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

That would be true for a company -wide P&L, but not as useful in the single title tool. This kind of management report is designed to help non-accountants sort through the choices available and pick the ones most likely to help the company. Interest costs should be pretty much constant across the company, as will the projected life of an unknown book within a single market segment.

Or, in short, not so much for this type.

Of course, this is just an opinion.

This is a fantastic post Anna, and one I think every author (aspiring and published) should read. I'm very interested in reading part two. Thanks.
Tara Gelsomino

I wouldn't want to seem ungrateful, but some of us are worse than hobbits, you tell us something and we have a thousand questions. Well, maybe not a thousand. But a couple, at least?

You made it clear that there's a definite difference between trade and mass-market, and phn made it clearer and maybe even fascinating. But, y'know, this sorta begs the obvious question:

Here's a new novel from author X. Is it to be trade, or mass market; and why; and who particularly makes that decision? Is it contractually negotiable? Should it matter to an author?

Then you have your grid of production costs, and I realize you didn't want to do an exhaustive breakdown but I am just assuming that it is a workable breakdown in context of this question: which of those items does Tor do in-house, which are contracted out, and which might go either way? And why?

For example, I know some printing is done in the US, while some is done overseas and shipped by slow boat, particularly if there's an important delivery deadline that can be missed. Is it a lot cheaper to have it printed overseas? Is the quality comparable? And are there other factors to the decision?

This next question arises because I bought what I thought was a new novel by a favorite author, from a major trade outlet while on vacation in Santa Fe. I was really thrilled to find their sole remaining(? It was the only one.) copy, in the course of looking for a geology text, so I scarfed it up (but didn't say, "OMG! SQUEE!") without looking too closely and went back to my hotel. I was all set to enjoy it when I realized that I'd already READ it, fairly recently, bought under a completely different title. A note printed inside the cover advised me that this particular book was for release to the Canadian market. (Insert extreme annoyance here.)

But how might that solitary volume have found its way from Canada all the way to Santa Fe to be sold as a new book? Is there a grey market in SF novels? This wasn't remaindered or used, and it was from a major chain, so I've been trying to figure out exactly what might have happened?

I believe R.A. Salvatore (Fantasy writer of some fame) works with a publisher that does much as you say. I seem to remember something akin to this in an interview. I believe his book, THE HIGHWAYMAN, was the first offering from that publisher.

wf

These are really good questions, but I am not going to answer them. Why? Because the answers are long and complicated and will take a long time, and I just don't have that kind of time. If you are serious about wanting answers to your questions, I suggest you hit my post where people ask their questions in the comments (http://alg.livejournal.com/74060.html?mode=reply"), and I will get to it and make a post about it. OK?

Thanks, Tara!

Thanks for the inside peek...now...just shoot me.

Note: This example was specifically about a PAPERBACK EDITION. Hardcovers are handled differently, and the publishers DO keep a portion of the royalties back to cover returns. And that include four years down the line when a bookstore finds a copy in the back corner and returns it, not realizing that the hardcover copies are in high demand and they could almost certainly make double cover price putting the book on eBay (one of John Ringo's more recent royalty statements had a line-item for one copy of _A Hymn Before Battle_ being returned, a copy in good condition goes for $50-100 from a dealer).

That isn't what's being claimed. But everytime a publisher offers a contract to a new, aspiring writer, they're taking a gamble. Most first books don't earn out, or barely do so. The publisher is hoping they don't take too much of a loss, and that the new author's book generates enough interest that their next title will do better. If the book tanks, the publisher absorbs the loss, and just figures there's no point pouring more money into that author, and the publisher's losses are offset by the revenues from better-selling authors. Of course, if an editor consistently chooses authors and titles that tank, they'll probably find themselves in another line of work... But it is NOT uncommon for authors to use pseudonyms for a while after an initial offering under their own name tanked, or to use pseudonyms for work done in other genres.

I don't know if the same definition of "paperback" applies for my books. They have paper covers, but are priced more like a hardback would be. So far as I'm aware, they never get end up in a significantly cheaper edition, not in the US anyway. I'm told that a couple of my book have been printed in pulp editions in countries where that's the norm.

Whoops, that was me. Forgot to log in.

Thanks for leaving the math in! And for using real-world type figures, not completely made-up far-too-large bogus numbers. Because it was clarifying the details where I really learned stuff from this (having hung around with real live authors and some editors and agents for a few decades, the basic outline was already fairly clear to *me*, though I know how rare that is in the world at large).

De-mystifying publishing is a worthy goal all around. Publishers can get more sympathy (and be beat up more for any actual bad things they may do, and less for how things work), new authors are less subject to exploitation by scammers, and book buyers can understand just how lucky they are that *anything* they like *ever* reaches the shelves :-).

Strange as it may seem, actually there are a few people, probably *at least* a dozen in the world at large, who really *don't* aspire to be writers. Given that all the aspiring writers I know also read, I can't even claim that our justification for existence is to be the market. But still, here we are.

Good luck with your aspirations, in any case.

I was first introduced to the internals of publishing through science fiction fandom -- sitting around the bar / consuite at a convention or even sometimes at panels hearing authors and editors talk about the business side some. That still goes on some -- but since I'm married to an author and have known numerous authors and editors for decades now, I don't go to the intro panels so often, so I may have a mistaken impression of how often they occur these days.

Great! I loved your breakdown. I haven't seen Part Two yet, but I'd like to know if you might consider doing a Part Three assuming similar (except for physical ppb costs) breakdown for a $6.99 ebook version? And could you come up with scenarios for the difference between letting someone like Fictionwise handle the sales versus TOR handling them itself?

Derek Benner

Unfortunately, I don't know much about e-books. Tor doesn't generally sell e-books ourselves -- we sell the rights to a company for a set amount (usually).

Sorry!

I too thought the covers looked expensive - why not just run-on - but you're saying you printed 70,000!? shurely i misundertand. We get run-on covers free in modest amounts.

So, an academic publisher speaks:

1. your cover design/art costs 10x what ours do. But you did say your covers were a major factor in your sales, I know.

2. you pay published price royalties, not on % of money received by the publisher?

3. co-op - we don't have that in the UK, that I know of.

4. print 35,000 and sell 8,400 you're going to lose money - the sums above all become irrelevant!

Thank you for writing such an interesting article. I've added it to my memories. ^_^

Thank you.

No!

I earnestly beg you not to do business with any publisher that offers you such a deal. While in theory they might be honest, in practice I've never seen nor heard of one that was. Proposals to share the risks are reliably a sign that you're dealing with a scammer.

Think of the worst books you've seen commercially published. Their publishers paid all costs. If a book were worse than that, do you imagine anyone would read it?

You can't share the risk. Your advance is only a fraction of the total cost. If the publisher has a real marketing, promotion, distribution, and publicity operation going, a genuine share of the risk would cost more than most people can imagine paying.

That was rather very informative, thank you.

$4500 for art, actually not shocked at all. Tor covers are original paintings not stock art or designed covers. Talking as an ex-Art Director, I know finding a competent painter or illustrator willing to work with defined concept in mind is not easy to do, and it usually only gets produced once.

It is not like getting an image from a stock catalogue (or istockphoto.com for cheap) and then having a designer do their magic. Has anyone seen many dragons in the stock photo catalogue recently? As an aside:I really think deviantart.com is missing a real opportunity by not offering a stock agency relationship out of the images on their site.

Designers don't deal well with artists, they deal well with art. Tor covers are exceptionally well tuned for the market they are selling for (it may not be your "adult" cup of tea). When I was fifteen and buying as many Tor books as I could get my hands on, it was because the "hero" was buff and the woman was barely dressed.

Ask any designer to produce that and they will fail, or know enough to say you are looking for a "real" artist, not a designer. A painting for $4500 would be cheap at a decent art gallery but somehow if it helps sell 20000 more books it is expensive.

My firm motto as an Art Director is a good cover will not sell a crappy book, a great book will sell itself despite what is on the cover, but if you put a great cover on a great book, it will get the sales representatives behind the book (they may even read a chapter or two) and your initial orders will sky rocket.

In the Tor market, teenage fantasies are driven by the cover, and thus sales are increased. In the Adult Trade Paperback the cover gets the book picked up, the quotes get it opened, but if the random page of writing that customer reads sucks that book is going nowhere.

Leslie Smith

Oh My... but hey, don't quit my day job right. Thanks! This was useful.

Freelance Cover Design... I'm so new at it that I don't even know the name of what I'm doing. :P

Just that I've totally enjoyed it so far and thought maybe I'd be good at it... Being a creative oddity. LOL!

Anyhooo - do you know, offhand any links or things I should be looking up regarding doing such?

I know that this is completely NOT your department... so if you don't have any places to point your finger to, that's cool. However, if you happen to have any info on it - I'll greedily suck it up!

Lady M

Have you posted a Part II yet? If so, can you tell me where to click? (Keep in mind that Live Journal has made an idiot out of me so I'll need simple instructions.)

Thanks!

I especially agree with #4. It's astonishing that publishers do so little to maximize sell-through. In fact, most incentives offered to booksellers -- including co-op -- are designed to get us to over-order. Sometimes, there's a good reason for that and sometimes you do get good results from this. But more often than not, the result is more waste.

More books would be profitable if each copy sold didn't have to bear the costs of two unsold.

-- Jim

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

Re: p and l spreadsheet paperbacks

Great post!

What, more questions?

Re: Share the risk?

Re: What, more questions?

Re: Great post!

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Re: Strange

Re: Propaganda

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P n L. Can you do a version for ebook sales

Re: P n L. Can you do a version for ebook sales

Re: breaking down some line items

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Re: Share the risk?

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Re: breaking down some line items

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Yep that would be the thing...

Part II?

Re: breaking down some line items