A No-BS Tour of Modern Publishing Part III – The Traditional Industry: The Publishers

Many authors feel that the only “real” way to publish is to go through the well-established method of querying an agent, having your agent pitch to publishing houses, and then signing a deal where the author pays nothing and gets an advance from the publisher. This is called “traditional” publishing – or trade publishing for short. In this article I’d like to give some idea of what this industry really looks like from the inside.

Note: I’ll be focusing on the North American traditional publishing world as it’s where I work and what I’m most intimately familiar with. This article will talk about the publishing side of things; the next article will talk about the bookstores.

First of all, as the CEO of a small press, Promontory Press, let me explain what the traditional publishing model is from the publisher’s point of view. This is how it works:

1. I pay you, the author, money up front for your IP (the manuscript);
2. I pay a bunch of talented folks to edit, design and otherwise get this book ready for market;
3. I pay to prepare an amazing sales pitch to either my distributor (for the big American bookstores) or to the book buyers themselves (here in Canada) and to independent bookstores. Note: the chances of any particular title on my list (such as yours) actually getting picked up for a major, nation-wide buy is slim at best despite all my efforts as publisher to make it irresistible;
4. I pay to print the book and ship it to all the places who want to sell it;
5. I pay to market the book in various ways;
6. four months after the book launches, bookstores will start to actually pay me for the books they’ve bought, less their 40-65% discount. BUT bookstores have the right to return, for full credit and at any time, any books of mine which haven’t been sold to customers.

So it’s a lot of money up front, and the only path for revenue starts to pay between twelve and twenty-four months after I’ve signed you, and those revenues are unreliable at best.

What a stupid business model!

But that’s how traditional publishing works. And woe be to anyone who suggests to the establishment that maybe we should re-think some practices. That’s the way it’s always been, and damn your eyes if you think it’s going to change! (More on this when I talk about self-publishing and hybrid publishing in later articles.)

I hope this enlightens you as to why publishers operate the way we do. Every time we sign a new book we’re committing ourselves to considerable financial risk. So when we look at submissions, we’re of course looking for excellent writing, but just as important we’re looking for a book which we think we can make enough money selling to at least cover our risk (to say nothing of making a profit). Call it cold and hard, but if publishers don’t make money they go out of business, and then they don’t publish anything anymore.

The North American traditional publishing industry is dominated by the Big Five. These are New York-based publishing groups which together control about 80% of trade publishing sales. They are:

• Penguin Random House
• Harper Collins
• Macmillan
• Simon and Schuster
• Hachette

All of them have multiple publishing imprints – for example, you as an author may sign with the publisher Morrow, but Morrow is just a division of Harper Collins – and most publisher names you might recognize are just small components of the Big Five. Each of the Big Five is in turn owned by a larger business group, many of which are actually based in Europe, and none of the Big Five represent the majority of sales for their parent company.

You will definitely need an agent if you want to deal with these publishers. Each company produces between 1000 and 15000 new titles a year, so there’s plenty of opportunity for authors, but keep in mind that you’re competing against thousands and thousands of other aspiring authors, plus thousands of established authors.

The Big Five bring with them the clear advantages of dominant market share, powerful lobbying abilities, and vast pots of money to throw at books they want to support. Most best-selling authors come from the Big Five. For an excellent summary of the current (and shaky) financial positions of the Big Five, please have a look at this recent article by Thad McIlroy at The Future of Publishing.

As almost (but not really) a side note, Amazon is considered the Great Satan by the traditional publishing industry. And Amazon is now doing its own traditional publishing through its imprint Thomas & Mercer. We might need to talk about The Big Six before too long.

Beyond the Big Five, there are hundreds of small presses and micro presses. They can produce anywhere from one to a few hundred new titles each year, and many specialize in their favourite niche or genre, so be sure to research this before submitting your manuscript to them. Small presses often deal directly with authors, but agented submissions are also usually welcome. Small presses pay much smaller advances than the Big Five, so agents aren’t always interested in dealing with small presses as they get a percentage of whatever advance they negotiate for their author.

Small presses can be advantageous for a new author as it is marginally easier than with the Big Five to get your manuscript reviewed. Another advantage is the care and effort a small press will put behind its titles; it only does a small number each year, and the likelihood of a blockbuster is slim, so the publisher needs to ensure that every book does at least reasonably well in sales. However, small presses have much less access to major bookstore shelves and cannot afford (or even execute) huge marketing campaigns.

It’s pretty clear that the traditional publishing industry is in trouble. Sales are mostly flat, there are a lot of mergers going on, and with the rise of online selling and ebooks, the traditional sales routes (i.e, through bookstores) have been seriously disrupted. Self-publishing, although derided as “vanity publishing” by most trade professionals, is also becoming a noticeable threat because traditional books now have a much larger field of competition online, stunting sales growth online even as traditional bookstores are reducing their orders (more on that next time).

Traditional publishing still has a lot of things going for it, the most significant being a solid guarantee of quality for every book it produces, but it is an industry in trouble. It needs to change, and if it changes properly it can be to the benefit of the publishers, the authors, and the readers. Time will tell.

Photo Credit

Photo is pixabay public domain

Recent Bennett R. Coles Articles:

• A No-BS Tour of Modern Publishing Part 4 – The traditional industry: the bookstores (and distributors)
• A No-BS Tour of Modern Publishing Part III – The Traditional Industry: The Publishers
• A No-BS Tour of Modern Publishing Part II – Making sense of the lingo
• A No-BS Tour of Modern Publishing Part I – Author Motivations
• Star Wars: The Next Generation