Hardcover book market goes soft
Publishing is a world of increased competition, shrinking margins and long waits to see any green. Jill Barshay reports on how publishing houses are coping with changing times.
A customer browses a large selection of books at a New York City bookstore. (Spencer Platt/Getty Images)
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TEXT OF STORY
Kai Ryssdal: BookExpo America starts today. It's the largest annual book convention in this country.
This year, it's here in Los Angeles, where publishers, literary agents and retailers are all going to be trolling the floor looking for hits.
There'll be some tension out there, too, because the book business is facing some real challenges as Marketplace's Jill Barshay reports.
Jill Barshay: Lonnette Parks Sisler is a cookbook author. She didn't see her first royalty check until eight months after her cookbook hit the bookstore shelves.
There's a reason Parks Sisler had to wait so long: A book publisher ships thousands of books to bookstores, but it doesn't get paid for the merchandise right away. In fact, bookstores can wait 90 days or so to settle up.Lonnette Parks Sisler: I was surprised that it took that long because I was so excited at the beginning of the contract. I went to bed; it was hard for me to sleep. I was thinking I was going to be rich the next day.
Parks Sisler's publisher is Rudy Shur who owns SquareOne Publishers outside of New York City. He's started to notice a curious thing lately: Bookstores are returning books just before the 90 days are up and the bill is due.
Rudy Shur: And then a week or two later they reorder the books so then they have another 90, 120, 150 days to pay you. So from a publisher's standpoint, it's very frustrating.
Frustrating because it can be months before a publisher sees cash for the books he's shipped. Even if the publisher is lucky enough to get paid, it might have to give a big chunk of it back after six or eight months. That's when bookstores return unsold books for good and expect a refund. In the case of Parks Sisler's cookbook, SquareOne had to take back a quarter of the entire print run -- 2,500 copies.
Robert Love: These are returns, two skids of returns that actually arrived here today.
That's Robert Love. Square One's business manager. He says bookstores are ordering tons of books, more than they can possibly sell. That's because the stores aren't really competing with each other. Instead, they're competing with the Internet. They're afraid that if a customer can't find a title on a shelf, he'll go home and order the book online. So to keep the stores happy, publishers are saddled with the cost of printing too many books and having to take them back.
Love says publishers have themselves to blame.
Love: There was a limited amount of shelf space so a publisher had to be willing to take back old books back, back-list books that weren't selling, in order to get his front-list books on the shelf and in front of the consumer.
Larger publishing houses are even more stretched. John Rose advises publishers at the Boston Consulting Group.
John Rose: Most companies are looking at flat growth and the need to manage costs very effectively which is changing in some ways the nature of the business.
For years, publishers have been cutting personnel. There are now fewer editors who've less time to nurture authors and improve manuscripts and smaller marketing staffs who have to spend the bulk of their resources promoting the big best sellers. That means the books that don't take off right away rarely come to the general public's attention. This is one reason why half of all new books fail.
Rose says the biggest problem publishers face is from new electronic book readers that are starting to sell, like Amazon's Kindle.
Rose: The crazy thing about the book industry is that most of the people in the book industry think about books.
In other words, Rose says the threat to book publishing isn't about returns and refunds of printed paper. It's that new technology can bypass publishing companies altogether. Rose says publishers should think about a world where any writer can publish a book cheaply online and any reader can download it freely.
In New York, I'm Jill Barshay for Marketplace.
Comments
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From Schenectady, NY, 08/31/2008
I am interested in publishing a book, most likely hard cover, soon. Is it true that if you sign with a publisher to distribute, you receive approx. 10% of the profits after all is said and done? I read above that a 70% profit margin is obtainable going the indy route. Is this true?
Also, ultimately, are we responsible for the marketing of our own books, whether it is published by a big publisher or going the independent route? If so, it makes much more sense to go the indy route since you are in control of your own destiny.
One thing I find amazing is that none of the Harry Potter books, if I am not mistaken, ever went to paperback, which is the normal route. Wouldn't we all love to be JK Rowling?
Thanks.
From Los Gatos, CA, 05/30/2008
Great story Jill, definitely sums up the challenges faced by the traditional book publishing industry. Earlier this month, I launched a new digital publishing startup that allows independent authors to digitally publish their own DRM-free multi-format ebook, set their price and sampling percentage, and receive 85% of the net sales proceeds. The idea came to me after my own novel was rejected by all the major publishers.
As commenter April Hamilton correctly points out, in the future more and more authors will *choose* to remain independent, especially as the tools become available that help authors do a better job of marketing their own books than the traditional publishers.
We've seen this happen already in the music industry. It's only a matter of time before even big name authors start to turn their backs on publishers and go independent.
Mark Coker
Founder
Smashwords
http://www.smashwords.com
From L.A., CA, 05/29/2008
I'm also an author who's gone totally indie and I've never regretted it for a second. Given the readily available, quality, inexpensive POD and ebook technologies now available to authors, together with today's highly-consolidated, blockbuster-centric American publishing business model, I've concluded there are far more reasons NOT to sign with a big publisher nowadays than TO sign with one. Unless you're a prestige client, you'll get a paltry advance, you'll be on your own to promote your book, you can't even be sure your book will show up on brick-and-mortar bookstore shelves anymore, and on top of everything, if your book fails to 'break out' you'll be dumped by your publisher and viewed as damaged goods by the few other big houses in town---worse off than if you'd never published with a major to begin with. As an indie I retain all my rights and all the control over my work, and I earn much higher author royalties to boot. The time has never been better for an indie author movement, and by documenting my experiences online and in my how-to book, The IndieAuthor Guide (now available at CreateSpace dot com and coming to Amazon by mid-June), I hope to encourage many more writers to abandon the mainstream in favor of indie authorship. http://www.aprillhamilton.com
From NJ, 05/29/2008
Intended to type "document" instead of "documant" in my comment above - my apologies.
From Mendham, NJ, 05/29/2008
Another interesting story - thanks.
Powerful and inexpensive technology continues to democratize creative industries, including book publishing, and bring-down barriers between content creators and consumers.
I had 1,000 units of my specialty book for organizing personal & financial affairs for $13 apiece (used expensive high quality materials that were needed due to the nature of the book) and I sell them for $50.00 through local bookstores (I pay a 40% a cut if my book is prominently placed) and through my website (www.affairsorganizer.com) which links to Amazon.com
A major big box retailer wanted to sell through their website (I can documant this), but 95% of the profit would have gone to reduced pricing, their distributor, and the retailer.
My book isn't selling like Harry Potter, but with profit margins around 70%, it doesn't need to.
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