P&Ls and how books make (or don't) money

[alg]

Profit & Loss/Profitability & Liability: How Books Make (or Don't Make!) Money

A basic outline of what happens when an editor buys a book and wants to publish it. This is very much a basic look at publishing and publishing finance, with some explanation of terms commonly used by the marketing and sales departments.

Comments

[jonquil.livejournal.com]

Let us not speak of how much I paid for The Admiral's Bride.

Re: breaking down some line items

[(Anonymous)]

I may have misread this line: "And this is totally normal. This is an average book."

When you say that this P&L represents the "average" book, what exactly do you mean, then? Do these numbers (or something close to these numbers) apply to 10% of what Tor/Forge publishes in this format? 30%? 60%?

[imaginarycircus.livejournal.com]

Did you see the article in the most recent poets & writers about this same subject? I also spent the weekend meeting with Literary Agents who summed up what you said without all the detail. The publishing industry overwhelms me. I'll just sit over here and work on my second novel.

[defrog.livejournal.com]

Just wanted to say thanks for posting this, and that yr timing couldn't be better. I've just completed my first novel and and already working on the second, and while I always figured the book publishing game was harder and more complicated than it looked, well ... there's knowing, and there's KNOWING.

Reading this almost makes me want to quit while I'm ahead. Almost. But I'm one of those people who will write stories even if only my small circle of friends ever reads them. So I might as well submit them. Looking forward to future tips and advice.

Cheers,

This is dEFROG

Re: Propaganda

[mariongropen.livejournal.com]

As someone who used to cut the paychecks and the royalty checks in a modestly sized publisher, I can only say:

Are you ***kidding?!!?***

Even the execs are severely underpaid for their level of talent, education, experience and effort. And let us have a moment of silence while we contemplate the sad and sorry state of compensation for the entry-level folks.

Re: Movie Biz and Why this isn't totally honest...

[mariongropen.livejournal.com]

I have a favorite saying about publishing finance: "It depends." That applies to your comment.

I have never worked in mass market, so I can't comment very specifically on the numbers in the P&L above, but I certainly saw nothing to which I took exception. On the other hand, you are right that subsidiary rights can be a huge part of the profit picture.

It is also true that publishers often find ways to fine-tune their estimations so that books more or less breakeven, and the break-out books can do some heavy lifting (of the bottom line).

A last point, break out books can be a mixed blessing. One of the most popular courses I give at PMA-U is "Surviving Success." There's a reason for that: small publishers with stunningly big books often tool up to deal with the demands they generate, and then have trouble cleaning up after the party's over.

This business is no end of fun, but it is also pretty hard to make simple, general and accurate statements about it. Or so I find, your experience may be different.

Re: Propaganda

[alg.livejournal.com]

WORD.

Everyone always thinks they don't make enough money for what they do, but in publishing that is actually often true.

Brava!

[mariongropen.livejournal.com]

I very much liked this entry. You did an excellent job of presenting something that's inherently complex in a simple way, and of translating accounting and math back into English. I have reason to know that it's hard -- I did an article on Single Title P&Ls for an industry newsletter a little while ago, myself. I don't think mine was nearly as accessible.

So, once again, kudos on a grand job.

[(Anonymous)]

Awesome redux of the lecture I got as an intern! Thanks, Anna!

Now, with identity!

[danielatlarge.livejournal.com]

Awesome redux of the lecture I got as an intern! Thanks, Anna!

[luna-the-cat.livejournal.com]

Dear god in heaven...I've done calculus, and this still made my head hurt.

I'm going to have to friend you just so I can have these essays in my memories list.

[jon-a-ross.livejournal.com]

Hope you don't mind, but I added you to my friends list so I don't miss the next part of the series. I found this essay thanks to a link from baralier

Re: On Editor Compensation

[(Anonymous)]

Thanks so much. I appreciate the information. :)

Re: Movie Biz and Why this isn't totally honest...

[(Anonymous)]

You've touched on something that I've tried to determine for the music industry -- namely, what is the range of profitability for a project? As you said, blockbusters tend to compensate for busts, but how often do each occur, and what about the 'tweens? Show me an historical frequency chart and I'll show you the underpinnings of corporate financial strategy.

[jcfiala.livejournal.com]

Hi. Aspiring writer (aren't we all?) who found you through BoingBoing - I'm hanging around to learn more and see part 2.

p and l spreadsheet paperbacks

[(Anonymous)]

You need to factor in cost of money, ie interest. While not as big a factor in prior low interest era, it is about to be much more important. It can greatly reduce profitability.

not always

[(Anonymous)]

All the author has to do is change her/his name. Clean slate.

[terebi-me.livejournal.com]

Damn, I wish I made 18%...

[(Anonymous)]

As alg pointed out, there are more booksellers than just Wal-Mart. There are also other publishing houses.

Absolutely, a writer should write what he or she wants to write. If not, the story won't be much good anyway. There will always be readers for good stories, no matter the genre. That's why we read. That's why there are authors, editors, publishers, bookstores, libraries.... Oh, sorry, I'll put down the pom-poms and the banner. ;D

Yes, there are readers who appreciate stories involving gay characters. Let me see stories where GLBT characters are remarkably heroic...or remarkably ordinary. Either is fine.

My point is this: There's a market for gay characters and gay authors. Don't defeat yourself by telling yourself that your plan is lost before it gets started. If Plan A doesn't work, there're still at least 25 more letters. Maybe more, in Sebacean. -- Now go write!

[(Anonymous)]

Option 1: Only if the main char. has a thing for Scarrans. It's the hat, isn't it?

Option 2: Not the Mama! Gotta love me! ;)

I'm not sure if my reply's on topic or off topic. It's definitely on at least two topics, though.

[(Anonymous)]

Lesson 1: If you make it big, you can make it bigger, because your fans will want to collect all your work.

Lesson 2: Author, be not ashamed of thy published works, for verily, thou didst receive a paycheck for something thou wrotest from out of thine pointed head.

Lesson 3: The publishers didn't fall off the turnip truck, they'll jump on the bandwagon (more fun than the turnip truck) and make money to recoup their other losses. If they can say they have a "long-forgotten tome of some mysterious lore" by fabulously famous Granny Noranti, formerly Hot Mama Noranti, so much the better. (Hot Mama Noranti? Blame the Evil Plot Bunnies....)

[(Anonymous)]

Beware the rattlers in the stomach, for they are notions of motion, sound and furies, signifying nothing.

^ The above mangled, mixed metaphor combines Farscape, Ecclesiastes, and the Bard in ways heretofore I did not even contemplate.

The rattlers in your stomach don't mean a thing. -- Reach for the stars and grab 'em. This is your playground. Remember that, son (or jirl).

[tharain.livejournal.com]

And, of coruse....the pellet with the poison's in the flagon with the dragon! The vessel with the pestle has the brew that is true...

[(Anonymous)]

There is a distinct, undefinable difference between muddy slush and crystal-clear writing, even when a writer is a complete beginner, in my experience.

I would far rather read the mostly-good stuff from a nervous newbie than the slush from someone who doesn't have an original idea or the flair for language to bring that idea to life in the audience's minds.

Please note, that does not mean that beginner's piece will be appreciated for the diamond in the rough that it is. It's just as likely that the editor doesn't have the time or money or oomph needed to polish the charcoal off the diamond. -- The editor in me notes that I mixed the jewelry and the watery metaphors. I'll blame the transition at "crystal," and hope it doesn't get a rejection slip.

Also note, if an editor bothers to write something other than a standard rejection, or remarks that he or she liked something in it, or that he or she wouldn't mind seeing further work from you in the future -- that is a good sign. Don't give up writing just yet. And if someone buys your work, sing praises to all the muses that have bemused you! -- And then write some more!

[dr-pretentious.livejournal.com]

I caught the NYTime article about that. It's a pity and a shame she didn't find an original way to tell the story. There's a huge audience of people who are hungry to see a twist on their own experience represented. I hope the right book comes down the pike for them soon.