What Can Magazines Learn From an Air-Conditioner Company?

The other day I had a company come and remove two air conditioners from my office in order to clean them, store them for the winter, and return them in the spring. It wasn’t cheap: $269 for the first one and $249 for the second. But I like air conditioning, and I figured it was worthwhile to care for the units properly.

The surprising thing is that the company isn’t charging me a penny until they return the units in the spring. They are essentially floating me partial credit on a job of more than $500.

I wouldn’t have been at all surprised if they had asked for full payment up front; perhaps the most typical arrangement would have been to charge me some money up front and the rest upon reinstallation. The one option I wasn’t prepared for was the one they chose.

This company immediately joined our customer-service hall of fame.

This transaction reinforced for me the notion of how random our economic system can be. There have been some services I’ve paid for up front and waited weeks or months to receive. In other cases, I’ve been billed as things went along, and only in rare cases (and usually with small stakes, like dry cleaning) have I paid fully upon completion.

Here’s another example that illustrates the unpredictability of such things.

If you’re a journalist writing for a big magazine, you negotiate a fee up front but usually don’t get paid until the article is accepted or, in some cases, until it’s published. Expenses typically aren’t reimbursed until you’re done either. Which means that if you’re working on an extensive piece, which might take several months to report and write, you are working for free and laying out your own money for travel, etc., and you get paid only if/when the magazine accepts the piece.

If the magazine doesn’t accept the piece (for reasons that often lie well outside the writer’s control), you receive a “kill fee” of perhaps 25 percent of the agreed-upon rate. All around, this is a horrible deal for the journalist. When I used to work as a magazine editor, the worst part of the job by far was having to kill a piece, and it’s one of the reasons I stopped being an editor.

If that same journalist makes a deal to write a book, however, the contract is usually structured so that he gets 25 or 30 percent upon signing, with the remaining portions paid upon delivery of the manuscript (or sometimes even delivery of half the manuscript), the hardcover publication, and then the paperback publication. Also, book manuscripts are rarely “killed” as magazine pieces are.

When you write a book, the publisher is essentially serving as a venture-capital firm investing in your work. When you write a magazine article, the magazine is serving as a — well, I’m not sure what the analogy is, but it’s not so pretty. (Your suggestions are welcome.)

I never thought I’d suggest that magazines act a bit more like air-conditioner maintenance firms, but perhaps it’s time.


matt

Unwanted A/C units are apparently quite valuable. When I was moving, I looked around for someone to take it. I found several places online that were more than willing to come pick it up for free. Whereas, no one wanted to waste the gas to pickup other items like mattresses. Something to do with recovering valuable scrap metals from A/Cs. Anyhow, I put it out for them, and I think someone walked off with it before the pickup company even showed up.

No need to throw it in a landfill. In fact, I don't even think its legal to do that.

Mike R

If they're really clever, the A/C guys own an A/C rental company in Argentina right now.

Stephen M (Ethesis)

1) Leaving the A/C units in the windows for the winter will probably destroy them in short order, and b) dramatically increase heating bills because YOUR WINDOWS ARE STUCK OPEN.

I'm curious as to why? I've lived in many places where window units were permanently affixed and never removed and did not seem to be destroyed.

The windows were no more stuck open than they were when they were being air conditioned -- the unit insulates them when it is not running (and the bags people often put over them only increase the r factor.

Interesting.

Adam

I would have walked the A/C down to the street and sold it to the first guy who offered me $10 (giving it for free wouldn't work, because it would be assumed that something's wrong with it).

No envinronmental guilt, and much cheaper to buy a new one than to clean and store the old one.

Mr. Kid

Mr Dubner:

For your hall of fame: You may also be surprised to know that I went out to lunch today and they didn't ask me to pay for it until AFTER I ate it!

David

It's clear that there are a *lot* of suburban dwellers reading this blog.

1) Leaving the A/C units in the windows for the winter will probably destroy them in short order, and b) dramatically increase heating bills because YOUR WINDOWS ARE STUCK OPEN.

2) Bottom of the closet? Have you even been in a typical NYC apartment? Most people have things to put in there, like clothes, shoes, roommates...
Renting a tiny storage unit somewhere could easily be $75/month -- do the math for 6 months and you get pretty close to his fee. And you have to get them somehow, which can be time+money.

3) Piece of mind for installation and removal -- when you are basically installing a missile 100+ feet above the the ground, you want to make sure it is secure and it is nice to have someone else assume the liability (ie, it is a form of insurance against killing someone Looney Tunes anvil style).

jacob

ok, to me it seems like at least 50% of the people here didnt really "get" that these are OFFICE air conditioners, they draw and use much more power, they are much bigger,and they are much more expensive, than the used A/C unit you sold on ebay for 20 bucks or the one you bought at a garage sale for 10. factor in hauling fees and "just throw it out" is not an option. i agree with #39 who said

"Either I'm incredibly stupid or I'm living in an alternative universe, but it seems to me that the a/c storage company and the writer vs magazine are actually working in identical ways.
The vendor (a/c company or writer) must complete the service before receiving payment from their customer"

-yea, that seems right

Ben

The entire concept of a kill fee is overly generous on behalf of the Magazine. If you write a bad article, they still pay you 25%??? I'm in the wrong business.

Certainly, if the guy brings you an air conditioner that doesn't turn on, you're not going to pay him anything at all.

I've seen much worse arrangements for creators of content than the above description. But at the end of the day...it's still negotiable. If the writer doesn't like the terms, the writer needs to raise his value proposition to the magazine. Write a book, win a notable award, (as some writers on NYT have done). Build a following that you bring to the Magazine in the form of readership.

I, for one, come to NYT to read Tom Friedman's articles...and I hope he's well compensated.

Ed

Perhaps it is because I don't write is the US but I've probably been spiked once in 8 eight years freelancing and I've always been paid on publication. I always write commissioned articles and never submit on spec so I am secure in knowing that what I write will be used. For magazines payment can be crap - up to four months waiting. But for newspapers it can take not much more than a week from start to payment. True rates haven't increased too much and under the current climate won't but the internet has made it a lot cheaper to contact people and research.If you are productive and can file 500-1000 words a day it isn't a bad living.

jrh

The freelance system makes it possible for magazine editors to take a chance on unknown writers and offbeat topics. Writers would rather be stuck with a 25% kill fee now and again, rather than never get a chance at all.

I'm sure Mr. Dubner could negotiate a 100% kill fee now if he were still freelancing. But we can be pretty sure he's not, based on his a/c maintenance budget.

joseph

Glad to see capitalism is alive and well!

Putting the politically correct environmental stuff aside, anyone that would pay that amount to store what can be put on the floor of any closet is a further reminder of just how stupid nyc renters are.

Like the old saying goes, "There's a sucker born every minute!" which, should be ammended to also say "And a Manhattan renter"

No wonder why the savings rate in this country is below 1%, why save when you can throw away your money on a good old fashioned fleecing!!!

Bruno Borges

Oh, why don't you just turn those ACs off and, a couple of weeks before spring, don't you pay, what, less than $100 to clean them?

James

Why would you pay $500 to get two air conditioners cleaned and stored when you could sell them for $150 each and buy new ones for $300 each in the spring?

Bruno Borges

@Alex

Are you a Magazine's Editor? :-)

Just like IT Consultants, specially those who work as freelance, it's really hard to negotiate under these circumstances. Having to work in advance without get paid and not having sure if you are going to be fully paid, is complicated.

We usually have to tell our customers how much time it will take to develop a software, but this takes effort, time and actually a little bit of coding/planning/designing - which by the way, should be paid as well.

Joe

I'm a full-time freelance writer (10 years now). I don't expect to get paid up front, in full or part. What I do expect is to be paid by the terms of my contract.

Anymore, that almost always reads "on publication." (Used to be "on acceptance" was common, but not anymore.) But some publishers like to push the bounds on "publication" pretty far. I've waited three or more months after the issue went OFF newsstands to be paid; early in my career, I hit a record of 10 months on one story.

I think that's probably about as deadbeat as billing gets in almost any industry. And the reason this is the case is, as previous posters have noted, freelancers have no power. We're squeezed by competition and pretty much have to accept the terms we get, whatever they are. My "thousandaire" idea would be to create a freelancer's billing service with the power to charge interest on overdue invoices and eventually serve them with a collections agency, all for a nominal fee to the freelancer. But, like most freelancers, I don't really want the headache. I'd rather write...

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AaronS

All you did was pawn your air conditioners. Sure, they'll be glad to hold it for you until the spring (after all, I'm sure they have some carrying charges built in).

And if you fail to pay up, well, they now can sell your air conditioners for a hefty profit. They basically "found" two decent air conditioners, clearned and refurbished them, and will then be reselling them for up to several hundred percent profit--or at least for thier costs and other fees.

But I must admit that it is brilliant--it looks like great customer service.

Consider if it was a jeweler who agreed to drop by your home and pick up your wife's magnificent diamond ring. They agree to clean it and store it until a certain date (say two weeks later). Upon returning it, they are to receive $300. Well, now, if you don't pay up, I'm sure they are contractually free to sell your ring to cover the cost of their charges PLUS "other expenses" (which will be tacked on like crazy, I'm sure).

Think about it.

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discordian

huh.

Last week I took out three window units, vaccuumed them off, and stored each at the bottom of a different closet.

I think I'll charge my wife $750.

Maybe more if she makes me move them to the attic.

Jen

Thank you Peter, #23. My thoughts as well.

Not paying until the piece is completed shifts the risk entirely to the reporter. Risk is an important thing in journalism - who can afford to independently fund an extensive investigation, complete with verified sources? Most people would be hesitant to pursue an expensive story that may or may not pan out if they aren't even guaranteed a successful one will be published and earn them money. The quality will go down.

With this type of thinking, magazines will quickly loose the most talented writers to blogs. With no money up front, there is no incentive to publish nationally if you can generate ad revenue and a following on the web. Why bother with a magazine if your work may not be published and your expenses not recovered? If money can be made from a story posted on a blog, the risk from a magazine killing a story before publication isn't worth it.

The web will shift the power back to the writer, and magazines will be force to end this one sided relationship. We're already seeing blogs break more big stories than the media (particularly at local levels). The pressure of competition will force change or the publication will die.

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Andrew

#41: the renting conditions in Manhattan are highly unusual because of (you knew it was coming) supply and demand issues.

There are plenty of people unwilling to accept the terms. They live in another borough, Long Island, Jersey, etc. If they want to work or enjoy leisure activities within Manhattan, they also have to commute there.

In other cities the contrast is generally not as stark, but in any city where anyone would *want* to live downtown, you pay a premium for doing so -- more money for less space, generally no yard, etc. Living out in a distant suburb, you can usually get much more space for a lower price, but there is typically a far lower job density and there are usually many fewer leisure activities (concerts, theater, museums, professional sporting events, etc.), so it is much more likely that you will have to commute a sizable distance to perform these activities if you are interested in them.

Of course, if you work from home and all you want to do for leisure is be left alone to sip cocktails on your back porch, then you have made an excellent tradeoff. Then again, if you want to swing by some of the museums and galleries in Manhattan 3-4 times a week, you may regret having to commute from New Jersey to do it.

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todd

working as a plaintiff's personal injury attorney - on contingency. No, it isn't pretty when your case gets killed.