Moderator: Our newest contributor is Marion Gropen, a Simon & Schuster alum well versed in publishing’s business side. Welcome, Marion! – D.R.
David touched on an interesting point. Can fiction be profitably published using POD printing or as e-books? In general, and in my opinion, not yet.
Larger presses rarely want to launch fiction in the small numbers associated with POD printing and e-publishing. They do use these tools for backlist or ARCs (Advance Reading Copies), but when they sign a novel, they put so much money into preparing it for publication that they need to sell many thousands of copies. That requires offset printing.
“Self” and “smaller” as POD and E users: Big overlaps
Let’s look at smaller publishers and self-publishers—in terms of fiction sold as POD and E.
I lump these publishers together, because successful self-publishers are nearly indistinguishable from all the other very small presses. The so-called “self-publishing companies” have other drawbacks for the novelist, but that’s not for today’s entry.
Of shoppers and unknown writers: Customers reluctant to gamble
Can a small press use POD profitably to launch a novel?
The first problem is distribution. Most readers buy novels in bookstores. To make your book available to them, you need bookstores, wholesalers, and a distributor between the publisher and the reader. These layers soak up 65 to 70 percent of the retail price of the book.
With the slightly higher cost of POD printing, there’s not much left for the design, editorial, royalty and marketing costs, let alone overhead and profit, unless the publisher prices the book out of the normal range. And the public doesn’t buy expensive novels by unknown authors in large enough numbers to pay for your work.
The Amazon alternative
Can the books be sold directly to the reader on Amazon? Publishers now have three choices there—BookSurge, CreateSpace (Amazon’s in-house printing and publishing companies) or the Amazon Advantage or Amazon Marketplace programs. Printing with one of Amazon’s in-house printers has advantages (you can give Amazon a 40 percent discount), but it essentially limits you to selling through Amazon. And that’s not enough volume to support most publishing endeavors.
Selling through Amazon Advantage requires that you give Amazon a 55 percent discount and pay the warehousing and picking and packing fees normally covered by a distributor. And customers tend not to buy through Amazon Marketplace nearly as often as they buy through Amazon’s direct sales, for a variety of reasons.
The e-book option
So, if POD doesn’t work, what about e-books? Despite continuing double-digit growth, the total e-book market was approximately $54 million in 2006, in the latest AAP’s latest annual sales summaries. Obviously it has grown significantly since then, but the total is still tiny compared to the $24 billion reported for book publishing as a whole. Those who would buy any novel are never a very large group. If your book is only available to 2/10ths of one percent of the total market, it has an impact on your bottom line.
In short, some novelists can make a living from e-books, but for most, print must be the primary income generator. It remains difficult to make a profit publishing fiction on a small scale, even using digital printing, because of the distribution expenses and because of the lower margins in trade publishing.
All of the above means that publishing fiction is still a form of high-stakes gambling. The investment required is significant, and the rewards are unpredictable.
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About Marion: “I’ve been on the business side of publishing houses for 17 years: five as an accountant in a Simon & Schustre unit, eight as an executive in a modest house, and the last four as a consultant to small presses. My opinions and advice are based on that experience, the things I picked up while getting an MBA in Finance, and some of the more innovative things I’ve found along the way. You may have encountered me elsewhere: I teach at various seminar series, I write articles for association newsletters, and I volunteer as a listmom on 2 of the largest listservs for publishers. If you want to know more about me, my consulting, classes or the software I offer, you can find it at www.GropenAssoc.com.”
