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

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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

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.