A radical fix for the broken book business

Note: Transcripts are automatically generated from episode audio, and are not fully corrected for spelling, grammar, and formatting.

MADELINE McINTOSH: We don’t need human writers anymore. We can just press a button and have any story we want. That makes no sense at all. The problem for the industry has not been a lack of content. The challenge has always been: How do you get great content that will stand out enough that consumers will pay attention? Creating more mediocrity isn’t actually solving the problem.

BOB SAFIAN: That’s Madeline McIntosh, co-founder and CEO of Authors Equity, an independent book publisher that’s flipping the math in the book industry. Madeline spent her career navigating technological challenges in the book business, moving from Random House to Amazon and then back again, becoming CEO of publishing giant Penguin Random House. Now, especially with the rise of AI, she believes books need a new model. We talk about how online communities like BookTok are remaking the marketplace, why authors are increasingly aggressive about marketing, and more. If you’ve got any interest in the future of books and reading, this is a saga worth tracking. So let’s get to it. I’m Bob Safian, and this is Rapid Response.

[THEME MUSIC]

I’m Bob Safian, here with Madeline McIntosh, co-founder and CEO of book publisher Authors Equity. Madeline, welcome to the show.

McINTOSH: Thank you, Bob.

SAFIAN: I saw you were reading a manuscript when we first came on, on paper no less, it looked like.

McINTOSH: Yes. Believe it or not, paper and pen, or pencil, still sometimes do the trick, no matter how many times I’ve looked through something on a screen.

SAFIAN: Listen, I love pen and paper. If we didn’t have it and had just created it, everyone would be like, “Oh my goodness, look at this fabulous thing.”

McINTOSH: Exactly.

Copy LinkWhy publishing keeps surviving every new disruption

SAFIAN: I’m a believer in it. The book industry has faced a lot of challenges: costs and competition from screens. Nobody under 30 reads anything longer than a caption, but it perseveres despite all the naysayers.

McINTOSH: It does, yes.

SAFIAN: If you were to describe publishing’s current state as a book genre, where are we? Are we heroic fantasy? Dystopia? Romance?

McINTOSH: Oh, that’s so interesting.

SAFIAN: Where would you put us?

McINTOSH: I would put us in maybe the romantasy genre. Publishing has been around for literally centuries, and every time we turn a decade or so, there is a new enemy, a new dragon who’s about to get us, and yet we come through it OK.

SAFIAN: And you have to be a believer too, right?

McINTOSH: Absolutely. That’s the thing about publishing. Every couple of years, there has been something that changes. In the ’90s, it was e-commerce. A decade later, it was e-books and audio, and now, of course, it’s AI. But I think the people who are still in the industry, one way or another, can’t help it. We’re addicted.

Copy LinkWhy a new publishing model can better align authors and profits

SAFIAN: You were CEO of Penguin Random House, which is one of the so-called Big Five, alongside HarperCollins, Simon & Schuster, Hachette, and Macmillan. Then you left to try this new model at Authors Equity, moving away from paying authors an advance and instead offering more of the back end. What sparked that shift? Did you have dismay about the existing system, or were you inspired by other things?

McINTOSH: No, no dismay at all. For one reason or another, I was often the person at the meeting point between the traditional part of the business and new emerging things like e-commerce and e-books. So I was keenly aware that every time we hit one of these inflection points, there are structural things that make it very hard for a large company to adapt. I kept in the back of my mind thinking, “Surely there’s another way to solve this puzzle.” The real lightbulb moment for me was James Clear. He’s an author who wrote Atomic Habits, one of, if not the most successful nonfiction books of the last decade. It has sold 30 million copies, and he loved his team at Penguin. Yet when it came time to encourage him to sign up for his next book, he was highly reluctant. Really listening to him about what bothered him about the existing contract, I realized I increasingly agreed with him, not with the position we were taking as a publisher. Out of that came the idea of, “What if we took a clean sheet of paper and just started building publishing to make it work in the modern marketplace?”

SAFIAN: Your approach moves some risk, or some part of the risk, from the publisher to the author. If the book isn’t a success, they get less, and you lose less?

McINTOSH: Sort of.

SAFIAN: They get less, but you lose less?

McINTOSH: No. We pay for everything related to publication: printing costs, advertising, sales and distribution, promotion, et cetera. All of that comes out of our pocket. We then recoup that from revenue, and the author always gets the majority share of the profit. The way the old model works is that you have very low royalty rates, but they get compensated by a very large advance or guarantee. That is great, but what it means is that if you hit a home run as an author, most of the financial advantage accrues to the publisher, not to you.

SAFIAN: So is this model more appealing for established writers who can afford to forgo an advance? I guess they’re also the ones most likely to get the biggest advance.

McINTOSH: Exactly. It’s really interesting, Bob. When we started and were sketching out on paper, “Well, who is this going to appeal to?” we thought, OK, it’s going to be the largest and most successful authors because they have the most to gain. But exactly to your point, those are also the ones getting these enormous advances. So the business model itself is not actually the thing that determines whether an author is going to work with us or stay with a traditional publisher. The authors who decide to come with us are the ones who really want a different kind of relationship. We’re a small team. We’re 12 people. We publish about 20 books a year, and for each one of those books, we’re really creating a unique publishing plan. The author gets to participate in making all the decisions.

SAFIAN: So if you’re an author who wants to be part of that side of the business, then you’re going to be more drawn to this. And I guess you have more control, and then you get more reward for the things you put into that portion of it beyond the writing.

McINTOSH: Exactly. That’s why we really are not for all authors. We are for the ones who absolutely want to be engaged and have input into strategic decisions like, “How quickly are we going to go to market? What should the book look like? How much should we be spending on paper?” They’re very wonky questions in some cases, and many authors would not want to have anything to do with them.

But for the ones for whom this is right, it’s really right.

SAFIAN: I was thinking that Authors Equity is not a particularly romantic name.

McINTOSH: No.

SAFIAN: It sounds almost Wall Street-y. Was that deliberate?

McINTOSH: Not really. I think probably every start-up has stories about the torture of picking its name. In our case, we had long lists of much more romantic-sounding names. The reality is the inspiration came from when Ben Affleck and Matt Damon formed their studio, Artists Equity. I went to the movie theater and saw the movie they did about the Michael Jordan story, Air. Sitting in the theater listening to one of the monologues about the rights for the artist, or the athlete in that case, I was like, “Yeah, this is what we’re doing.” Then I got home and said to my husband, who’s a novelist, “What about Authors Equity?” He said, “Well, if I heard it for the first time, I wouldn’t know what it is, but I would know I’d want it.” So that was the decision.

SAFIAN: That was enough. It was blessed by the right person. Yes.

McINTOSH: Exactly.

Copy LinkWhy long-term audience building matters more than chasing bestsellers

SAFIAN: Publishing has been such a hits-driven business. Is that the same in your model?

McINTOSH: Yes and no. I think we used to all live in a world where you had the publisher as the gatekeeper, who would anoint priority titles. In some cases, you essentially were manufacturing bestsellers. That’s not the world we live in anymore. In fact, publishers — neither Authors Equity nor Penguin Random House nor any publisher, really — have the ability to anoint a bestseller. I wish what we were able to invent was the silver bullet that was going to automatically get books to sell, but that just doesn’t exist for anyone. Certainly, it is harder to get books to sell now than maybe in the pre-podcast, pre-Netflix days. There are a lot of good things for consumers to pay attention to. But the thing we are able to do that is harder for a larger company is stick with a book over the long term. Is this a book that we can imagine selling more of in year two than in year one? If it feels like it’s a book of the moment and that moment is going to pass, we lean back. If it’s one that we can actually see growing different audiences over time, then we lean in.

SAFIAN: Can you explain how that growing different audiences works? Even in journalism, if you have your own following and your own audience, it’s that much easier for you to get a job, even if you’re writing stories about the news. I assume that’s some of the same thing you’re getting with some of the authors — that they already have their community around them that they can activate around their property. How do you then extend that once you get to year two, year three? I guess maybe year one is around their existing community.

McINTOSH: Yes. One of the first books that we published is called Don’t Believe Everything You Think by Joseph Nguyen. He had self-published — I think he’s now 26 — so he was a young guy who had self-published and worked on developing an audience on TikTok, and he had done very well. The book was really only available for sale on the TikTok Shop and on Amazon. When we did a deal with him, we allowed him to keep doing what he was already doing. Most publishers would say, “No, no, no, you have to stop doing that edition. We’re going to do our own edition.” We allowed him to keep going with his version of the book. We worked with him to create something expanded. It was slightly revised, and it was really designed to be an object that would catch the attention of a consumer in a bookstore. Luckily, we were right, and people who had never heard of him, who had never been on TikTok, came to buy the book in bookstores. From there, we moved on to recognizing that it is a great book for people to buy for people who are graduating. It is a great book for people who are struggling with mental health issues in their teens.

SAFIAN: Did you know that these were potential audiences from the book beforehand, or was this data you were getting back from the community of buyers and readers?

McINTOSH: It would be nice to think that we saw the whole chessboard, but not really. You’re paying attention to comments, reader comments. For example, there’s a whole thread about people talking about the application of Joseph’s thinking to decision-making, and that they find themselves overthinking and struggling with decision-making. So then, basic publisher trick: you go back to the author and say, “How about we do another book?” And we did that, and that one is called The Overthinker’s Guide to Making Decisions. So it’s about gobbling up any data that you can find, and that process starts at the beginning, way before you publish the book. As soon as you’re presenting the book to sales reps or booksellers or media, you’re targeting based on who you think the audience is, but then you get signals back. So you’re pivoting and looking for, “What if we tried it this way? Is that going to work? What if we tried it this way? Is that going to work?”

SAFIAN: It’s interesting. Authors Equity is an upstart, but of course you come from within the publishing industry, the traditional publishing industry, leading Penguin Random House. One of your co-founders, Don Weisberg, was CEO of Macmillan. You’re still on the board at Simon & Schuster, which distributes some of your titles. In my career, I had been an executive editor at Fortune, and then I became the editor of Fast Company, which was smaller at that time, and yet I found I could do things that I couldn’t do at the big place. Even now, I struggle with why not. Couldn’t you do any of this within Penguin Random House, or you couldn’t?

McINTOSH: That’s a very good question. It’s about priority, really. If you’re running Penguin Random House, with a hundred years’ worth of backlist, you have to think a lot about the precedent you might be setting. Every time you do a new deal, you have to think, is this going to unravel agreements that you’ve made with other authors over the decades? If you are the largest player in the industry, you have a lot to win, but you also have a lot to lose. There is this wonderful interplay that can exist between large publishers and small guys like us because the large publishers are investing hundreds of millions of dollars in supply chain, for example, which allows me to publish a book by being distributed by Simon & Schuster. I don’t need to own a warehouse. I don’t need to employ a sales force. I can essentially rent those. I can focus all of my human resources and all of my attention on working with an individual author and figuring out how we’re going to do this one differently. In this age where everybody’s pushing for scale, hyperfocus really is kind of a superpower.

SAFIAN: “Hyperfocus is a superpower,” Madeline says. So true. But how much impact can a small team really have without the resources of the Big Five? And can AI help fill that gap? We’ll talk about that more after the break. Stay with us.

[AD BREAK]

Before the break, Authors Equity’s Madeline McIntosh talked about rethinking the book publishing model. Now we talk about what algorithms can and can’t predict about a bestseller, why Hollywood isn’t the only afterlife for a book anymore, and how BookTok and Substack are impacting the industry. Let’s jump back in.

Copy LinkHow AI can support publishers without replacing writers

You were at Amazon when digital was first disrupting the book business. You mentioned AI earlier. How is technology helping or hurting books today?

McINTOSH: The people who are most aggressive about AI, I think what they miss when they’re looking at publishing and thinking, “Oh, this is where AI should be applied to publishing,” is, “Oh, we don’t need human writers anymore. We can just press the button and have any story that we want.” That makes no sense at all. The problem for the industry has not been a lack of content. The challenge has always been how do you get great content that will stand out enough that consumers will pay attention. Creating more mediocrity isn’t actually solving the problem. But as a small business, AI can do a lot for us. It cannot write the books we want to publish. It cannot ghostwrite the books we want to publish. So it’s not about content creation, but it —

SAFIAN: So you don’t worry about manuscripts that have been written by AI, or it doesn’t matter? If AI has been used, it doesn’t matter if the book is good.

McINTOSH: Honestly, I don’t particularly worry about that. If an author has used AI to help with research, that’s not for me to quibble with. We have a practice of being highly transparent with authors, so they certainly need to tell me if they have used AI in the creation of their work because, among other things, if they have, then the work isn’t really protectable by copyright. So it’s an actual business issue. What we have found is that if I’m working with an author on a manuscript and the author is dependent on the feedback they’re going to get from me as another human, I have asked Claude, “OK, play the role of a skeptical critic. What are the things that you would point out?” And that allows me to be a better partner to the author in highlighting the things that maybe he or she has not thought through carefully enough. Let’s be clear: It does not mean that I’m using Claude to edit the book. I’m absolutely not. I’m using it as a thought partner to help me be a better friendly critic in a way that the author needs me to be.

SAFIAN: You’re not relying on it as, Claude read the manuscript so you don’t have to.

McINTOSH: No, absolutely not.

SAFIAN: But instead of having a staff, a team of different people reading the manuscript, you can use Claude alongside yourself and get more leverage.

McINTOSH: Exactly.

SAFIAN: Nick Thompson, the CEO of The Atlantic, who’s been on this show and talked on our sister show, Masters of Scale, recently talked about The Atlantic’s licensing deal with OpenAI, and he argued that his content is worth more than standard training data, basically. How do you think about that for books? In some ways, it’s a new definition of the phrase “book value.” What is the value of books for training data? Is that part of your business model, too?

McINTOSH: We are so new and have, to date, so few books. I can’t imagine that the big AI companies are going to want to do a deal with Authors Equity.

SAFIAN: But you don’t necessarily see AI companies as a new revenue stream for the industry.

McINTOSH: I don’t. There certainly have been a whole slew of start-ups trying to figure out, OK, can we build a product that is AI as a coach, so that it’s the AI format of this book, so that the consumer can chat with it? I have not seen that work commercially yet. It certainly can work technologically. I just don’t see it being something that consumers are willing to pay for.

Copy LinkFinding more value in books beyond the printed page

SAFIAN: I mean, the commercial adjacency that has worked for the publishing industry is sort of the journey from a book to a movie. That’s sort of growing the interdependence between publishing and Hollywood based on IP and proven properties, Project Hail Mary a recent case in point. Do you think about a book’s value in that journey differently than a decade ago? What’s the journey of Authors Equity IP versus that of a traditional publisher? Is it all kind of the same?

McINTOSH: Well, I think it’s the same, except that we maybe have more space to think about how to get creative with an individual title as a way to extract value from it. So, for example, one of the first books that we did was Superagency with Reid Hoffman. We published this at a time when the AI conversation seemed relatively new, and instead of thinking of that book as just a rectangular container of a set of ideas, we were able to license some part of it to Wharton for an executive education program that they did. So it became a curriculum in that case. We licensed it to McKinsey for a series of reports and events that they did with Reid, and any publisher could have done that, absolutely. It is, though, difficult if you are working at a scale of publishing a thousand books a year to make time or space to think that creatively. Another book, The AI-Driven Leader by Jeff Woods, is swimming in the category that is AI, which is rapidly changing. Jeff knows that. Jeff is regularly updating the book, and he is thinking in terms of an integration between the book itself and his newsletter where, when you buy the book, you’re opting into his newsletter, where he will keep you updated.

SAFIAN: Yeah. How do you allow your book’s operating system to be updated in real time the way you can do with your Teslas, say, right?

McINTOSH: Exactly, yes. And obviously, you can do it very easily in the ebook edition, but with print and with audio, it takes a little bit longer. So this way, you never have to worry about that. You’re entering a whole ecosystem.

SAFIAN: Is it okay if we do a rapid-fire round in the last few minutes we have together?

McINTOSH: Absolutely.

Copy LinkHow BookTok and Substack are reshaping discovery

SAFIAN: All right, great. So BookTok, the segment of TikTok that produces book-related content. How important is that community? How important is that channel in driving real sales?

McINTOSH: It is incredibly important. Millions and millions of copies of books have been sold because of the community connection that developed there. It was very much born out of a sense of isolation that people felt during COVID, but it has stuck around, to the joy of publishers and authors everywhere.

SAFIAN: Substack.

McINTOSH: Yes.

SAFIAN: Talked about as a savior for writers, critiqued sometimes as a Band-Aid, a flash in the pan. Where do you view Substack?

McINTOSH: Well, I’m very pro-Substack. We, Authors Equity, have our own Substack where, with each issue, we’re really showing how the machine is working in terms of things that we are trying and being transparent about the results there. So I’m grateful for it that way, but then also I very much have it top of mind because we are publishing Hamish McKenzie’s, the co-founder’s, book, How to Save the Media, coming to bookstores this fall.

Copy LinkWhy taste, data, and audience clarity still decide what lasts

SAFIAN: How does the role of taste come in today as a publisher, sort of finding and blessing the new versus following the algorithm, existing trends, what’s working in the marketplace?

McINTOSH: It is both. It’s taste and data. A book is not like publishing a magazine article. It takes a long time for the author to write. Even when you’re operating as quickly as you possibly can, as we do, the production cycle is still much longer than in other media forms. The printers only have so much capacity at any one time. You can make or break a book based on getting it adopted by booksellers in a way that is not just being sold on Amazon but being sold nationwide. And that takes time. Be very wary of an idea or a project that’s going to quickly go out of fashion or expire. A book needs to last.

SAFIAN: What does it mean to be an author in 2026 that maybe it didn’t mean in 1996 or even 2016?

McINTOSH: Well, I think what it means is there really has to be a point to publishing the book. Writing books is hard. Publishing books is hard. And one of the first questions we always ask authors is, “What are your goals in this publication? Who is your audience? Who do you think your reader is? Who are you writing this for?” And if they don’t really have an answer to that, then that’s kind of a sign that it might not go anywhere.

SAFIAN: Because it is a business, right?

McINTOSH: It is a business. It’s not just an art form.

SAFIAN: Yeah. When you look at book publishing, traditional and otherwise, today, what’s at stake for the industry right now?

McINTOSH: Books require an investment of time that few other media products do, maybe no other media products do. And so we are, in some ways, swimming against the tide in terms of needing to capture the attention of a consumer and get them to hold that attention long enough for them to read the book and ideally be so electrified by that experience that they will tell at least one other person, because word of mouth is what makes books sell. In a world where attention is disrupted by whatever the latest news alert is, that is not particularly conducive to book sales. So that is more true now than it ever has been, but it has been true for a while.

SAFIAN: And are younger people less interested in books than younger people used to be, or is that a myth?

McINTOSH: No, I think that is a myth. And if you talk to somebody in college today and ask them what form they consume their books in, yes, many of them will say audio, as people of all ages say audio, but increasingly you really hear about print books, and they’re talking about the covers. They care a lot about the craft, and that is not something that I think we would’ve predicted 15 years ago.

SAFIAN: Whether someone is reading a book in print or reading an ebook or listening to it in audio, you have to sort of be indifferent, right?

McINTOSH: Totally.

SAFIAN: Any engagement is an engagement.

McINTOSH: Yes. Any engagement is an achievement, and I’m just delighted when they connect with a book in any format. I certainly listen to books as much as I read them on paper, so I have nothing but respect for every format.

SAFIAN: Well, Madeline, this has been great. Thank you so much for doing it.

McINTOSH: Thank you very much, Bob. Thanks for having me on.

SAFIAN: Listening to Madeline reminds me of my own trajectory as a journalist: getting people to engage is the foundation. A book isn’t a rectangle of paper anymore. It’s a community on TikTok, a curriculum at Wharton, a McKinsey speaking tour, a Substack, sometimes a Hollywood production. AI is only going to multiply those alternatives further, and this is critical: The original ideas and words are what ultimately deliver value — an audience, a business, an industry. Maybe AI will compress part of that process. I’m skeptical. Algorithms may be getting better at identifying what we might want to read next. I’m just not convinced they can write the next chapter, or at least not a next chapter that surprises and delights. I’m Bob Safian. Thanks for listening.