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

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demystifying publishing

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

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.

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see here:
http://alg.livejournal.com/84032.html?thread=1602880#t1602880

You're welcome!

I think you should be all three. There's nothing wrong with being conflicted. :)

Writers should never quit their day jobs. Hello, HEALTH INSURANCE!!!!!!

My thought is that everyone should have an advocate who is either an agent or an entertainment lawyer. My next thought is that you should make sure your agent *is* a good agent by doing your research. And to remember that finding a good agent is like finding your spouse or therapist or GP -- it will take some time and some "dating". You probably won't get it right on the first try.

HAHAHA. YES. I had a similar reaction. And then I pictured him saying it out loud, and was helplessly in thrall to giggling.

I am not sure, but it sounds like you're asking me about freelance cover design work -- which is the purview of the art department and has nothing to do with me. However, from what I know about freelance cover design, it generally costs about the same as doing it in house, and has far more variables.

Okay, these are really good questions that, unfortunately, do not have static answers.

I'm looking for a formula, I guess, to assign importance to different factors, as opposed to other factors, with an eye toward plugging all of the useful information you provided into a workable "plan".

That sentence worries me. You cannot create a workable plan -- not really. The human factor is far too large and important a part. You need good luck, good timing, and a good book -- two out of three ain't bad, but all three make a book a success.

(And for "good book" read: commercial. No matter how beautiful your prose is, you can't be a bestseller if people don't want to read about your chosen subject(s).)

You're welcome!

Publishing tends to... well, be publishing. No matter where you are or what it is that you're publishing.

Sorry, I've never heard of Lulu. Is it an imprint of a larger house?

Hahahah. Thanks. :)

But wait! You forgot the Marshall Plan and Ian Ballantine!

Wherein Ian Ballantine had the really good idea of printing books in 25-cent paperback editions and selling them on US military bases all over the world after WWII. GIs came home, turned around, and asked where they could find those cheap books over here. And thus was born Penguin paperbacks, Pocket Books, and Ballantine Books. Not to mention Ace.

I didn't forget. I was asked to explain how mass-market paperbacks came to be sold like magazines instead of like conventional books.

Also, Penguin got started just before the war, and isn't (until many decades later) really part of the story of the American mass-market paperback. Although Penguin is definitely an important modern story all by itself.

I've gotten similar a warning from Holly Black, of all people. And while I'm fairly confident in the fact that I will have more than one career in my life, editing is certainly one of the ones I intend on. You're not rid of me that easily.

Besides, I make great coffee.

S&S had a couple of Dan Browns on their backlist, that sold nada on release, but is now generating significant revenue. The central point is that most books are crapshoots.

And this reminds me of the spread of manga books through bookstore channels instead of the comicbook direct market system.

Good to know. Thanks again!

It's Print On Demand service and can be found at Lulu (http://www.lulu.com).

Ah. Self-publishing is not what I am talking about -- that's why it works differently.

I believe SQUEE is another industry term :)

Okay....but what about the blurb question? In your scenario about the author of Crichton is an Idiot, you continually mention that said book has no blurbs as if this is meaningful...but how meaningful is it in the process? We are in a theoretical deal in your post where the book has already been bought by your theoretical editor, so in figuring the P&L what kind of weight to the blurbs carry?

D

It's very different from what I'm used to, as well. Even the distribution system is different as all companies use one sole distributor for North American distribution (Diamond Distribution (diamondcomics.com)). Diamond gets the big discount (that 60%-65%) and then sells non-returnably to comic book stores (this system is known as the Direct Market - as opposed to the ID or newstand distribution system).

The retailers can get upwards of 57% off cover price (though this varies widely depending on the publisher) but own the stock forever. The advantage for the publisher is all sales are final - no returns save damages. The disadvantage is the whopping discount to Diamond. And a whole bunch of other sundry details I won't get into here.

The Direct Market is changing rapidly. The discount and non-returnability structure was initially set-up in the 1970s to deal with periodicals only. It wasn't created to deal with trade paperbacks and their perennial nature. So there's a disconnect right now between what's called, in the Direct Market, the "bookstore model" and how comic shops have historically operated. How this plays out will be quite interesting to see. And just a tad scary!

Von

Which, apparently, is remarkably similar to Sloppy Firsts, by Megan McCafferty:
http://www.boston.com/news/local/massachusetts/articles/2006/04/23/similar_passages_in_two_books_published_5_years_apart

Oops!

I think I'd actually prefer to get a rejection letter like that.

But then, I'm also a masochist. ;)

Excellent post, Anna. It just warmed my accountant heart to no end. And the numbers tell an intimidating story. There is a great deal riding on the sale of a book. The upfront capital alone just to get it to market is amazing.

Almost every paragraph in your fascinating post could spark another comment, but I'll keep this down to a couple of specific points based on the P&L, rather than on the more general publishing/sales & marketing/returns issues.

I'm a bookseller who also does some publishing -- see www.crumcreekpress.com for more about my publishing work and www.statelyhuangmanor.com for more about me. One of the authors in my publishing program was originally published by Tor/Forge; another one of my authors is currently with Tor/Forge (I have one of her deep backlist titles).

I'm puzzled by the inclusion of "fixed cost to keep the lights on in the factory..." in "typesetting and design." Does Tor/Forge own its own presses? If not, why aren't these costs covered under PP&B? My publishing firm contracts with a printing company (several different ones, actually) to manufacture books. Their fixed costs are theirs, presumably built into the PP&B price that I pay. I can't figure out why your situation would be different.

This question isn't necessarily worth asking just for itself, but it is part of my overall reaction, which is that you're spending way too much here. The PP&B cost isn't outrageous, but $2,700 for typesetting & design? What part is type and what part is design? If there's any cost here at all for type, why is there a cost? The author should have turned in an electronic file that could easily be adapted for design purposes. The last book I published -- my first fiction original -- came in on disk from the author. Even when we have paid -- to re-key a book that we were restoring to print -- the cost is generally $350 or less, start to finish. (Yes, I'm outsourcing to India.)

$4500 for printing covers? We run covers for marketing purposes along with the covers for production, which means we spend $100 to keep the presses rolling just a little longer to produce the extras, instead of the thousands it would cost to run covers twice, once for promotion, once for finished books.

I realize that everything in New York is more expensive, but these numbers sound really high.

Jim Huang
Crum Creek Press / The Mystery Company
www.crumcreekpress.com
www.themysterycompany.com

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

Re: trade paperbacks

Re: P & L

Re: Wow, this is amazing.

Re: experienced agent??

Re: How paperbacks came to be sold like magazines

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Re: How paperbacks came to be sold like magazines

Re: How paperbacks came to be sold like magazines

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There's always the Davinci Code

Re: How paperbacks came to be sold like magazines

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Re: How paperbacks came to be sold like magazines

Re: Something that would be helpful

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Especially under the circumstances...

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breaking down some line items