Xlibris Backtracks on Agent Referral Plan

Acknowledging that his company "goofed," John Feldcamp, CEO of Xlibris, an online print-on-demand and publishing services company, said the firm has canceled a plan that would pay a referral fee to agents who encouraged some of their writers to use Xlibris services.

Xlibris is an online subsidy publisher that will produce a book for any author for a fee. Feldcamp told PW that the company hoped to get agents to recommend their "not quite ready for prime-time writers" to Xlibris. The agents in turn would have received a percentage of the fee paid to Xlibris for its services. "We got a bunch of support, but we also caught a lot of thunder from editors and agents who were against the idea. It struck a negative chord," he said. Feldcamp attributed the negative response to "a history of writer-related scams involving fees and agents. People are sensitive about the issue." Feldcamp said, "It was not our intent to cause a problem, and the program is not worth the trouble."

Like most Internet firms, Xlibris has had trouble securing new financing (News, Feb. 19) and was forced to lay off 20 workers earlier in the year. However, Feldcamp told PW that Xlibris was now in "good shape. We've got a lot of cash and a low burn-rate." Random House Ventures, an investment arm of the publishing house, is a 49% investor in Xlibris and supplied additional support to Xlibris after the layoffs.

"The rules of the game have inverted," Feldcamp told PW. "Large companies with complex infrastructures are at risk. They can't get smaller after being large. We went through that earlier this year. We took a bullet to keep from sacrificing our goals and we're less at risk." He said that Xlibris offers about 6,000 titles for sale through its site and has sold a total of about 375,000 copies of its books. "Some sell 100 copies, some sell 1,000. It depends on the author," said Feldcamp.

While the RH investment has been described in the past as a way for RH to share Xlibris's e-publishing technology, Feldcamp also characterized the relationship as "a strategic vision of what will happen to publishing over the next 10 years." He explained that technology is likely to make large corporate publishing "trivial. Publishing will change fundamentally. You see it happening now. Books can be published and take off without any help from big publishers. Random House wants to be educated in the new game."