Auctioning Book Royalties

A huge number of books are published each year and so only a few ever get reviewed or even stocked in bookstores. It's difficult for publishers and bookstores to predict which books will succeed. I propose that publishers auction off some of a book's royalties shortly before a book is to be published. For example, a publisher could auction off one hundred contracts on a book that each would pay its buyer one cent for every copy of the book that was sold. Publishers would have to make advanced copies of a book available to people considering participating in the book's royalty auction.

The price that a book's royalties sold for would be the market's best estimate of the future success of the book. This price, therefore, would be a useful signal to reviewers and bookstores. It would also help the publisher determine how much money to spend on marketing.