Major US Agency Moves Into Publishing. Or Do They?

It seems like the big news stories are coming every day now. That’s what happens when you combine the disruptive power of the internet with a revolutionary change like digital self-publishing.

In an announcement that is sure to cause some surprise, Dystel & Goderich – agents for Barack Obama, Judge Judy, John Locke, Joy Bauer, David Morell, and Richard Dreyfuss – have announced a move into publishing. Or have they?

I have made my feelings about agents moving into publishing quite clear on a number of occasions, and have always attempted to highlight the egregious practices that are becoming more common. However, before we grab the pitchforks and march on 5th Avenue, I’m going to ask for a moment to get a few things clear, and to take a closer look at what is actually being proposed.

First, I want to look at what this actually is, and then I will examine whether it is a good idea or not.

Why Agents Becoming Publishers Is Bad

The reason I’m against agents moving into publishing is that it’s a clear conflict of interest. To be clear, I have no problem with an agent setting up a publishing company, as long as they quit being an agent. However, they cannot maintain both roles.

The reason for this is simple. An agent is your advocate, your representative, your advisor. Their primary role is to shop your books to publishing houses, to represent you in negotiations with them, and to secure you the best deal they can. In exchange for these services they get a cut – usually 15% – of the deals they negotiate.

It is in their interest to get you the best possible deal, as they are getting a share of that deal. Because your interests are more or less aligned with the agent’s, the system more or less works, in theory (with the strong proviso that bad practices are on the rise).

However, once that agent also becomes a publisher, everything changes. Their interests will no longer be always aligned with yours because they could – personally – stand to make more if you publish with them.

How can you trust that agent will keep trying to sell your book to publishers, when they know in the back of their mind that not doing so could be more lucrative for them?

It’s like your realtor calling you after your house has been on the market for a month and saying, “Sorry, no interested parties. However, I know you are desperate to sell, and I want to help you out of this pickle, so I’ll give you $200,000 for it.”

How do you know the realtor is being honest? How do you know the realtor is passing on all offers when they have one eye on your property for themselves? How do you know you’re not being taken for a ride?

Finally, just on a practical level, do you really expect publishers to return their calls now that your agent is the competition?

We can be clear. Agents becoming publishers is bad.

Why This Might Be Different

If you read the statement released by Dystel & Goderich, and if we can take it “as is”, what they are proposing is very different to what Ed Victor is doing with Bedford Square Books or what Scott Waxman is doing with Diversion Books.

The devil may be in the detail, but on the surface, this is radically different to an agent becoming a publisher. It seems that what they are offering is to act as advisors to those out of their existing clients who wish to self-publish. For this “project management” service, they will charge their standard fee of 15%.

The reason I think this is different is this. The agent’s percentage is identical to what they would receive if they sell your book to a publishing company. So the agent is still strictly motivated, in a financial sense, to get you the best deal they can.

In fact, it could be argued that the advice you will get now will be more impartial. Instead of the agent suggesting you take a low-ball offer from a publisher because they want their 15% and are worried you will drop them to self-publish, they will run the numbers and estimate whether you will make more on your own or with the low-ball offer.

I want this to be clear, so let’s take a concrete example. Let’s say I’m represented by Dystel & Goderich and my manuscript has been on submission for six months, and I have gotten close to an offer but nothing concrete yet. Not too uncommon a situation.

Let’s say a publisher finally comes through with an offer of a one book deal and a $10,000 advance. Before, my agent would have been pushing for me to take it. They know I am getting itchy feet, and they are worried I will pull my book and self-publish, leaving them with nothing.

However, now they will run the numbers and see that I only need to sell 6,000 books at $2.99 to cover costs and beat that advance. They might estimate the commercial appeal of my book, look at my platform, and say: you will make more self-publishing.

Now, I can choose to do it on my own, or I can choose to have them project manage it for me, take 15% of my royalties, and leave me with more time to write.

The problem with agent/publisher hybrids is that they get a higher percentage if you go with them. But in this case, because their cut is always 15%, that doesn’t arise here. The agent’s interests are still aligned with yours. There is no conflict.

I know two writers who are represented by Dystel & Goderich. One is a big fan of self-publishing and the other is a little cooler on the whole thing. Neither of them have a problem with this move (as announced). Both think it’s good for the agency, and good for the writer to have the assistance if they choose.

For me, the publisher is the person who controls the rights. When you sign a deal with an agent/publisher hybrid, you sign a publishing contract with them granting them the rights to publish your work. That is why that agent is becoming a publisher.

However, on the surface, this is different because the writer retains the rights and pays the agent a fee for advice. Whether it is a good idea is another matter, but I just wanted to get it clear first what this actually is.

Joe Konrath

One of the interesting aspects of this whole thing is that Joe Konrath, the doyen of self-publishers and the bête noir of the publishing world, is represented by this agency. And, not only does he support this move, he proposed it.

This has led to consternation amongst some of his supporters whose automatic instinct is agent = bad. Now, with some of the egregious agent practices being highlighted by Passive Guy, Kris Rusch, Dean Wesley Smith, and, yes, Joe Konrath himself, a skeptical disposition towards agents is a healthy position to adopt.

However, this doesn’t automatically mean that agents should be avoided at all costs. Joe Konrath himself still uses an agent to negotiate foreign deals, movie deals, and other subsidiary rights. Many self-publishers do the same.

Others again, like Barry Eisler, either do all that stuff on their own, or hire an IP lawyer. Personally, I don’t pursue agents anymore and don’t plan to in the future, but if one contacted me, I would listen to what they had to say. And if I was interested, I would have a top IP lawyer go over everything with a fine-tooth comb.

But to return to Joe Konrath for a moment, he has long hoped that someone would put together a package deal for successful self-publishers. Someone who would manage the whole business side – arranging editors, cover designers, formatting, promotion etc. – a position he dubbed an “estributor”.

Personally, I think that’s an ugly word for someone who is really a business manager/project manager.

Now, you can argue about the finer points. Is it better to pay someone a flat fee for that role? Is it better to throw them a percentage as an incentive to grow the business? Should it be time-limited or for the lifetime of the copyright of the book?

Whatever your position on those questions, it’s completely different from an agent becoming a publisher.

Is An Agent Becoming A “Project Manager” A Good Idea?

The final question I have today is this. Is hiring an agent to be your self-publishing business manager a good idea?

Well, that depends. And I think writers should look at it as a business decision.

What are you getting for that 15%. Does that cover all the costs? Or do you have to pay for editing, covers etc. on top of that?

What promotional services will it include? Is the 15% negotiable? Can it be limited to 5 years or 10 years, or will my kids be cutting my agency checks long after I am gone?

What if I want to fire my agent? What if they are no good at the job? Where’s my “out”?

Will this agent be better at managing my business than I am? Do they have the capacity to grow the business enough to more than cover their cut?

How much does the agent understand about Amazon rankings, Google PageRank, Twitter, Facebook Pages, Goodreads, SEO, cover design, formatting, editing, CPC, CPM, LibraryThing, regional targeting, AdWords, blogging, spam laws, Shelfari, or blurb copywriting?

How much do they know about tagging, proofing, pricing strategies, DRM, giveaways, digital piracy, EPUB, Kobo, hyperlinks, mailing lists, MOBI, effective back-matter, Smashwords, KDP, or PubIt?

I would want all of those questions answered before I considered hiring an agent as a project manager. I would want the contract to be performance related where if the agent is not hitting key targets in terms of operating the business and growing the business, then I have the option to dispense with their services and they have no claims to any portion of my royalties.

If an agent wasn’t willing to agree to that, I would run a mile.

About David Gaughran

David Gaughran is Irish, living in Prague, and the author of Mercenary, A Storm Hits Valparaiso, Let's Get Digital, Let's Get Visible, and this here blog.
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50 Responses to Major US Agency Moves Into Publishing. Or Do They?

  1. JJ Toner says:

    Typo: Passive Guy shd be Passive Voice.

    You could add StumbleUpon in there with Twitter and Facebook.

    JJ

    Like

    • Typoman is back! I was getting worried…

      His blog is called “The Passive Voice”, but he himself is “Passive Guy”.

      I could have added StumbleUpon and a 100 other things. The point is that being a very good agent doesn’t necessarily mean you will be very good at managing a self-publishing business.

      Like

  2. JJ Toner says:

    You could also ask how much they know about POD services like CreateSpace and Lulu.

    JJ

    Like

    • You’re right, and a thousand other things too…

      Like

      • Avon’s epub arm offers POD as a part of the deal. Doesn’t that change the royalty picture? ( I am a novice at this.)

        Like

      • It really depends on your contract. I would imagine there are different royalty rates for e-books and for print books (whether POD or not) in the contract. They can vary greatly from publisher to publisher (especially among the smaller ones), but for e-books with the larger publishers, “25% of net”, which is 17.5% of the e-book price in reality (before agent’s cut), is standard enough.

        Like

  3. hollistergrant says:

    My favorite quote from Dustin Hoffman’s character Bernie La Plante in the movie Hero, when he’s explaining life to his kid:

    “You remember when I said how I was gonna explain about life, buddy? Well the thing about life is, it gets weird. People are always talking ya about truth. Everybody always knows what the truth is, like it was toilet paper or somethin’, and they got a supply in the closet. But what you learn, as you get older, is there ain’t no truth. All there is is bullshit, pardon my vulgarity here. Layers of it. One layer of bullshit on top of another. And what you do in life like when you get older is, you pick the layer of bullshit that you prefer and that’s your bullshit, so to speak.”

    Like

  4. David, I’m really enjoying your posts. You have a good perspective on the publishing world and your blog is one that I’ll be checking as regularly as Konrath’s.

    Thanks for the insight!

    Like

  5. Well presented post.

    Something along the lines of a yearly performance review/assessment and an opt out option based upon it could work.

    Like

    • Yeah the contract would have to be pretty tight. You don’t want them just firing up the book and letting all the promo work fall on you, and them collecting a percentage regardless of their performance.

      Like

  6. Great article, David. I’m linking it on my blog. As someone who is repped by DGLM, I like having the option, should submission turn into a worst case scenario. I am curious as to what the publishing houses think of this endeavor. Since a client wouldn’t elect to do this until after the houses have had their go, I think it’s safe to say they shouldn’t be threatened by the move.

    Like

    • I think that once it’s clear that they are not moving into “publishing” per se, they should be fine with it. However, some may have an emotional reaction that prevents them from viewing it rationally. I expect it will all settle down in short order. And it’s certainly better, from their point of view, than the agency becoming a competitor.

      I don’t think they should feel threatened, but who knows really, there are so many changes going on that people don’t always act rationally.

      Like

  7. Matthew Dean says:

    Always a great resource for self-publishing. Thanks for not only sharing your thoughts on the subject, but explaining some of the roles involved along the way. Also, I’m totally using your list of things to ask agents.

    Like

  8. It’s hard to see why any “new” writers, not already locked into the old publishing model, would want a traditional agent. The few benefits they can still confer are likely to be redundant in the next year or two.

    By contrast an agent who understands and embraces the new world is likely to be more than worth their percentage at this stage. Especially so if they are helping by-pass the Big Six shareholders and getting the writer direct to readers, with Amazon-style royalties.

    But so far it seems the few agencies moving that way are focussing on their backlist clients, not the up and coming writers.

    Which leaves us with little choice but to argue our case with the old-world agencies, or go it alone on all fronts.

    Onerous that might be. And it’s time better spent writing, that’s for sure.

    But as everything becomes digital and a writer can e-publish globally without leaving their desk, old issues like foreign rights will soon become a thing of the past. Pay for a translation and fire away. Pitching for TV and film rights might once have been an agent’s job, because they had the contacts and could open doors. But that is so last year. Good e-sale figures will open many doors, and contacts are just a google search away.

    By the time the old world agencies finally go under, and the new world agencies get around to looking at new clients, we “indies” might just have found we don’t need them at all.

    Like

    • You’re right Mark. I have a healthy dose of skepticism when it comes to agents, and especially when it comes to what they could do for me. With each book I sell, that level of skepticism rises. So I would imagine you have it in spades.

      When the fax machine allowed businesses to contact each other in almost real time around the world, import/export agents were soon out of a job. When the internet rolled into town, that killed the rest of the middlemen. If you wanted to buy a widget in France, you just emailed them.

      In the last 20 years, literary agents primary role has been the selling of books to publishers. Print sales are down (and will continue to drop). Bookstores are closing. Many writers are deciding to self-publish. This cuts agents out of the loop.

      So they are trying to reinvent themselves. Some are choosing to become publishers. Some are hunting in the Kindle charts for authors they can shop to publishing houses. Other are positioning themselves as self-publishing advisers.

      I think the middle option is the smart move. I think the first one is unethical. My problem with the last one isn’t ethics, it’s competency. Can an agent do all these things better than I can? 15% better? I have my doubts.

      Like

  9. The agency in question, Dystel & Goderich, have written another blog post today to clarify some outstanding issues:

    http://www.dystel.com/2011/06/answering-questions/

    Like

  10. Werner says:

    I just can’t get past the agency relationship getting 15% of each work an author creates and produces – for all time. I think for this “Project Management Service”, the model should be one with a defined income (performance) cap and within a definite time frame.

    Obviously, this service will most benefit established authors who are able to produce several books a year, and/or with large backlists.

    As it’s been oft said, “in order to be a successful writer, you need to treat your writing like a business”. The ultimate decision of whether or not this is a viable service lies with each author.

    Like

    • I also have an automatic negative reaction to anything like this. And, I would never consider or advise anyone to consider any arrangement which didn’t have some performance related element to it that gave the writer a way out of the contract if they were unhappy. I would also want it time-limited. In fact, there are so many things I would want in that contract that no agent would probably touch it.

      However, I’m trying to be open-minded. Let’s fast forward a few years. Let’s say we have a number of these agencies doing this now, and we can look at their performance. What if there was one agency who had a track record of growing their authors’ sales by, say, 50% on average. Would you be interested then? I might be.

      Like

  11. Paul Pender says:

    In the screenwriting world, which I inhabit, some agents have mutated into managers. It seems that this latest shift is an attempt at doing the same thing in the book world. I remain unconvinced, but I will keep an open mind. Meanwhile, I am in the process of turning down an offer from a legacy publisher on my first book, The Butler Did It – the true story of my curious friendship with a serial killer. I have been persuaded by you, David, along with Joe, Robin et al, that self-publishing is the future. At the very least, it’ll be a great adventure.
    http://www.paulpender.com

    Like

    • I’m sorry Paul, your comment was caught in the spam filter and I only saw it now. Not sure why.

      Self-publishing is a great adventure. And I think if you have any kind of entrepreneurial spirit you will enjoy it. Your book sounds interesting, and if you received an offer from a publisher, you can take that as a vote of confidence.

      Like

  12. Paul Pender says:

    I just posted my thoughts on this on Joe Konrath’s blog. I feel strongly about it, having endured a manager and an agent at various points of my career, so I’m reposting here:

    In the screenwriting world which I inhabit, some agents mutated into managers a while back. Agents and managers now share an uneasy co-existence.

    Is that what is currently happening in the book world? Are book agents, realizing that their main raison d’etre is increasingly obsolete, trying to re-invent themselves as managers?

    It should be noted that managers in the film world often claim a contractual right to a producer credit on their clients’ movies.

    This suggests that the new agent-managers in the book world may be opening the way to claiming a publisher credit on their clients’ books. I would proceed with caution.

    Like

    • Hey Paul,

      I read your post on Joe’s blog with great interest. I have mixed feelings about this development myself.

      I don’t think it’s the same as agents launching their own publishing imprint. I think there is a qualitative difference with what DGLM are proposing, as they are not controlling the rights, and are thus not the publisher. They are being paid, essentially, for being business managers.

      Now, we can have an argument about whether that is a good idea or not but I don’t think it’s a conflict of interest like launching your own publishing imprint is.

      Personally, I would have a problem handing over a percentage to anyone, unless they could guarantee me a huge number of readers that I was sure that I couldn’t get for myself. I could see a publisher doing that, if they backed the book. I’m less sure what kind of guarantees an agent could offer.

      Dave

      Like

  13. David! Great post. I really like the questions you outline about what an author needs to get clear with an agent before accepting a deal like this. If your agent doesn’t understand social media, then you might as well learn it yourself.

    Like

    • I think, in general, you would need to know what you are getting for that 15%, to have it spelled out in the contract, and to have some “out” if you are unhappy with their performance.

      Like

  14. Neil says:

    If I may note, my graphs are up (tardy, but up).

    http://ebookcomments.blogspot.com/2011/06/april-2011-ebook-sales.html

    Oh, I do wonder about agents ‘earning’ their 15%. I’ll follow Joe’s blog to see how it works.

    Neil

    Like

    • I’m skeptical. I would rather let the dust settle and see how some of these “estributors” perform before forking over a percentage.

      Lovin’ those graphs, will take a closer look tomorrow. Day off “thinking” today!

      Like

  15. David,
    I think the naysayers have the correct reaction. At the end of May I released an eBook on Amazon, B&N, Smashwords, etc. It took me probably 6 emails to sort out a cover design with a designer living on the opposite side of the glob [Wellington, NZ]. It took me a couple of days to format for Kindle, for Nook and for Smashwords. Half a day sorting out accounts at each site. The most time consuming was editing and following through with the editor all comments and red ink markings, which would be typical in any structure. So for something like three days work at most, the agency model proposed is seeking 15% of royalties from e.g., Amazon, i.e., 15% of 70%, instead of say 15% of 15%. Wow. For ‘project managing’ an ebook. Wow again!

    Just let me thump my head against this brick wall for a moment.

    Totally unbelievable.

    John Hindmarsh
    http://www.JohnHindmarsh.com

    Like

    • Hi John – your comment got caught in the spam filter – apologies.

      I don’t think publishing an e-book to a professional level is rocket science. I think that if you are smart enough to write a good book, then you are smart enough to learn the stuff you need and to outsource the rest appropriately.

      I guess what people would be looking at is the marketing side. Could the push your book to a higher level? That would be the big question.

      Also, it might be a different situation if you had 30 – 40 titles out like Joe Konrath. Just basic maintenance like updating the back-matter on all titles when you release a new one must be extremely time-consuming.

      I would still be skeptical though, and would want all sorts of questions answered (and a very tight contract).

      Like

  16. Aonghus Fallon says:

    What is an agency bringing to the client re e-publishing? Their years of experience in this area? Their ability to position an e-book in such a way that it stands out from the crowd?

    I’m reminded of an old sketch on the Larry Sanders Show, in which some film star is yammering on about the poverty in New York and seeing hobos, sitting with their dogs on the sidewalks, begging. He reckons the dogs must all be thinking the same thing – ‘Christ! THIS is what it’s like to have an owner? I could be doing this myself!’

    Like

    • Heh. Loved that Larry Sanders show.

      That’s the big question. Agents know how to sell books to publishing houses. Do they know how to sell books to the public? It’s a fair question, and would probably vary greatly from agent to agent. Can they do it better than you? I don’t know. I’m sure a few of them will turn out to be good at it, and I’m sure plenty will turn out to be awful.

      Like

  17. belleamaris says:

    Hi David,

    I’m really enjoying your posts! Mostly cause we seem to be operating on the same wavelength so far:) Yup, I can see this model working out fine in the future, but I am beginning to have concerns now. That 15% figure… The way things are going, there’s really no way to know right now if it’s an inflated one for the services on offer as such services have yet to be probably defined/valued in the ebook world (which one might say holds potentially different challenges to trad publishing).

    Also, just thought about this now but… the point you were making about agents as publishers and behaving like certain realtors etc… I actually think that danger of conflict of interest is still present even if agents are estributors and not publishers… if ebooks become clearly more profitable than traditional books, won’t agents their clients self-publish no matter what, even at the expense of a traditional publishing deal? I know this sounds unbelievable but once the dust settles and the publishing industry professionals see the money as being in ebooks instead of print, estributors/agents might be motivated to draw on the 15% for ebooks at the expense of sacrificing traditional publishing deals an author might be more interested in pursuing… You see, this would be the ‘best deal’ money-wise for agents and author, BUT need not be what the author actually wants (for eg if author’d rather sacrifice the ebook dough to see ur book in print)… Just a thought hmmm… hope I explained this properly… badly in need of coffee:DD

    Like

    • Ok just had that coffee… or rather tea… and realised that last scenario I posited’s probably just the devil’s advocate in me theorising… will probably hardly happen in practice, and even if there’s a risk of a conflict, the value of services provided might make up for it. Cheers!

      Like

      • I think it will happen in practice, and I think that’s a good thing. You don’t want your agent to advise you to take a trade deal when they think you will make more from self-publishing.

        Like

    • Hey Isabella,

      But isn’t that a good thing. Isn’t that what writers want? If a publishing house is offering a $20,000 deal, and the agent thinks you can make $50,000 from self-publishing, don’t you want your agent to advise you to self-publish?

      Dave

      Like

      • Heyya,

        Yup, it’s a good thing. I think my initial comment was influenced by a premature suspicion of agents’ motivations being coloured by money-making considerations over anything else (for eg ignoring the author’s preference to take trad pub deals at the expense of ebook sales because of an emotional need to be published by the Big 6:D)…

        The thought of ‘motivation-colouring’ became abnormally large in my mind, which makes me wonder just how suspicious authors are of any traditional publishing professional to the point that I became overly-paranoid and thus illogical:) As things stand, the real potential conflict (if any) would stand with agents who purposely (and unprofitably) steer clients TO legacy publishing and not the other way around, as Barry’s correctly pointed out…

        Anyway, yes, I do (as usual, dammit!) agree with you, it seems:) Cheers:)

        Like

      • p.s. oh and didn’t mean to imply that agents shouldn’t be primarily influenced by money-making motivations, seeing as we’re all trying to make money here… Though the best agents seem to have mastered juggling money-making with a host of other author needs, money/success is after all the main goal… if I was doing this for art’s sake, I’d probably just make my work free for all time:D… bound to get massive circulation through the ages then…. hmmmm…

        Like

  18. hmmmm, this darn thing changed my name… belleamaris was meant to be me, in case ur wondering…

    Like

  19. When there are seismic shifts in industries where intermediaries can claim power for their “access,” you’ll may see scrambling to re-position the deck chairs – but the ship’s still going down. My hunch is the creation of a host of new paradigm groups trying to offer a value-add in the e-publishing route, however as the technology and market matures, their value will decrease. Why have an agent help with book design, formatting, or routine production chores like editing if you can coordinate it all yourself? And does anyone really believe that they’ll put in the literally hundreds if not thousands of hours it takes to rise above the noise level and get a book visibility and traction in a market that’s rapidly becoming a meritocracy? To me, if someone was offering that deal at, say, 10%, and could demonstrate they were effective in a reproducible manner, the only real value would be on the marketing side. I have plenty of editor contacts. I have plenty of book designers. I can get a book formatted for a song. But it’s the marketing – actually, the PR – that will connect the effort with the reader.

    In the past, traditional publishing leveraged its shelf space and distribution system to command the lion’s share of the revenues from the sale of the product. Those criteria are now largely non-issues, and will drop to near zero value within days, not decades. So IMO any new author will be self-publishing, and perhaps looking for representation on film and international. The trend line is clear, and I think the only thing to argue over is the timeline.

    There are going to be a lot of agents scrambling to create a new value proposition to pitch over the next 12 to 24 months, that’s for sure. Sort of inevitable – think brick and mortar travel agents, or traditional stock brokers versus discount or on-line trading platforms. The value of the personal touch, especially when selling access, drops through the floor.

    I think we’ll see the reviewing biz hit the wall next – I predict that avocational reviewers will garner followings that will increasingly sway the consumer, and will thus obviate the established mainstream pundits (mainstream being synonymous with cronyism). Just as the blogsphere has largely replaced traditional media for many. That too is inevitable, and largely positive for everyone but the industry.

    These are exciting times we live in.

    Russell Blake
    http://RussellBlake.com

    Like

    • Hi Russell – my spam filter has been overly aggressive over the last couple of days and blocked your comment – sorry about that.

      You are right to focus on the marketing question. That’s the only place I could see this kind of deal adding value (aside from being a time-saver). The question you have to ask before signing away a percentage – whether that’s to a publisher, or to an agent offering this kind of service – is how many extra readers are they going to bring me that I can’t get for myself? Is it worth it? I’m sure some agents will be good at this. I’m sure many won’t.

      Interesting point about reviews. I rarely read newspaper book reviews anymore – now I get most of my recommendations online or from friends.

      Like

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