Interesting to read in the press today an extract from Kurdo Baksi's forthcoming book on his friend, Stieg Larsson.
It seems that the manuscripts were originally rejected by one major publisher when sent in unsolicited, and only accepted by the second on the recommendation of a mutual friend. Shades of Harry Potter.
It seems that the manuscripts were originally rejected by one major publisher when sent in unsolicited, and only accepted by the second on the recommendation of a mutual friend. Shades of Harry Potter.
It really is high time that authors started putting a page right at the front of their books saying "This book was rejected by the following publishers ..."
I think this highlights everything that is wrong with the state of publishing. It is no longer run by people who really care about books, and finding and introducing new authors, but by people who think they understand about business. Sadly, they do not. The sort of books which they want to publish are "celebrity" books, either ghosted auto-biography of a particularly nauseating kind, or diet or recipe books (what one publisher disarmingly described to me as "crap books"), or books by established authors. However, they can source these books only the cost of large up-front advances, and the heavy discounting practised by on-line booksellers means that only occasionally will any large profit on the book result. Perhaps more publishers should go to business school ...
There is actually a direct parallel here with the world of venture capital, about which I happen to know rather a lot. In VC, it is accepted that many ventures will fail to produce any return at all (about half of all companies started, in fact), but that a very small number of so-called "home runs" will more than make up for this and will actually contribute about 80% of total gains across the whole portfolio. One thing which dramatically raises the likelihood of a home run occurring is a low entry cost. Publishers please note.
If you follow this logic, then publishers should only publish books which they can source without the payment of an advance, perhaps offering a better royalty deal instead. This argues for going back to the old days of trying to find quality books by little known authors. Every so often one of them will turn out to be Stieg Larsson or J.K.Rowling, but even the others will have a chance of breaking even in these days of print on demand production and distribution.
You see, what the publishers have failed to realise is that they are selling low margin items. There are two different margins here. The first might be called the gross margin, and represents simply the difference between what an item costs you to produce and what you can sell it for. This an be improved in one of two ways: raising prices or cutting production costs.
The former has probably gone as far as it might, since cover prices are now so high as to act as a deterrent for all but the most dedicated book buyers. Is it a coincidence that so many establihsed book-bloggers are now running exercises to see how few boks they can buy this year? In any event, in many cases publishers have no control over what price the book is actually sold at - Amazon routinely discount even best-sellers by 40% or so, and the publisher usually gets only half of that - 30% of the cover price!
As regards the second, if you have committed to payiong a big advance then you have boxed yourself into a corner before you start. Assume that you pay a £100,000 advance on a book priced at £30, each of which costs £5 to produce. Assuming all were sold on Amazon at a 40% discount, then you would need to sell 25,000 copies just to break even on your production costs.
However, even this is only part of the story, since it ignores the business's operating costs such as salaries, rent and taxes, which are used in calculating the net margin. In these days of the internet, a publishing business could of course be operated (like many VC companies) from somebody's garage or spare bedroom. Instead, they feel the need of plush offices in the West End, and salaries to match. It is entirely possible that these could be two or three times the company's book production costs. Which means that, on the above figures, you are now struggling even to break even.
Speaking as one who teaches post-graduate students at business school, it does seem to me that this model is unsustainable. I know of various publishers (including the two who were at different times offering to publish my history books!) who have effectively stopped accepting new proposals and, if I am right in my analysis, the next year or two could see various publishing firms going out of business altogether. It also seems to me that there are some fairly obvious things which could be done about altering the model, but I would be happy to hear feedback on what others may think, particularly some of the publishers who I know read this blog.
I think this highlights everything that is wrong with the state of publishing. It is no longer run by people who really care about books, and finding and introducing new authors, but by people who think they understand about business. Sadly, they do not. The sort of books which they want to publish are "celebrity" books, either ghosted auto-biography of a particularly nauseating kind, or diet or recipe books (what one publisher disarmingly described to me as "crap books"), or books by established authors. However, they can source these books only the cost of large up-front advances, and the heavy discounting practised by on-line booksellers means that only occasionally will any large profit on the book result. Perhaps more publishers should go to business school ...
There is actually a direct parallel here with the world of venture capital, about which I happen to know rather a lot. In VC, it is accepted that many ventures will fail to produce any return at all (about half of all companies started, in fact), but that a very small number of so-called "home runs" will more than make up for this and will actually contribute about 80% of total gains across the whole portfolio. One thing which dramatically raises the likelihood of a home run occurring is a low entry cost. Publishers please note.
If you follow this logic, then publishers should only publish books which they can source without the payment of an advance, perhaps offering a better royalty deal instead. This argues for going back to the old days of trying to find quality books by little known authors. Every so often one of them will turn out to be Stieg Larsson or J.K.Rowling, but even the others will have a chance of breaking even in these days of print on demand production and distribution.
You see, what the publishers have failed to realise is that they are selling low margin items. There are two different margins here. The first might be called the gross margin, and represents simply the difference between what an item costs you to produce and what you can sell it for. This an be improved in one of two ways: raising prices or cutting production costs.
The former has probably gone as far as it might, since cover prices are now so high as to act as a deterrent for all but the most dedicated book buyers. Is it a coincidence that so many establihsed book-bloggers are now running exercises to see how few boks they can buy this year? In any event, in many cases publishers have no control over what price the book is actually sold at - Amazon routinely discount even best-sellers by 40% or so, and the publisher usually gets only half of that - 30% of the cover price!
As regards the second, if you have committed to payiong a big advance then you have boxed yourself into a corner before you start. Assume that you pay a £100,000 advance on a book priced at £30, each of which costs £5 to produce. Assuming all were sold on Amazon at a 40% discount, then you would need to sell 25,000 copies just to break even on your production costs.
However, even this is only part of the story, since it ignores the business's operating costs such as salaries, rent and taxes, which are used in calculating the net margin. In these days of the internet, a publishing business could of course be operated (like many VC companies) from somebody's garage or spare bedroom. Instead, they feel the need of plush offices in the West End, and salaries to match. It is entirely possible that these could be two or three times the company's book production costs. Which means that, on the above figures, you are now struggling even to break even.
Speaking as one who teaches post-graduate students at business school, it does seem to me that this model is unsustainable. I know of various publishers (including the two who were at different times offering to publish my history books!) who have effectively stopped accepting new proposals and, if I am right in my analysis, the next year or two could see various publishing firms going out of business altogether. It also seems to me that there are some fairly obvious things which could be done about altering the model, but I would be happy to hear feedback on what others may think, particularly some of the publishers who I know read this blog.
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