Quote:
Originally Posted by riemann42
One of the largest costs of any publish house is the advances they give authors.
Take away these advances, and you take away quality, and hurt authors, whose art you are appreciating when you read (even a trashy) a novel or whose work and research you are getting the benefit of when you read non-fiction.
So in short, the stuff still has to cost at least 60% of what it costs today, if not more, just to cover this.
|
There was a good article (I think it was in Slate) linked from here a while back which broke down the cost of various stages of the publishing process, and showed how much net profit the publisher cleared from a hardcover novel selling for the typical price of $26. If I recall correctly, it came out to 90 cents, and the author's royalties (at a fairly high 15%) came to $3.90. What happened to the rest? Well, out of the $13 wholesale price, the other $8.20 was eaten by overhead, printing costs, warehousing, distribution, and returns -- especially returns.
The million-dollar advances that make the news (or did in the 90's, at least) are the very rare exception, not the norm. Your average author gets an advance which is
a tiny fraction of that, and hopes the book will earn out that advance so as to keep the publisher happy, and will keep on selling long enough to get his kids through college. I certainly have nothing against the concept of advances (seeing as I'm an aspiring writer and all!) but I don't think they're essential to the quality of books. Consider how many excellent books were written back in the days before the advance was invented, when authors had to wait for the royalties to trickle in before they saw a penny.
That "keep on selling" part is what's so difficult today, and what is hurting those authors the most. While online sales (Amazon, etc.) are increasingly significant, if a book isn't on store shelves, the author has lost their major route to the customer, and lost sales they may never regain elsewhere. People who want something to read want to pick it up, take it home, and read it, not wait for Amazon to ship the thing, UPS to leave it out in the rain, etc. For a wide variety of reasons, particularly tax-related, new books aren't kept on the shelves as long as they used to be. This is particularly true of genre fiction, but it affects all categories. So a book that would have been bringing in royalties for years, back in the day, now never even earns out its advance (how can it, when people can't see it, let alone buy it?) and the author becomes "unmarketable" -- and therefore unpublishable.
Let's look specifically at mass-market genre fiction right now, since that seems to be a major part of the reading interest of a lot of MobileRead members, myself included. A very large percentage of genre fiction is never published in hardcover. The fact that a book can be published on dead trees, with all the expense that entails, retail for $8, and turn a significant profit, demonstrates that a publisher can get a book out the door for $4 (the wholesale price) even with the physical production costs, returns, and the whole nine yards. When you take out the cost of printing the books, warehousing them, shipping them all over the place, and providing full refunds for unsold copies, there isn't a lot left of that $4. But there's enough left for the publisher to make a profit, and in fact for mass-market paperback sales to be the bread and butter of many publishers for decades.
So if a publisher can make a profit off of something they're grossing $4 on
with all those expenses, they should be able to make a profit on something they're grossing less than $4 on when you take those expenses out of it. Ebooks don't have to be printed, or loaded onto trucks, or stored (and taxed) in warehouses, and especially not returned (which, by the way, through the "reserve against returns", is another way in which authors get screwed by the current system). On that $8 MM paperback, the author will probably get 6% of cover, less than 50 cents, so it would take around 10k copies sold for it to earn out a typical $5k advance. But what if it sold for $5 as an ebook? If the author is still getting 50 cents a copy, and overhead amounts to a dollar a book, even if the publisher isn't selling directly, but selling to a retailer at a 50% discount, that publisher is still clearing a dollar per copy -- and more people are going to buy a $5 book than a $25 book. And I'm being very generous to the publisher in my assumptions about overhead.
In short, if publishers can (as they do) make a profit on $8 MM paperbacks, they can make an equal or greater profit on even cheaper ebooks. Make the ebooks cheaper and not only will they sell more, but cheap ebooks will drive the sales of ebook readers, which will in turn expand the market for ebooks and increase sales (and profits). That's where the money is: the ultimate mass market.
Further, to the author's benefit, as ebooks become the new mass market, a book can keep on earning long after it has vanished from brick-and-mortar bookstore shelves. No more buyers will pass up a series because only books 5 and 6 are still in print. No more reserves against returns. No more "unpublishable" authors because the publisher's one-time investment in getting the book into print will keep paying them (and the author) for years, perhaps decades. For authors, it's pure win.