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What Does the Book Business Look Like on the Inside?

17 November 2013

From Vulture:

“You want to buy this book, Dan?” my boss, Ann Godoff, says, referring to the first work I’m trying to acquire at Random House, by George Saunders. “Well, do a P-and-L for it and we’ll see.”

“What’s a P-and-L?”

“I’ll walk you through it. What’s the advance?”

My only knowledge came from what I had been paid for my own books, so I thought surely I should offer more. “Fifty thousand dollars?”

“For a book of stories? But okay, what’s the payout?”

“Payout?”

“Start with how much of the advance the author will get on signing the contract.”

“Thirty thousand dollars?”

“Twenty-five—half on signing.”

“Okay, 25.”

“On delivery-and-acceptance?”

“Well, 25, I guess.”

“No—you have to have an on-pub payment.”

“Oh. Twenty for D-and-A? And five on-pub?”

“Nothing for paperback on-pub?”

“Oh. Ten for D-and-A, ten for on-pub, and five for the paperback?”

“Nah—it’s okay. You don’t really need a paperback payment. I just wanted to mention it. How many hardcovers are we going to print at the start?”

“Twenty thousand?”

“Too much. Ten.”

“Okay.”

“Second printing?”

“Five?”

“Good! Returns?”

“Returns?”

“How many unsold hardcovers will booksellers send back?”

“Five hundred?”

“Nah. Usually figure one third—in this case, 5,000.”

“Whoa!”

“It’s a shitty business, Dan. What’s the price?”

“Twenty-one ninety-five?” I say, using my own most recent book as a guide.

“Good. So how much will we earn against this advance?”

“____”

“We make about $3 for each hardcover sale, $1 for each paperback.”

“So if we sell 10,000 hardcovers, that’s $30,000.”

“Right.”

“And say 10,000 paperbacks. That’s $40,000.”

“Right—so the P-and-L probably won’t work. So we have to adjust the figures. But remember, you can’t change the returns percentage.”

“Increase the first printing to 15,000 and the second printing to 7,500?”

“That ought to do it. Isn’t this scientific?”

**********************

Now I have been senior literary editor at Random House for six months. I remain in many ways ignorant of the realities of book publishing. But it begins to dawn on me that if a company publishes a hundred original hardcover books a year, it publishes about two per week, on average. And given the limitations on budgets, personnel, and time, many of those books will receive a kind of “basic” publication. Every list—spring, summer, and fall—has its lead titles. Then there are three or four hopefuls trailing along just behind the books that the publisher is investing most heavily in. Then comes a field of also-rans, hoping for the surge of energy provided by an ecstatic front-page review in The New York Times Book Review or by being selected for Oprah’s Book Club. Approximately four out of every five books published lose money. Or five out of six, or six out of seven. Estimates vary, depending on how gloomy the CFO is the day you ask him and what kinds of shell games are being played in Accounting.

Link to the rest at Vulture and thanks to Will for the tip.

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13 Comments to “What Does the Book Business Look Like on the Inside?”

  1. Wow. Validation gets more and more expensive for the writer with every new “insider” story we hear.

  2. I appreciate the author/ editor being candid. This is exactly what authors, esp the young or inexperienced, need to know… among other realities. So the authors can decide,with facts, which way to traverse. Thanks

    However, this is creepy beyond creepy, and certainly WITH more than just guile. Young authors beware, even your agents can be tricked.
    “I am trying to acquire two novels, one completed and the second under way, by a British writer. Ann Godoff likes the finished book, or takes my word for it that it’s good, or she is in a good mood, and has authorized me to offer $100,000 for each book. On the phone to the agent in England, I say, with no guile, “We’re offering a hundred thousand dollars for both books.” He says, with acceptance detectable in his voice, “You mean $50,000 for each?”
    I hesitate, but not too long. “Yes.”
    “Done and done.””

    Shameful.

    • i should have read the entire article before commenting. It is an excerptfrom his forthcoming book about his life. However,the insights into thepersonalities at now Randy Penguin, are worth the read of the article. Not sure he realizes how shocking his revelations will be to some who suspected but didnt know the aridity, the ‘not book content’ attitudes in pub he speaks about. It’s a business. We all knew that. But it appears like a fiefdom with serfs managed and not informed with honesty.

      • Problem is, it’s a business wherein people who buy books don’t know how to create a profit & loss report, and wherein a senior literary editor at Random House “remains, in many ways, ignorant of the reality of book publishing.”

        • Or gets hired as a favor to the boss’ wife. Who doesn’t want him at *her* business. Candid, indeed.

  3. And this is how business decisions are made. The only hard part is to guess correctly how many books will be sold. Thank God for the POD, and e-book.

  4. A similar dialog happens everyday with thousands of products. Books aren’t special.

    • Oh, but they are. Other products generally get the benefit of these weird and wonderful things called ‘market research’ and ‘test marketing’. The publishing industry’s idea of test marketing is to release a product on the same day as a whole raft of other products, ship it to every retailer in the country that will carry a sample, and then promptly forget about it. Any information resulting from this experiment will not be learned (because it is not accurately reported or collected) and would be of no benefit in any case, because for most of those products, the initial shipment is the only shipment.

      This is why publishing is the short bus of the business world.

      • This.

        I mean seriously, what other business espouses the “special snowflake” attitude with a complete, and naïve, sense of insulation from the realities every other business contends with, like publishing? Sure, certain industries, often through hundreds of millions spent in lobbying and political contributions, receive special treatments, de-regulation and bailouts. The problem with BigPub is that they naturally expect it by just being them.

    • books are different [as played by big 5, but also some medium sized presses too] I think. Books are consigned and are sent back at any time, and often re the now defunt Borders, on a reg cycle. The pub company doesnt absorb the offset in income, the author does, all alone.

      Bayer aspirin advertizes winter spring summer fall. Insurance companies, cereal companies, pharma advertizes winter spring summer fall. Microsoftheaded adverts for its products as does Adobe. Like DL and TS said, book pub live in some kind of galactic wind that has stripped them of reason re marketing and sales.

      My personal experience, and forgive me I dont mean to insult anyone, the men at the top in publishing prob dont know how to run a blender, dont lift weights, couldnt change a tire, have no real work clothes, dont play tackle football, etc. Look, reg guys might be in that layer of no know-how also. But, in pub, it looks like some kind of weird brigadoon wherein the principles are literally pretending to be in another time and place that no longer exists. Even the MAx Perkins myth is deader than a doornail. As is Max. lol. But seriously, I cant quite express what Imean… maybe it is that those at the top are not lean and hungry and filled with ideas and living in the REAL world.

      I dont know. Just my .02

  5. “those at the top are not lean and hungry and filled with ideas and living in the REAL world.”

    I don’t think you have ANY trouble expressing what you mean.

    The best part about reading publishing blogs for the past two years has been watching the tragi-comedy of manners. Unfortunately, the tragic part seems to be borne mostly by the authors, the only indispensable part of the chain.

    Also unfortunately, while ‘authors’ is indispensable, any particular author is apparently not: there are plenty of people who ignore all the signs and write anyway – and they are there to replace the ones above them who have lost heart and faith, and go away.

    It has been a real eye-opener: after watching the mixed-up world that is writing and publishing, I know both that it is where I want to be, and that it is a minefield.

    Let the games continue.

    • “comedy of manners.” You said it well ABE. [great initials by the way]

      When I read the couple notes about Lessing’s passing, with the assertion that her work informed an entire generation, and that her work is behind every woman’s writing, [said by Atwood], I realized for the gajillionth time–that trad pub world and many of its most vaunted and cherished authors, never bothered to reach down into the dirt layers of culture many of us came from, not to help, not to carry. They are a world unto themselves. Which is ok, I think. Except for the pillaging and attempts at occupation of all authors. lol.

      Sometimes I think I get too peeved by classism. I think honestly ABE, that’s the name I would give the whole misegosh amongst what’s left of the ‘big’ five. I may be wrong, but it seems that those kings and queens who tried to control lands too large to actually govern, and who squeezed the farmers for tribute against their wills whilst making promises left and right unkept… earned the undying and millenia long hatred and wars of those they annointed themselves ‘gatekeepers’ for.

      I think of Britain and the Irish, but also many many other farmer/fisher groups who rose up against the perfumed hankies. If I could put it that way. I dont mean offense. I just see that it SO reminiscent of classist ignorance and thereby doom to think that the fine food and town cars will always be there for big pub is ‘a gentleman’s business.’ Or was, I guess. But too preciously held by half.

      May Im wrong. Maybe there will be a miraculous renaissance. There was in Eu, but not without war and death to many of the ruling classes. On the other hand, I think of the failed takeovers by peeps like me, the great unwashed, and I am not sure the rabble-way is a good substitute for the hypoxic. lol. Just my .02

  6. This is cringe-worthy. These are not the kind of people I want to do business with. I feel sorry for the writers who hope and pray and bow and scrape for a moment of attention from Big Pub.

    The bit about the agent saying his author wasn’t authorized to speak to the editor … I actually said out loud, “Oh, no you didn’t!” Had I been that author, I would have fired him instantly. Of course I know this goes on all the time, agents telling writers not to talk to anyone the publisher directly. “No, little baby, don’t worry your pretty writer head. Here’s a bottle and a blankie, I’ll take care of everything.”

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