Posts Tagged ‘The economics of publishing’

MANY FAR MORE interesting people than me have had their say about the bizarre kerfuffle surrounding the Cereal Killer Cafe in Brick Lane, east London, and Channel 4 News, but.

Basically, a new cafe has been set up in a fairly run-down area of London.

It sells bowls of cereal to people for about three quid a pop. Its decor is all 1970s and 1980s kitsch (I think), with Shoot! annuals and old copies of Smash Hits about the place, which means customers get a metaphorical taste of childhood along with the real one.

Channel 4 ambush-interviewed the owner on Day One, and asked him what he thought he was doing selling cereal for £3 a bowl when there were poor people living in the area.

Why am I interested?

Because that question betrays an utter lack of understanding on the part of that journalist as to how small businesses (maybe any business) operate, and I run a small business.

Worse, it was later picked up by (among others) Isabel Hardman, who writes for The Spectator, a magazine I read.

Her piece was described as ‘a defence’, but it didn’t really address the main issue, which is: Is £3.20 actually a rip-off for a bowl of cereal?

Answer: if Cereal Killer Cafe’s only cost is the cereal, which they can buy in at, at most, c40p a go (this is a non-wholesale price – punters can buy boxes of the stuff at £5 for thirteen servings), then maybe you could argue that it is.

But they aren’t.

As well as cereal (some of which will doubtless have to be thrown away as wastage), I’m fairly sure their other costs will include (but are not necessarily limited to):

  • Rent
  • Business rates
  • Staff costs
  • Bowls
  • Spoons
  • Milk
  • Sugar
  • Cleaning and maintenance
  • Decor and general kitscherie
  • Advertising and promotion (they need less of this now)
  • Book-keeping or accountancy

Every single bowl of cereal that they sell has to make a contribution to those costs, or they are gone.

And it’s when you add all of these things up that you realise that there may not be that much profit to take out of the Cereal Killer Cafe – profit, of course, upon which they will also have to pay tax.

It’s not dissimilar to the cost of a book.

Our latest is At The Going Down Of The Sun, a heart-rending series of pieces about soldiers and Royal Marines killed in Afghanistan.

The jacket price is £18.99, which we are very conscious is quite a lot of money.

But only an idiot or a Channel 4 reporter would assume that the entire £18.99 is our take, or that the fact that there are some people who simply can’t afford £18.99 for a copy should influence our pricing. It couldn’t.

This is because, by the time was have paid for typesetting, proofreading, jacket design, printing, images, author’s expenses (significant, when you consider he travelled all over the UK to interview almost a hundred people), the retailer’s share (usually fifty per cent of the jacket price or more) and the cost of sales and distribution, and then the author royalty, we will make a very modest profit (nothing like even the print bill alone) if we sell out the entire print run.

I am no accountant, and I have no idea if there are major illegal tax scams being perpetrated by international business conglomerates – and if there are I think they should be prosecuted – but seriously, small cafes in Brick Lane are not a fair target, no matter how irritating one might find their beards.

Read Full Post »

The Intrigant praises Chris Grayling for his bold plan to increase illiteracy among prisoners by banning them from reading books:

Tough on literacy, tough on the causes of literacy: congratulations on your ban on sending books into prison under the newly written rules. You and I don’t need to read books so why should people who have committed a crime be allowed to receive them?

I know that books can be sent to the inmates of Guantanamo Bay and that books were sent to British POWs imprisoned in Nazi Germany and Dostoevsky received books in the Peter-and-Paul Fortress during his incarceration in 1850. Remember: the George W. Bush-era USA, the German High Command of the 1940s and an autocratic Tsar have no lessons to teach you. They are all a bunch of pinko-lefties.

It does seem a remarkably stupid and vindictive decision. Grayling is obviously not a student of Dostoevsky.

(It’s a little-known fact that Wasting Police Time was the most popular book in English prisons from 2007 to 2011.)

The New York Times says rent increases are forcing bookshops out of Manhattan.

When Sarah McNally, the owner of McNally Jackson bookstore in Lower Manhattan, set out to open a second location, she went to a neighborhood with a sterling literary reputation, the home turf of writers from Edgar Allan Poe to Nora Ephron: the Upper West Side.

She was stopped by the skyscraper-high rents.

“They were unsustainable,” Ms. McNally said. “Small spaces for $40,000 or more each month. It was so disheartening.”

Passive Aggression in libraries.

And an interesting book about a subject close to our hearts, northern soul.

As ever, the Amazon reviews are very interesting. I particularly enjoyed this three-star review from ‘Rian Arren':

This review is from: Northern Soul: An Illustrated History (Hardcover)

The book was purchased as a gift and has not been read by me. However, I am sure the recipient will be extremely pleased with it.
In case you’re wondering what this ‘northern soul’ is, allow Mr Lou Pride to explain:

Read Full Post »

The New York Times reports that James Patterson is giving $1 million of his personal fortune to dozens of bookstores.

Alberto Mingardi, of Italy’s Istituto Bruno Leoni (their version of the Adam Smith Institute), believes ‘Patterson is doing something admirable. He has preferences – for the paper book versus the ebook, for the small bookseller vs the large chain – and he is putting his money where his mouth is.’

Though he is interested in the economics:

[C]urrently, he’s given away $267,000 to 54 bookstores. This means that he has donated, on average, a bit less than $5,000 to each bookseller. It is rather unlikely that such a small amount of money helps independent bookstores to thrive in an increasingly difficult market. It’d be more interested to know something on the criteria Patterson is following to give away money to bookstore X instead of bookstore Y. He can do whatever he wants with his money – but I do not really understand how he could have an impact.

$5,000 is obviously better than $0,000. I’ve never read a James Patterson book, perhaps I’ll try one. Maybe (as a cynic points out in the comments below) this is the idea. Personally, I can’t believe that a man as wealthy as Patterson needs any more cash. I’m sure his heart is in the right place. Whether it will achieve anything in the long term, who can say.

After all, even best-selling authors are struggling to make any cash, says The Guardian.

Thomson is not yet broke, but he’s up against it. The story of his garret is a parable of literary life in Britain today. Ever since the credit crunch of 2008 writers have been tightening belts, cutting back and, in extreme cases, staring into an abyss of penury. “Last year,” said novelist Paul Bailey, speaking to the Observer in 2010, “was sheer hell”. Off the record, other writers will freely confide their fears for the future, wondering aloud about how they will make ends meet. Hanif Kureishi, for instance, recently swindled out of his life savings, told me how difficult his life had become.

I went to see 12 Years a Slave the other day, and that does engender a little perspective. I didn’t really enjoy the film, actually, but the book is very good indeed, and at 49p for this e-version is highly recommended. Wish we had thought to stick it out as an eBook!


Read Full Post »

The average author earns less than £600 per year, according to The Guardian.

This has long been a topic of interest for writers, perhaps unsurprisingly.

Dorothy Parker (asked which kind of writing pays best): ‘Ransom notes.’

Johnson: ‘No man but a blockhead ever wrote, except for money.’

Mark Twain: ‘Write without pay until someone offers pay. If nobody offers within three years, the candidate may look upon this as a sign that sawing wood is what he was intended for.’

Meanwhile, Sylvia Day (whose work I’ve not read – perhaps I should) is being paid at least ten million dollars as an advance for some romance books. I would put a fiver on the publisher not making that back. Mind you, it’s not an overnight success story. ‘Ms. Day, 40, has been a professional novelist for the last decade, writing more than 20 books that were released by a handful of publishers,’ says the NYT.

In other news, Batman’s greatest boner, the 15 most depressing books ever written, and economics professor Don Boudreaux on growth (he’s making an interesting case that we’re all much better off than we were, using an old Sears catalogue and 2014 smartphones vs ‘a telephone, a calculator, an alarm clock, a Walk-Man or boom box, a compass, a set of road maps, and a Rolodex’).

Read Full Post »

IT WAS THE trial of the century… an English aristocrat, haughty and proud, stood in the shadow of the noose – brought low by a terrible act of vengeance.
In the dock: Earl Ferrers, a violent, eccentric but hugely-rich landowner, with vast estates, a noble pedigree going back centuries, and an eye for the ladies.
The charge: murder.
Ferrers had had a troubled marriage to his wife, the beautiful Countess Mary. He kept a mistress, by whom he fathered four children, and was a rabble-rousing drunk, much given to violence and cruelty when in his cups.
Some years earlier, Mary had left him, after succeeding in a scandalous suit of separation at the church court in London.
The Earl believed – wrongly – that a servant called John Johnson had helped his wife to escape his clutches.
He had held a simmering grudge against Johnson ever since; on January 18, 1760, this well of resentment overflowed.
He lured the unfortunate man to the study in his grand Hall under a pretext… and then locked the door, forced the terrified man to his knees and shot him.
Johnson died early the next day, despite the best efforts of one of the country’s leading surgeons.
The aristocratic killer was caught by an angry mob of his own tenants, who held him as he fled, half-dressed, for his horse.
Now he was on trial for his life, before the House of Lords.
The cream of London High Society packed the House to watch the case unfold.
Outside, thousands of commoners waited near Tyburn, where a special gallows was being built.
The question on their minds: was Ferrers about to become the last English nobleman to be executed?

InTheShadowOfTheNoose_cover-ebookIn other news, Apple’s eBook pricing court case and some reaction.

And – in the wake of the Lions, and then an Ashes opener that actually left me feeling ill – why does anyone pay to read newspaper sports pages any more, when there are better-written blogs like these out there, f-o-c?

Cricinfo, of course. ‘The stats suggest sloppiness is increasing. As Andy Zaltzman pointed out, the first innings of this Test at Trent Bridge was the third time in the past 18 months that all the England top six had got into double figures but failed to get to 50; it had happened three times in the previous half-century.’

King Cricket: ‘Australia bat all the way down to number 11… Their problem is that they don’t bat all the way up to number one.’

The Old Batsman: ‘Are fast bowlers getting slower?’

And, from the enemy camp, After Grog Blog Cricket.

Read Full Post »

After Iain Banks’ sad and early death from cancer, his novel, The Quarry, is being published on June 20 as a hardback, rrp £18.99.

Sainsbury’s and Amazon were each offering it to pre-ordering customers at £3.99 (though these prices have now risen considerably).

Independent booksellers ‘reacted with shock and anger’ to the low pricing, says The Bookseller.

Nic Bottomley, owner of Mr B’s Emporium of Reading Delights in Bath, …criticised the dramatic price reduction as a “brazen” move. He said: “I think that is just cynical. I… think if Amazon gets some bad press from it, it might encourage more customers to buy it from us because of how it looks. It is cashing in on a recently deceased, well-loved author and I think there some customers who would be put off that.”

Sheila O’Reilly, owner of Dulwich Books in London, …said: “There is just no way anyone can compete with that price. They have got to be selling them as a loss-leader.”

Keith Smith, owner of Warwick and Kenilworth bookshops, said supermarkets and Amazon sell books for less than the price they buy them for to encourage people to shop at their stores. He said: “If I could sell it at £3.99 I would do very well with it. Amazon can afford to sell it at a loss because they don’t pay enough tax in the UK. It is scandalous.”

However, the booksellers all said they would still stock and sell copies of The Quarry for full rrp.

I love small indie bookshops as much as, and probably more than, the next man, but I just don’t get this. I can see the existential problem for bookshops, and I share their concern, but bookshops exist for customers, not the other way around. If the old model doesn’t work, it may just be that there’s not much you can do about it. After all, it’s not a crime to price stuff low so as to get people into your shops.

And I’m not sure how you define ‘enough tax’ other than ‘all the tax due under the law’? It seems Amazon has been paying all the tax due, not least because it doesn’t make much of a profit. (Matt Yglesias is hardly a neoliberal right-wing economics writer, and even he thinks ‘Amazon is a charitable organization being run by elements of the investment community for the benefit of consumers‘.)

I’m also not really sure how it is ‘cashing in’ on a dead author’s memory to sell a book at a huge loss. (It might be argued that selling it at full rrp is cashing in?) You don’t have to buy anything else from Sainsbury’s, after all. You could just buy your £3.99 bargain, leaving you with £15 to spend on other books (or other stuff) elsewhere.

I don’t like Iain Banks’ books – at least, I didn’t enjoy the two I have read, The Crow Road and The Wasp Factory – so I won’t be buying The Quarry. But if I owned a bookshop, I’d have been ordering my stock of the book from Sainsbury’s and Amazon.

Sadly, in the long term indie bookshops have much bigger problems, anyway.

Read Full Post »

Chris Grayling is planning big changes to the English (and Welsh) legal system, among them further cuts to legal aid, and allowing competition for legal aid contracts.

It seems to me that if the State takes upon itself the right to prosecute individuals, and ultimately to remove their liberty, it ought to at least allow a level playing field – that is, it ought to fund the defence, properly.

My sister, a barrister, is up in arms about it all – as are most of her colleagues, including Toby Potts: so much so that she’s written to The Graun about it.

The upshot, she says, is that outside firms like Serco and, oddly, Eddie Stobart will end up running defence work – and that they will be under commercial pressure to get defendants to plead guilty, as the employed lawyers involved will earn the same fee for the firm for a quick guilty plea hearing as they would for a two-day trial.

The Bar does have an image problem. Everyone thinks that barristers are pompous, overpaid, bewigged windbags, and in the case of my sister they are certainly correct*.

Chris Grayling also blames them for a lot of the delays in court. This idea, says my sis, is

breathtaking, particularly from a Minister who bears ultimate responsibility for the delays occasioned to justice daily. I regularly work until 2am or later when in a trial, to ensure that admissions, legal arguments, and editing of statements and interviews, as well as my preparation for witnesses and speeches are ready. I do not ask judges (nor would expect to receive) time for this at Court. I also am regularly left sitting for hours at court mid-trial, case delayed, if not completely adjourned, or jury dismissed. Why? Because the interpreter has again not turned up, on time or at all, or has been discovered, part way through a four-week trial, not to have been interpreting correctly. Or the defendant has not been put on the prison van, or, if he has, he has been brought to X Crown Court from Y prison fifty miles away, via Z, forty miles in the opposite direction. These are not exaggerations. Last year I defended the rape of a five-year-old child, who was made to wait at court for several days whilst an interpreter was persuaded to attend. No one was held to account for this. I could give example after example from personal experience.

It’s almost like there’s a book in it!

Anyway, if you’re interested in stopping this devastation of a legal system copied around the world, you can sign a petition here.

Meanwhile, The Bookseller is still worried about the future of publishing, and eBooks – the future is all about piracy, self-publishing and library lending, apparently.

*Joke. She’s not pompous, or overpaid. As she says, she regularly works through the night on cases – I’ve been at her house while she’s doing so, and it’s quite boring for visitors. On some cases, depending on how they progress, she can earn a per hour rate not far off the minimum wage, out of which she must pay VAT, chambers rent and tax. She is a windbag, though.

Read Full Post »

Older Posts »


Get every new post delivered to your Inbox.

Join 364 other followers

%d bloggers like this: