Foreign rights are, increasingly, the way to pay off those superheated advances.

Some years ago the editorial director of an Austrian publishing house for which this writer was scouting quit her job. Why? Because in order to stay in the black she found she had to buy more and more books by American authors. Finally she rebelled against what she saw as a cultural takeover.

This may have been an extreme reaction -- and certainly an early one -- to increasing U.S. penetration of the world literary marketplace. From today's vantage point the editorial director's objection carries an ironic twist. Now it's Americans who fear the results of takeovers by Germans.

To be sure, the two situations are not quite analogous. There's been no indication that under German ownership any U.S. publisher is being nudged to acquire translation rights in German titles. And although the German government, together with the international division of the German Publishers and Booksellers Association, has opened an office in New York to promote the publication of more of their country's literature in English translation, Americans will probably go on being less interested in books from abroad than foreigners are in ours.

Yet a change could occur; there are signs of it already as we enter the era of the Euro. At the latest Frankfurt Fair Maria Campbell, a member of the New York scouting community, observed a growing trend: European publishers selling their forthcoming books to one another.

Hal Fessenden, handling foreign rights for Viking Penguin, is of the opinion that many of the publishers he and his colleagues deal with are finding English authors more appealing than American. "They seem to think the voices are fresher there," he says.

Be this as it may, the continuing importance of foreign rights sales to American authors, agents and publishing houses can hardly be overestimated.

Approximately 15%-20% of Richard Curtis Associates' revenue, for instance, now comes from foreign rights sales, made mostly by the firm's Amy Victoria Meo and cooperating agents overseas. But for the splitting of commissions with those agents, the return would be even greater.

Other agents say the percentage of revenues from foreign rights sales might be as high as 25%. Rights managers at publishing houses seem less sure of the figures, but agree that many a book's profitability -- or lack of it -- is determined by its reception beyond our borders. Along with Hal Fessenden, Doubleday's subsidiary rights director Carol Lazare and Karen Weitzman, v-p. and director of foreign rights at Simon &Schuster, point out that foreign sales often serve the highly desirable function of helping to recoup domestic advances. Weitzman appears to speak for all in her line of work when asked if foreign rights business is more important to her company now than in the past. Her answer: "Definitely yes!"

In this time of economic turmoil the question arises: How sound are overseas markets?

Lazare finds that Germany is holding its own, while countries that had begun to show strength, e.g., Korea and Japan, are now "back-pedaling." Helping to compensate, she observes, "the Chinese are arriving in force."

In Linda Biagi's view, "The Asian market never was significant in terms of rights income. If you're talking about export sales of the books themselves, maybe there was a boom. Japan has been in decline for five years; there's been more activity in China [again Taiwan] than in Japan."

Biagi, director of international rights at Little, Brown, expects the repercussions on U.S. publishing from the Asian crisis to be more dramatic this year than in 1998. Britain, she believes, will be stuck in recession; Scandinavia, once thriving, will continue to slip, and Germany's political shift in the latest elections is likely to exert "a damping effect." On the basis of Elisabeth Schmits's experience, England has become a tougher market in the past couple of years. "They're often the last to buy," says Grove Atlantic's v-p and sub rights director. Her "best money" these days has been coming from Germany and occasionally Japan and Italy.

Brenda Segel, v-p and director of rights, domestic and foreign, at HarperCollins, shares the common perception that Japan, Korea, Russia and some of eastern Europe are "precarious" customers.

Danny Baror, whose Baror International, acting on behalf of fellow agents, deals in foreign rights exclusively, sees Britain coming out of -- rather than sinking into -- recession. For him it's a top market. For the most part, Baror is taking a cautious approach to Japan. With the yen at a disadvantage against the dollar, publishers there can be paying double what they paid a few years ago to meet the same asking prices. And since they have a substantial inventory awaiting publication (it can take them three to four years to get a book translated and into print), purchases have declined and Baror is withholding some titles until better times.

The Territorial Question

The issue of territoriality in the world English-language market has become a cause for concern. HarperCollins's Segel confesses to being conflicted. "I don't know how realistic it is to insist on exclusivity. I'd like it if Australia were an open market, like Singapore and New Zealand, though it would be very hard on Britain. On the other hand, I'm conservative -- I believe in observing contracts." With online selling and other developments in mind, she adds, "At the same time I have to be a futurist. We can't fight what technology brings."

Likewise giving serious thought to the situation is Penguin chairman Michael Lynton, who sees the separation of markets "slowly being chipped away. The Internet accelerates the process," Lynton says, predicting "The Commonwealth will be pitted against the U.S." Rather than litigate, he believes U.K. houses will work out arrangements to publish day-to-day with their U.S. opposite numbers.

Apropos of this forecast, agent James ("Jimmy") Vines reports that on the morning following a recent sale to Dell his British co-agent Patrick Walsh relayed offers for the book from alert London publishers. Each attached a condition: "If you can't give us Australia and New Zealand, we can't do business." There was a further warning, to the effect that if Vines can't sell them books at the same time the U.S. publisher buys them, forget it.

"One of our authors," according to Vines, "got a very good British deal. But the American edition came out first. Although it was only by five or six weeks, the British publisher felt they could have done a lot better if they'd got theirs out first. We used to just negotiate advances and royalties. It's gotten harder now-we have to pay very close attention to other factors."

The Role of the Scouts

For a fuller appreciation of the current foreign rights picture, more notice must be taken of scouts. As they proliferate, competition among them has grown intense. Most have a spread of clients in a number of countries, and the kinds of books desired are likely to vary from client to client. "It's like being a post office," sighs Mary Anne Thompson. Germany's Dr mer, she says, is interested in hearing about practically any book, but some other houses specialize more. "You've got to cover everything," Thompson concludes, "but not unload it all indiscriminately on every publisher."

Scout Maria Campbell finds that with the merging and consolidation among American publishing houses, there are fewer books to cover-making life a little less pressured for her and her staff. On the other hand, with European publishers showing increasing interest in one another's lists, there's the likelihood that they may acquire fewer titles from the U.S. Another change in her business is that its pace has quickened. "Scouting now," she says, "is like being on a daily beat for a newspaper."

Christina McInerney, who feels much has changed since she went into scouting, sensed "tremendous anxiety" at this year's Frankfurt regarding the tie between Bertelsmann and Barnes &Noble. The online sales made possible without regard to international boundaries are viewed as a threat. The publisher was already thought to be in a strategic position to buy world rights and lay them off on its own companies, perhaps undercutting authors', agents' and publishers' preferences as well as whatever leverage they've had over prices paid.

The Small-Press Position

What of the small and niche presses? How promising are their prospects overseas?

Michael Bessie, of Cornelia and Michael Bessie Books, discerns opportunities for independents who publish works of quality that the big trade houses pass up for apparent lack of bestseller potential. He points out that each year "one or two" such titles do become bestsellers and may even achieve international success.

Martin Shepard, who runs The Permanent Press with his wife Judith, reports recent sales in "unexpected places." These include Italy, Greece, Poland and the Czech Republic.

Some American specialty publishers, among them SYBEX, which features software, hardware, Internet books and computer games, fare unusually well beyond our borders.

When they are really struck by something still to be published and not yet validated by reviews and bestseller status, editors -- wherever they are -- tend to throw caution aside. By the time glowing reviews were appearing here for Atlantic Monthly Press's Hullabaloo in the Guava Orchard by Kiran Desai, it was already an international success. Recession and threats of recession seemed to have evaporated in countries where publishers felt they had to have this first novel.

While big sums continue to be committed to big books in Frankfurt, the kind of bidding frenzy that erupted during earlier fairs is not so often encountered now.

Still, as already noted, Frankfurt continues to exert its pull. Elisabeth Schmits indicates that when it comes to selling rights, "It's so important to meet publishers face to face there even if they do come to New York. There's no substitute for presenting a book person to person, seeing the light in someone's eyes." A special group of American authors has cause to be happy with the foreign scene. These are novelists who happen to be even more popular abroad than in their own land. Among them are Paul Auster, Martha Grimes, Noah Gordon, Martha Cooley and Barbara Wood. Authors of historical fiction almost always do better in Europe than here.

A particular awareness is now required of those dealing in foreign rights by the globalization of the field. As Linda Biagi puts it, "Ten years ago it was okay not to know everything that was going on in the world. Today you have to know."