formats.
Melissa: It’s a model the music industry used to use: songwriters who were on payroll. Elton John and Bernie Taupin were paid a small but constant amount in their earliest days, to see if they’d turn out to be worth recording.
What's the worst thing that can happen here? You create a bestselling series and have to walk away without the books that started it but you’ll have been supported while you learned your craft. If you’re now that amazing, you can write something even better then, without DML's support, if you don't want to be part of it any more.
Trade publishers can “take you on” for years (blocking you from being with anyone else and probably only publishing one book a year of yours no matter how fast you can write), while paying you only a fraction of that amount… and still dump you.
Dan: It allows time not in the sense of simply minutes and hours, but *useful* minutes and hours (Ericsson & Pool’s book Peak is really interesting on this idea that not all time is equal and what matters are those bits of time in which our brain is at its best).
That kind of mental freedom is one of the best “levellers” you can get. It gives people with great ideas and great potential, whose lives or circumstances simply do not afford them, the bandwidth to realise those ideas. It gives potential a chance. And that’s incredibly valuable.
Melissa: And it also gives an artist confidence that someone has seen something in them. At a practical level, it stops them from having to going into a “regular day-job, because they do have some money coming in.
Dan: That is an real issue, though. The contract stipulates the requirement “in most cases” to give up other work. The salary of £24,000 is an apprentice salary and many people in many circumstances can’t live on it. And that means some people are still going to miss out.
The requirement to give up other work demonstrates the “time fallacy” I alluded to. Eight hours “free” time in the day when you aren’t sure you can pay your bills is not the same as 2 hours when a day when your mind is utterly at liberty to roam. Add to that the fact that Pool and Ericsson’s research show that most people have around four hours at most of truly productive hours in the day and there’s no real justification for not allowing people to top their income up to where it is sufficient. You wouldn’t lose anything as the publisher—you’d gain, because people would have “better time.”
We see this view of time as property rather than potential too much. Most notably, we see it in the debate over the four-day working week. No serious research casts any doubt on the fact that people who work a 30-hour week get better work done than those who work a 40-hour week. Not better work *per hour* but better work. Period.
But while employers grudgingly acknowledge the research, most find a reason not to implement it because they can’t quite help feeling that they have a right to an employee’s time—rather than seeing that they employ someone because they want great work to be done.
It would be a shame for an initiative that does so much to undercut this stigma to fall foul of it at the last hurdle.
Melissa: Let's compare this program at £24k a year versus a trade publisher for a two- book deal and an advance of £10k per book (pretty generous nowadays) and ending the contract after two years with either one. With DML at least you’d be £48k up and have possibly written a lot more than two books as you’d have been full time, so had a lot more practice. The other one you’d be £20k up and two books’ worth of practice, plust the need to have a day job during that time.
Orna: The real comparison to make is what you can do for yourself as a self-publisher, on your own, running your own publishing business. An employment contract, rather than a publishing contract or self-publishing agreement, it going to be far more protective but also more restrictive. Before seeking that protection, an entrepreneurial author will be asking: can I do it myself? How do I mitigate the risks, identify the threats and opportunities, and create a sound business myself from my words? Where can I get the investment I need to make a go of this?
If a hedge fund manager can see the value in fiction, it's important that we, as novelists, can see our own worth and know when to act on it. Or, indeed, when to seek the support we need to get to that place.
Reliability of the Model
While the model may be exciting, there are a number of concerns about the implementation of it. You can see our original post from ALLi Watchdog, John Doppler, here.
John originally point out:
“While the fine points of DML's contract are unknown at this point, the points that have been publicly disclosed are hugely problematic.
Authors who sign with DML are required to:
- Quit their job
- Write exclusively for DML
- Turn over the copyright to any books they write while employed by DML
- Surrender all subsidiary rights
- Sign over the rights to the ideas the author proposes
- Agree to hand those ideas to a ghostwriter at DML's discretion
- Agree not to publish any work for two years after the contract is terminated
Several of these terms are particularly odious in a publishing contract.”
Further, Victoria Strauss, in her in-depth article on the same topic, said:
“I’ve been doing a bit of research into Mr. de Montfort and his investment firm, De Montfort Capital (DMC). What I’m finding is…concerning. The firm’s current website states that the company was founded in 2013. And indeed, DMC’s web domain was registered in that year. However, from 2013 through at least early 2018, DMC’s website was basically a placeholder, complete with non-working links and fake Latin text fillers (not to mention typos).”
Upon checking the website today (21st June, 2022) it is updated and has had a rebrand. However, one page in particular says “We’ll Soon Be Hiring For De Montfort Literature” but is dated 2018 and hasn't had an update since.
The point here, is to highlight that while some opportunities and models might look appealing, it is vital to do your due diligence. Both Victoria and John highlight a number of issues contractually regarding who will own the copyright and royalties. Watchdog says:
“DML's FAQ promises authors 50% of sales, after “all costs are taken into account”. These costs include “salaries, production costs, and marketing”. (The nature of those salaries is not explained in DML's FAQ. Does that include the £24,000 salary paid to the author? If so, we've seen that business model before. It's called an advance against royalties.)”
And continues to point out there are many methods and ways to claim costs which reduce tax liabilities and also the amount of royalties that would be paid.