Monday, June 30, 2008

An insider's take on publishing and an important announcement

Patty here…

I was shuffling through some papers on Friday when I came across a speech titled “The Economics of Publishing,” which was delivered by Otto Penzler at a Mystery Writers of America/New England Chapter meeting in April of 1999. Penzler is a well-known editor, publisher, and bookstore owner. Here is some of what he had to say:

“Why are you trying to write? It makes sense only for people with a creative urge not satisfied in other ways and who have other means of support. If you need to earn a living from this, I’m suggesting that you reconsider. Many of you—no mater how talented you are—are not going to get published. If you do, you are not going to become a success. Even if you are published and have success, you won’t make it multi-million big. Very few people do.”

He goes on to talk about what happens when and if your agent is able to get your manuscript into the hands of a publisher.

“When the manuscript gets in-house, unless the agent or writer has a track record as a star, the manuscript is read first by a first reader or junior editor. It moves from junior editor to assistance editor to editor. Assuming they all like it, the editor takes it to a weekly marketing meeting. This meeting includes such people as the directors of advertising, publicity, sales, and art. The editor has to convince the committee that it’s saleable, and that it may actually make money.”


Most books, he concludes, do not make money and here’s why. As an example, Penzler uses a $10,000 advance and a per book cost of $20.00.

“10,000 x $20 does not add up to $200,000. The average discount to bookstores, libraries, etc is 48%, which means that if the whole run sells out, the publisher gets $104,000. Almost never does the whole run sell out. If the author is lucky, 7,500 copies will sell—a “75% sell-through,” a very good percentage. (50% is more typical.) This means the publisher actually gets 75% of that $104,000, or $78,000.”


According to Penzler, here’s where the rest of the money goes:

Income
Book Sales 78,000

Expenses
Advance to author 10,000
Line editing 200
Typesetting 3,000
Cover design 3,000
Dust jacket printing 4,000
Prepare printing process 1,000
Printing ($3/book) 30,000
Advertising/promo ($1/book)* 10,000
Royalties to author (less adv)** 5,844

TOTAL INCOME 78,000
TOTAL EXPENSES 67,044
NET PROFIT 10,956

*Usually includes only a prorated share of the catalog space and small ads in local newspapers
**Generally 10% of the cover price on the first 5,000 copies, 12.5% on the next 5,000, and 15% of all copes over 10,000.


Penzler notes that the drain on profit doesn’t stop there. The publisher must also deduct overhead, which he estimates as 15% of sales or a flat fee, usually $20,000, leaving the publisher in the hole to the tune of $9044. The house may be able to recoup some of that loss by selling subsidiary rights (book clubs, foreign rights, audio rights), but in the publishing world, there are no guarantees.

I first read this article in July 2005 and remember feeling slightly queasy. It still leaves me feeling astonished that anybody can get a book published these days. On the other hand, somebody has to be multi-million big. It might as well be you. May the force be with you!

Happy Monday!


 VERY IMPORTANT ANNOUNCEMENT

The first and only rule at Naked Authors is that there are no rules. For the past 2+ years we have tried to entertain you with our posts and hope that we have occasionally succeeded. However, it’s summer and since many of you are going on vacation, we decided to join you. Each of us will regale you this week on his or her regular day, including this Saturday, when you’ll hear from our very own James Grippando. This is no time to lurk, so please stop by and share your thoughts. As of Sunday, we Naked Authors will be heading for the beach.

If you haven't already done so, please subscribe to Naked Authors so we can e-mail you when we begin posting again (I’m sure we’ll all have gained some wisdom about literature and life over the summer). Here’s how: At the bottom of the right column is a box. Above it are the words "enter your e-mail." Do that. Then press “Subscribe me!” That’s all you have to do. You can unsubscribe at any time. We’ll miss you. We hope you'll miss us, too.

Happy Summer!

19 comments:

  1. Morning, Patty,

    Thanks for the dose of reality/downer of Otto's speech.

    But do enjoy your holiday. If you were up north here, it would be a foggy day at the beach!

    Hurry back.We'll miss you guys.

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  2. Au-u-u-g-h-h-h! Must...subscribe...now!

    Must type faster, must type faster!

    *sigh* Will miss all of you--but you'd better have some great pics from the beach...though James, James and Paul can leave those man-thongs behind (no pun intended). Patty, Jackie and Cornelia frolicking in the surf in swimsuits? Heck, I'm still awaiting Patty in a cow skirt.

    (Umm...I'd better make that "waiting to see a photo of Patty when she was wearing a cow skirt". I do not own, nor have I ever been attired in a cow skirt)

    :o)

    Fascinating breakdown of the industry, Patty. Of course, this portion caught my eye:

    "Many of you—no matter how talented you are—are not going to get published. If you do, you are not going to become a success. Even if you are published and have success, you won’t make it multi-million big. Very few people do.”

    Fortunately, I'm insane enough to believe that I'll be among the "very few"--blithely ignoring the "no matter how talented you are" portion.

    From a more practical perspective, otherwise I may as well go bury my head in the sand. After all, I struggle with hopelessness, frustration and despair quite enough as it is, thank you very much. ;o)

    Oh dear, a multi-smiley comment...

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  3. I'm not 100% certain -- it was dark and I was drunk -- but I might have picked up that second babe at a fraternity party in 1968. Which explains the rash.

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  4. patty smiley6/30/2008 8:58 AM

    Louise, you should be down here, sipping Dark and Stormies in balmy 80 degrees.

    Jeff, you WILL in the multi-million minority. Just keep writing.

    Paulie, as always, hilarious.

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  5. patty smiley6/30/2008 9:08 AM

    And by the way, shortly after my first novel was published, a well-known writer cautioned me that I was entering a very crowded market. I shrugged and then told her if I'd worried about how crowded the market was I would have never written the first word. I think your goals should be high and your expectations should be realistic. I once heard Robert Crais say, Some people get to the top on a rocket. Others have to take the stairs. I love that.

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  6. Here's another way to look at that "crowded market", Patty. How often do you wander through a mega-bookstore, see an interesting title and pick it up to read a few lines...only to discover that it's cra-- er, something you'd never bother to read in a million years?

    And that doesn't even include all the ones that aren't interesting enough to pick up--good lord, I hope i don't sound arrogant.

    Paul...1968? Fraternity party? Dad?

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  7. patty smiley6/30/2008 12:38 PM

    Good point, Jeff. What's the count now? 200,000 books published each year, which means that somewhere near 200,000 authors.

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  8. Thanks, Patty, for this post - I am glad I didn't have it before the Book Passage Mystery Writers Conference, or I might have been tempted to read it out, and then it would have become the Misery Writers' Conference.

    Fortunately, I wrote my first book because I wanted to write it, and all the others since that point. I am still amazed that people pay me to write books. And I have never burned my bridges to former income-generating sources of work, because you never know.

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  9. patty smiley6/30/2008 1:49 PM

    Writing for love is the only way to go.

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  10. I will miss you all--
    and please keep in mind, somewhere out there is the guy who rejected Harry Potter as "not really our niche"....

    Of course, the fact that Patterson is taught as a Case Study at Harvard B School tells you that all those horror stories can't be true. The guy was probably trying to minimize the unsolicited manuscripts on the Slush Pile from attorneys / writers-manque

    Happy Summer & REMEMBER THE SUNSCREEN.

    MBH

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  11. have a wonderful time, all of you and stay safe.

    it will be a long, hot summer without you!!! but it gives me a chance to read all the blogs that were written before i found you.


    sybille

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  12. patty smiley6/30/2008 4:39 PM

    MBH, yes a case study he is.

    Sybille, hope you catch up on your reading.

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  13. James O. Born6/30/2008 5:58 PM

    I'll miss reading and writing on the blog.

    Jim

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  14. patty smiley6/30/2008 6:39 PM

    Okay, now I'm getting misty-eyed.

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  15. ....c'mon sing with me;"......so we gotta say goodbye, for the summer....."

    so are you taking off Labour day?

    Jon

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  16. patty smiley6/30/2008 7:52 PM

    Omigosh, Jon! A clue to your identity. Labour?????? Yes, I suppose we need time to put away white shoes and gin-and-tonics for scotch and brown Wellingtons.

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  17. actually I "mis-spoke." I meant to ask, will you be back by Labour day?

    we'll really miss you Go-Lo

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  18. I know I've been remiss in commenting lately, but I will miss you all for the summer. But you guys had better enjoy yourselves. Don't want to hear about sunburn, poison ivy or oak, injuries, family melees, or such unless your excuse is that they only happened for you to use as fodder in the next book you write. Otherwise, have fun!! :-D

    I have a medical procedure today, then I'm going to hunker down with hot chicken broth and/or tea for the next 24 hours with my brand spanking new copies of Patty's latest two books - Short Change and Cool Cache.

    See you on the flipside, guys and gals!
    Cheers,
    Marianne

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  19. Jon, I'll miss you, too. We'll all miss you.

    Oh boy, Marianne. Now you have me worried. Wishing you well.

    Wishing you all well.

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