It was only a matter of time. As the traditional publishing model weathers an identity crisis in the age of Amazon, and self-publishing gains inroads and respect, new crowdfunding services are joining Kickstarter (remember when cartoonist Ryan North kickstarted his way to almost $600,000 to bankroll his book?) and Indiegogo to help authors fund the production of their work. An article on PublishersWeekly.com cites Unglue.it, UK-based Unbound, NYC-based PubSlush, and Holland’s own TenPages as examples of new companies leading the trend.
The TenPages model is particularly interesting as it allows people who invest in the work to get a return. “For as little as €5, a user can invest in ‘shares’ of manuscripts that earn money when a book is successful. TenPages has published 47 books so far, including two Dutch bestsellers: Zo Zuidas and De urenfabriek.”
However, the Publishers Weekly post explains, TenPages’ business model is not legal in the U.S. “[B]y selling ‘shares’ in manuscripts, the company would be considered to be selling regulated securities, and it is not licensed to do so in the U.S. But the first major overhaul of America’s securities laws in more than 40 years is poised to change that—and the result could be transformative for authors interested in independent book publishing.” That said, “Last year, a bipartisan majority in the U.S. Congress passed the Jumpstart Our Business Startups Act—otherwise known as the JOBS Act. President Obama signed the legislation on April 5, 2012. Perhaps the most far-reaching provision of the JOBS Act is the legalization of “equity” crowdfunding. …The JOBS Act has yet to take effect because the SEC still hasn’t published the rules needed for its implementation.”
In short, agents and editors that aren’t literary insiders, but have exceptional social media and marketing skills could help books they love get the backing they need. Meanwhile, readers could make money for supporting their favorite authors. Of course, this could, and likely would, further destabilize the gatekeeper model of traditional publishing — or it could be a big boon for already established and bestselling authors. “The JOBS Act does restrict the amount raised from ‘nonaccredited investors’ to $1 million, so the really big-name authors would have to tap the “accredited investor” funding market (an individual with more than a million dollars in assets, excluding home and vehicles, is considered ‘accredited’).”
Ash Kalb, founder of ebook crowdfound service Singularity & Co. is skeptical about the TenPages model. “For 99.9% of books, the overhead costs of dealing with a large number of unsophisticated investors are going to be too high, and one lawsuit from a disgruntled investor wipes out the business. But really, it all depends on the bar the SEC raises with the rules, so we shall see.”
Get the full scoop on PublishersWeekly.com.