This story was written by Joseph Weisenthal.
Publisher HarperCollins plans to launch an internet-focused unit that will eschew author advances, according to a somewhat odd WSJ report. Besides eliminating advances, the currently unnamed unit won't accept returns from retailers for unsold copies, again offloading a business risk to third. Authors will be paid via some kind of profit share, although beyond that details are sketchy. There has to be more to the story though, because on its own, it's not clear how it would get away with its plans.
A possibility that makes some sensethough this is just speculation is that the publisher, which is owned by News Corp. (NYSE: NWS), is planning some kind of play on the print-on-demand model, opening up publishing services to un-proven authors (hence no advance), while reducing the risk of too much unsold inventory (no returns). Such a move would come amid increasing interest in this model, as well controversy at Amazon (NSDQ: AMZN), which wants to get POD publishers to use its service when selling books on the site.
By Joseph Weisenthal