Monday, June 1, 2009

A Cool, Rational Look At The Book Publishing Industry

Some businesses are not dumb at all. Google, for example, is an example of an innovative technology company making oodles of lovely money. You have to dig to find anything dumb in the Googleverse, although Google Sites may be close.

Some businesses seem smart, but when you look into them a little, you find seething pools of dumbness. Selling cars to Americans is a pretty way to get rich, but if you start rooting around, you find the Pontiac Aztek and the GM Job Bank.

Finally, some businesses are dumb right from the first look. Today I'm picking on book publishing.

First of all, book publishers don't test their products on anyone. Ever. In other words, the opinion of the editor and associate editors and the head of the publishing house determines what manuscripts make it into print.

Hollwood does it much the same way, and bungles it most of the time -- Universal passed on Star Wars, essentially turning down a license to print money, and every studio in town except Paramount turned down Raiders of the Lost Ark.

The literary geniuses at Knopf and Little Brown and others compound this error by paying advances to almost all their authors. An author delivers a couple chapters -- or most of a book if they are a first-timer -- and they get paid before the publishing house makes any money, or even knows if they will.

Then the publishing house spends money on editing, typesetting, designing covers, printing, publicity (if there is any) and distribution.This is all very expensive, and explains why fancy cookbooks with full color illustrations cost $9 million each.

The more books you print, the cheaper it gets per copy, but you can run into problems fast by overprinting. Read on.

Book stores must have won a bet or some kind of underground shadow-war against the publishers years ago, because they are allowed to take all the books on consignment. If they don't sell, the publisher has to take them back and refund the money.

If the book does sell and stores need more copies, the publisher has more problems. The second print run is a rush job and therefore costs more per copy. Its also probably smaller the your initial print run, and therefore costs more per copy.

If it doesn't get to the bookstores in time, the fickle reading public forgets all about you, and your chance for a bestseller evaporates. Just like the first print run, unsold books go back and the money is refunded.

Essentially, publishing houses take a royal asspounding from every single entity they do business with from the author to the bookstores to the printer. No wonder they depend on the big stars like James Patterson, Tom Clancy and Stephen King to subsidize all the other books and authors.

I suppose there are some reasons for optimism. The Amazon Kindle and Sony ebook reader with digital distribution, print on demand and market testing using a multivariant fractional factorial approach have the potential to change the industry, if applied right.

Its significant that the companies developing and distributing these tools and technologies are not book publishers, who could probably teach Luddites a thing or two about hating technology.

Which leaves me predicting that the publishers who got themselves into this mess will not have have the vision to get themselves out.


the pig boy said...

in addition,there's a rise in digital self publishing. granted there hasn't been a best seller discovered from this vehicle, at least not in the states, in japan there have been some wildly best selling self-published digital books, some of them even written via text message if you can believe that...

self publishing has become pretty easy with sites like and the kindle has the option too. its like any musician with a mac, protools and the ability to upload playlists to imeem and has cut out a record company.

i echo your last statement-publishing houses are old-guard and will dance while their version of rome burns. just like the record companies and newspapers did and are doing.

Atom Smasher said...

S0 that's why paperbacks I paid $1.25 for 30 years ago are $7.50 now.

Anonymous said...

Okay, a little late, (I found your 'site by way of survivalblog.)
Okay, a lot late.
Please look at before painting all of book publishing with that same tarry brush. They've been offering e-books of their new titles, at generally low prices, (e-galleys are an exception, but you're paying for the chance to read the book early.)

As I understand it, that consignment thing is a holdover from the depression. It does benefit the consumer, however, in that it allows the book store to afford to stock selection. So the book doesn't sell. Send it back. (That markup is about 40% -50%, on top of that option to send it back, is a little much.)

Finally, as to price. Atom Smasher. When you paid 1.25 for a paperback 30 years ago, how much did a ticket to the movies cost? How much was a hamburger? That price is not the result of books costing more to print, but rather the result of money being worth less, (I am torn. Does that space belong there between worth and less?)

Granted, most of the publishing houses are dancing while rome burns. A few are working on briton.

Anonymous said...

Correction. The markup is about 40-50% of the total price. That's about 66-100% of cost.

MeatAxe said...

Hi Anonymous!

(You don't mind if I call you Anonymous, do you?) Let me first say, thanks for reading. I don't usually expect an audience for this stuff.

Mostly I'm just writing to work through things Ive been thinking about.

But in any case, let me answer some of your points. First of all, what's the fun of having your own blog if you can't paint with too broad a brush? I mean, why even have a blog if you can't rant and rave and throw the occasional tantrum? :)

You are right, of course. Not every publishing house is staffed by idiots, and Baen is a great example of one that is assuredly not. They have done some very clever stuff, starting YEARS ago with the free library and continuing to this day with WebScription (or whatever they call it).

No flies on them. If anyone besides you read this post and thinks I meant anything mean about Baen, let me clear the air. I didn't. They are smart and cool. And they published Monster Hunter International, which is an awesome book by Larry Correia, who self published it first. Himeself. And then got picked up.

BUT. (You knew there was a but, right?) The fact that standouts like Baen can look out at the expanding universe of iphones and free downloads etc etc and make sense of it makes me double right about the rest of them.

Think about it that way -- if nobody in publishing had a single original thought, well, you could just write off the entire industry. But the fact that some smart guys are showing them the way, and the rest of them still can't figure out which end of the website to put the HTML in... thats just sad. And kinda proves my point.

Thanks again for reading.

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