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

Propaganda

[(Anonymous)]

Book publishers, like the music and movie publishers have always tried to convince everyone they lose money on every product and only run their business as a charity. It's simply not true. They would not keep doing it book after book, year after year if they did not make money.

The publishing houses have made their top people very rich off the work of others.

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: 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.

Re: Propaganda

[lonewolf545.livejournal.com]

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.