Читать книгу The Three Percent Problem - Chad W. Post - Страница 13

It’s no secret that publishing folk like to complain a lot and are somewhat addicted to “doom and gloom” prognostications about their industry. Sales are never what they should be (nor are salaries), there can never be enough book coverage for a hot title, everyone is under a lot of pressure to meet unrealistic expectations, and with thousands of over-educated, well-read people entering the work force every year, no one’s job feels safe. See this year’s surprise firing of Jane Friedman, CEO of HarperCollins, in June 2008. Or the fact that Peter Olson stepped down after profits at Random House dropped 4.7%. That’s not to say that publishing people can’t relax, or don’t enjoy the business, but it has—increasingly—become a business, and the strings and complications that go along with increasing profit margins impact all the various aspects of publishing and are altering the industry and literary culture as a whole.

There’s a famous publishing joke that goes, “Do you know how to make a small fortune in publishing? . . . Start with a large one.” Throughout modern times, publishing has been a small margin industry. Rich people got involved because of the glamour, the importance that comes from shaping our culture, the joy of working with intelligent artists. Not to mention the cocktail parties. (Nowadays, you can add free books to that list.) Rarely—if ever—did people start up publishing houses with the idea that this would make them millions. Same goes for bookstores and bookstore owners. In the best of times, these businesses aim for 3% profit margins. As conglomerates took over the industry though, and houses started merging, the expectations jumped to the 10% range, fundamentally changing the rules of the game and, in my opinion, pushing the industry into its current tenuous position where a lot of people are filled with anxiety and dread.

In September 2008, Boris Kachka wrote a nice overview article for New York magazine about the current state of publishing simply titled The End. In this piece he examined several components of the book business, providing evidence about how the system is essentially broke. Here’s how he summed it up:

Sales at the five big publishers were up 0.5 percent in the first half of this year, bookstores sales tanked in June, and a full-year decline is expected. But pretty much every aspect of this business seems to be in turmoil. There’s the floundering of the few remaining semi-independent midsize publishers; the ouster of two powerful CEOs—one who inspired editors and one who at least let them be; the desperate race to evolve into ebook producers; the dire state of Borders, the only real competitor to Barnes & Noble; the feeling that outrageous money is being wasted on mediocre books; and Amazon.com, which many publishers look upon as a power-hungry monster bent on cornering the whole business.

Kachka’s main focus is on commercial publishers, which is fine since the big houses are great case studies in what’s gone wrong, and besides his focus on the major houses leaves me something to add to the conversation.

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Although it’s a bit more complicated than this, the survival strategy of commercial publishers is the “a few big books float the boat” model. This is the idea that most books published by a house will lose money, or at best breakeven, but that every year a few titles will explode, far outselling their costs and generating enough revenue to keep the house afloat. You often hear publishers say things like, “we publish those kind of books so that we can do more literary stuff.” That’s a friendly way of saying that they need some obvious money making books to sell well, otherwise the publishing house would be screwed.

Anecdotally, it often seems that these “break-thru” books are completely accidental. Like Jonathan Franzen’s The Corrections or most any book that Oprah ends up selecting for her book club. “Unexpected successes” pop up every single year. Nevertheless, from the top CEOs on down everyone feels the pressure of acquiring, or marketing, or selling, this year’s “big book” and reaping the profits that come along with these sales.

As a result, huge amounts of money are bandied about on concepts and names. Many of which don’t work out so well. A few recent examples are listed at the end of the New York article, including the $8 million advance to Charles Frazier for Thirteen Moons, a book that sold approx. 368,000 copies, leaving $5.5 million of the advance unrecouped. My personal favorite is Dewey: A Small-Town Library Cat Who Touched the World, which is described in typical movie-pitch comparison style as “Marley & Me meets The Bridges of Madison County in this heartwarming true story.” Advance? One and a quarter million dollars.

Having spent so much on books like these, publishers are then obligated to spend a vast amount of money marketing and publicizing these big acquisitions. Granted, a good deal of the advance money is made up by selling translations rights to countries all over the world (a one-way street as I’m sure you already know), but these titles are also expected to sell really well.

It’s worth taking a moment here to look at the math and explain a bit about how book sales work in America. I believe this is pretty similar to other countries, but not entirely. In the States the big publishers have their own sales force and warehouses, both of which cost a pretty penny, but are necessary to ensure that a publisher gets the largest market penetration possible. (More on this when we talk about independent publishers.) Each of the different outlets publishers sell to—wholesalers, independent bookstores, chains, Amazon, Costco and Sam’s Club, libraries, etc.—receive a different discount, usually in the range of 45-50%.

Sticking with Thirteen Moons, the retail price on the hardcover edition is $26.95, so, for each sale, Random House can expect approx. $13.75 in revenue. Leaving all subrights sales aside, and using New York’s sales figure of 368,000, Random House made approx. $5 million in sales of this book. A huge figure for a lot of presses, but a number that’s less than the initial advance, and definitely less than the total costs that went into publishing and promoting the book. I’ll assure you that this wasn’t the book that allowed Random House to do all their “literary” breakeven titles this year.

Nevertheless, this book sold exceptionally well compared to many others. I was recently talking with a former editor at one of the big six publishers, who said that titles he acquired usually sold in the 5-7,000 range, far less than the 15-20,000 copies his bosses expected his books to sell, sales levels that would’ve allowed the book to break even. He also said that he always thought his sales were incredibly low (publishers always, always lie about print runs and sales, so the numbers you see in print are inflated) until someone from another big house shared privileged sales info leading both editors to realize that most literary titles just don’t sell very well.

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Switching over to bookstores, it’s worth pointing out that, unlike other parts of the world, America doesn’t have a fixed price policy. Stores can discount books however they’d like, which has resulted in a fiercely competitive market where Amazon.com undercuts brick-and-mortar stores, Costco sells books as a loss-leader, and traditional independents stores have a hell of a time staying in business. Although Amazon claims that they survive on a “long tail” model (i.e., the idea that single copy sales for an infinite amount of books is far greater than a huge amount of sales for a small amount of titles), most stores operate on the same principle as the big publishers: you make your money by selling a ton of copies of a few select titles. That’s what drives Barnes & Noble and their huge stacks of books, and is the reason why one additional percentage point discount (chains frequently get a 46% volume discount whereas independents get 45%) can lead to enormous profits.

Paul Slovak, the publisher of Viking Penguin, once mentioned that he believed that at any moment in time everyone in the country is reading the same twelve books. Obviously he’s exaggerating—a bit—but it sure seems that way. The books on display at a chain store in New York City are almost identical to the ones on display in Denver, or in Peoria. To explain why that’s the case is actually a bit more complicated than it might first appear.

What it comes down to is which books the big presses have decided to really push. It’s almost like a horse race—you need a winner to keep betting, you have a bunch of horses in your stable, and you put all your cash on the ones you think will “break-thru.” These are the books that the houses advertise all over the country, that they push hard to media outlets, and for which they decide to do extensive author tours. They also use a lot of co-op money to promote these books. Co-op money is cash that a publisher gives to a bookstore to display and promote its books. For example, the front tables at the chain stores are paid for, as are the end caps, as are other special displays.

With these books on display, and heavily discounted, throughout the country, and online, with big, trustworthy publishers spending lots of time and money promoting these particular titles, it’s no surprise that these become the books that everyone is reading.