Friday, July 13, 2007

The End of the Insanity

My publishing institute course ends tomorrow. I won't say which one it was, but it was in Manhattan and high-profile, so you can make your guesses from there. Now I can get back to what I do best - reject people. I mean, find new talent for the industry. Yeah. That's what I meant. Totally.

I did learn a tremendous amount, some of which I'll be happy to share with you (because it's not physically possible to share it all with you).

1. Editors do edit. In fact, they do a tremendous amount of it. The difference now is that publishing requires them to do their editing alongside acquisitions, pitches to higher management, and some promotion alongside the marketing staff. They're busy people. However, the rumor that they will no longer even look at a manuscript unless it is highly polished and ready for press is not true. Very often in non-fiction (especially memoir) they will get something through an agent that is disorganized but has that spark of brilliance that makes the editor passion enough about it to devote massive time and energy to turning it into a book that makes sense. They are less willing to do this with genre fiction.

2. Publishing is not generally a profitable industry. Yes, most of the titles on the Barnes and Noble shelves are from the big five corporations that have dozens of imprints that used to be independent companies, but just because you hear the words "giant corporation" doesn't mean a tax shelter on an island somewhere to hide the profits from the IRS. Random House recently revealed that most of their line is not profitable. Out of 8, they say, 1 is a bestseller, 1 loses money, and 6 break even or make a small profit (four digits). And this is Random House. Imagine how the small presses that don't have big authors and can't get their books into Barnes and Noble are doing.

3. Most books are mid-list books. Many authors decry being on the mid-list, but it's where most authors are. As you can see from above, most books barely break even. After paying the author an advance, a tremendous amount of money goes into the production of a book, and then the publicity and possibly some marketing, and then the publisher has to sit back and hope to G-d it sells. Almost every major book has returns, too, and I don't mean people returning books to the store, which rarely happens. "Returns" refers to when a big bookseller (B&N, Borders, Books-a-Million) buys 4 thousand copies, sells 3000, returns 1000 to the publisher. Those books usually go to scrap or are resold at cost (1-2 dollars) to the used market. Sometimes they're not resalable because they were damaged in transit, or have stains, or stickers on them, or something like that. Sometimes they're not resalable because hey, they didn't sell the first time. The publishing company expects this and factors it into the equation on the Profits & Losses sheet, along with all the money they have to spend paying to make the book go to print. In our class on P&Ls a guy from Hotlzbrinck came in and showed us a "normal" book for them. It had a solid advance for a first time fiction author ($15,000), sold reasonably well for the run that was done, and after costs, had a $4000 net profit. $4000. Everyone's been paid at the net stage so no one's lost money, but those are not huge profits for a major corporation. It doesn't leave them much room to acquire new material. However, this is a "normal" book. Most books aren't bestsellers - they don't have the audience, they don't get the attention, they aren't good enough to sell hundreds of thousands of copies. At least maybe they'll somehow manage to break even and not ruin the author's career.

4. Numbers 2 and 3 explain why publishing is a low-paying industry, so you have to love books to be involved. The speech we got from most people when discussing their career choices was, "I barely make enough to make ends meet, I work more than 50 hours a week, and I have to worry that every single book I do might be a colossal failure that will ruin my career as an editor, because we have no test markets or focus groups like other consumer market-based industries. That said, I wouldn't want to do anything else in my life." Granted, these were the people who hadn't burned out (the industry has a high burnout rate; it usually occurs in 1-2 years of a new full time employee entering the workforce), but these people care about books. They care about authors. They want to sell these books to as many people as they possibly can and have the books as widely-read as possible. They want to make a mark in literature. They're on your side.

5. P.O.D. is the way of the future, but not in the way that you think. There was a lot of discussion of new technologies which have not changed the industry, but have the potential to do. Audio books ecome more successful as people spend more times in transit with audio devices that can read CDs or collect CD material through a computer, so people aren't hassled by a giant collection of audio tapes. They tried eBooks, only to discover (not very much to their surprise) that people don't actually want to read books on a tiny Palm pilot screen, or an iPod screen, or an iPhone screen. What is attractive about P.O.D. and digital publishing is that it means no returns, something that makes any publisher salivate. However, the idea of waiting 2 weeks for a book (which is about how long it takes at best at the moment) is not attractive to most buyers, and the bookstore experience is still key, but they're getting better at it every day. Eventually we will reach a point where a person can walk into a bookstore, see the 1 copy on the shelf, take it to the desk, and the person behind the desk will pull up the file and print the book out for them in an hour. Does that mean the giant companies won't continue to control the industry? Probably not. The big five are giant because they do their job well and have success in finding good books, packaging them well, and getting them to the right markets. It takes hard work and some talent to do that. Oh, and luck. So, combining all those factors, the self-published author might do well, but he's probably better off if his work is good enough for a company to pay him money to buy it and then market it themselves.


Anonymous said...

Let's start by not allowing shops to return unsold books. Perhaps that'll make them stop overordering (which means it stops you overprinting in the first place)

Tom said...

At the one media conference I go to each year there always seems to be this unspoken animosity between the P.o.D. people and anyone in conventional publishing. It seems that P.o.D. folks feel that the existing industry is composed of nothing but accountants and gatekeepers who serve no purpose but to stifle creativity and connive artists out of their wage. Meanwhile, the traditional print types evidence obvious contempt for anything other than a conventional publishing house.

Twill said...

Number 2 is an interesting presentation. However, since the 6 that are break-even or small-profit include a portion of salaries and fixed expenses in their expense listing, that puts the industry at 87.5% profitable books. (When you sell something that offsets your fixed expenses and salaries, you are making a marginal profit on that thing.)

I'd love to know how many of the unprofitable 12.5% were those crazy big "Buy OJ's memoir" type transactions. It could be that a publisher could make a decent profit by publishing lots of midlist books and letting lightning strike occasionally.

Richard said...

I love Random Houses answer to Best Ways to Make Money - Underpay writers.

Over the last little while, I have been wondering why people bother trying to be writers. The stock answer is that they love writing. Yet, I am sure that buried deep inside is the desire to make it big, to generate easy income from their passion. If they only did it for the love of writing, then they would have closets full of manuscripts that never see the light of day.

I am amazed by how small most magazine circulation’s are (and paid subscriptions even lower). The average article rates aren't great. By my estimate to make a living selling magazine articles, I would have to have one article published per day (barring any major articles / research pieces). And to hit my current income, I would really need to have two articles published per day – that means I would have to be churning out over 500 articles per year (based on a five day work week) - I don't even blog that much (although, if you throw in comments, I probably exceed that - but most of my comments never even approach 500 words).

And, on top of writing those articles, there is the whole issue of researching and selling them. A lot of work. Never mind, that I also don't get insurance and health benefits that come along with a day job.

Of course, books aren't really any better. Even if I managed to secure a $15,000 advance like you mentioned from Hotlzbrinck (which, from my understanding, is really, really good – my impression is that most are in the $5K to $10K range) - I would still need to do several books per year to match my salary. Imagine getting a 5K advance per book, you would have to sell 12 titles per year to make $60K (less 10-15% for your agent).

Yeah, in the end, writing seems to be a tough business to eek a living out in. Maybe if you are single, and into living a Bohemian lifestyle, it is a good option. For most, it would seem that the best we can do is keep our day jobs and hope to sometimes see our names in print.

Of course, maybe I am just rationalizing myself out of wanting to do the hard work to be a writer.

David said...

Some small publishers have made their POD books returnable.

I have no idea if this is a trend. If big publishers could somehow end the whole returnable setup, that would make the issue moot, but they don't seem to making much headway in that.

bob said...

Hmmm, I'd be curious to know why Editors are more excited to work on a nonfiction manuscript than the genre fiction?

Is it simply because nonfiction is an easier sell?


Anonymous said...

But still, the pay for a newcomer in publishing compares rather well with the average advance for a first-time author. If it's tough living on an editorial assistant/ agent's assistant's salary, imagine what it's like for the writer with no financial security.

ORION said...

This is a wonderful post. Very informative and is basically what I am hearing from my agent and editor. I hope my book will be different but the odds in publishing are tough.
The editors have to love books to stay in this business and the authors have to love writing.

Anonymous said...

Consider this, The DaVinci Code was that one-in-eight. It was so badly written, with the same exact plot as every other Dan Brown book, and obviously edited by someone who had very little time to do it; yet it sold the pants off of everything.
Guess what, there are still thousands being returned and remaindered because stores ordered bazillions after it hit the bestseller list. If publishers weren't so afraid of the bookstore chains (who can kill them by simply shelving a book a certain way) they would limit returns to a fixed percentage of the original order to be returned at full price, and a graduated scale for additional returns. This would give the stores the freedom to order big if they need to (knowing it will sell) but to limit losses from over inventory. It would also give them some incentive to return only a oart of their overstock and keep a small inventory on hand.
Still, I like the idea that you can walk into a store some day and order a book to be printed. You could specify size, shape, cover, binding, font, paper ... the choices are endless. Beats trying to read a "book" from a scrolling, backlighted screen.

Dwight's Writing Manifesto said...

I love these inside baseball insights.

Thank you.

none said...

If bookshops can't return books, then they won't take a chance on ones that might not sell. Wall-to-wall celeb waffle and cookbooks is what you want?

I'm unconvinced of the advantages to me in waiting an hour for a book rather than grabbing it straight off the shelf. What am I supposed to do with that hour? I won't have a book!

Karen Duvall said...

Unfortunately, the (false) word has gotten out that POD is synonymous with Vanity Press, or self-publishing. Ignorant folks who can't, or won't, understand the difference between a method of book production and a type of publisher are giving legitimate publishers a black eye. Such a shame.

I had this argument with the preditor/editor blog people (I forget their names) and they claim to be vindicated for bad mouthing publishers who use this method because the assumption has already been set in stone. It's not their fault that they continue to perpetuate the myth. WTF?

Anonymous said...

Based on my experience 25+ years in the industry, all of the points made by the pros in your seminars are correct. My only quibble might be about the notion that 6 out of 8 books break even or turn a small profit -- many more lose (usually small amounts of) money.

The problem of returns confounds me, as the dilemma was mitigated by the record industry decades ago, and would be fairly easy to implement in publishing (especially for the larger publishing groups).

Record companies allow a percentage of returns at no penalty to the distributor, and then start charging for excess returns, but they do this not by title but by the entire line of the distributor. In this way, Random House/Knopf wouldn't take a big hit if they ship B&N 4,000 instead of 2,000 copies of a literary novel they are high on, as long as they don't go crazy shipping too many copies of the megasellers. This system helps both the retail stores and the publishers, although the details would have to be ironed out carefully, of course.

Thanks for your blog, Rejecter. You give as well-balanced a view of publishing as I've seen on the Web.

Dave Kuzminski said...

To clear the record, Preditors & Editors does not have a blog. Perhaps you meant another watchdog site?

Anonymous said...

I would buy and read e-books if there was a decent viewer that didn't cost $300. I want something with a paperback sized screen, lightweight, and $100 or less. I can buy a digital picture frame for less than $100 - why not an e-book reader?

Oh, and I want the industry to agree on a e-book format, so I know I can buy e-books from any publisher and they will work. And I want e-books to cost less than printed versions, too.

E-books could be very good for the industry, if they have the proper support.

Anonymous said...

Good stuff, rejecter. Thanks for all the hard work and time that went into writing this.

xo, a reader

Karen Duvall said...

Dave, Preditors and Editors does have a blog. It's

LindaBudz said...

Terrific post, thank you for sharing!

Anonymous said...

Unfortunately, the question of returns seems to be unchangeable. The record industry was mentioned as a comparison. They're in the toilet now, too, with losses rather than profits posted.
Returns as a way to do business began during the Depression, to encourage booksellers to stock books without having to lay out money for inventory. No sale, no pay. It was a good deal for both back then, and may be so again once POD in ultra short time becomes standard, and orders are more in line with sales. With technology today, reprint turnaround is about a week, so if a book is "hot" they can get them on the shelves pretty quickly. There's no need to overestimate demand, except in the hopes that a large print run will help a book chart.
Huge orders of books, especially those of the OJ ilk, are stocked as attention getters, and, believe it or not, these are the books that get people into the stores. They may not buy them, but they get attention.
The problem is the sheer number of books published each year is phenomenal, and there's no way that each of those books will have the attention it needs to sell.

Anonymous said...

In that hypothetical situation, I should be immediately sold the one shelf copy and then the hour should be taken to print a new one for the shelf, after I leave. No point making me wait (I'll just order it online instead; I'm certainly not going to twiddle my thumbs for an hour)...just use POD as a near-instant reorder process, instead of using it to make the customer experience crappy. ;-)

Sandra Cormier said...

E-book readers, like any new technology, will come down in price and go up in quality. Stuff like that develops at mega-speed.

In my experience, e-books are already less expensive than print books.

Great post, Rejecter.

Nee S. said...

Karen Duvall,

If you look at the Preditors and Editors web site, it says at the bottom of the page:
"Preditors & Editors is a trademark of David L. Kuzminski."

The link you gave is to a blog by Crispin and Strauss, who are not part of Preditors and Editors.

Just so everyone is clear.

Anonymous said...

I'm sick & tired of the pubs whining about how little they make. Instead of looking at their average profit percentage per book, or their percentage of books that break even, how about we look at what percentage of the whole pie goes to the author? Midlist or frontlist, doesn't matter. I'd wager except for the blockbusters, it's 5% or less.

I will not tolerate this any more--I'm mad as hell about the paltry amount most authors get, when after all they do the lion's share of the work.

Anonymous said...

I love that the guy who runs P&E being told, yes, you really do have a blog.


This was a great post/article. Very insightful. Thanks Rejecter.

Unknown said...

Major pubs are not non-profit orgs. They do make money.
Selling a fiction book on POD is tuff, tough, anyway you spell it. Ask the man who knows.
A Fiction author who has never been published has a slim, slim chance of being published.
This site has some good info.