Posts Tagged ‘The economics of publishing’

The eBook of ANIMAL QC is now available for pre-order on Kindle, and we’ve spent quite a long time working out what to charge for it.

The market price for the electronic version of a new hardback seems to be around 60% of the paper version – I say ‘seems to be’, because there’s no hard and fast rule (and, to be perfectly honest, we’re really just sort of following the herd, albeit being a bit cheaper than most other publishers).

After lengthy internal wrangling, we’ve priced the eBook at £7.99 – less than half the price of the hardback*, but still not an insignificant purchase for a lot of people.

We think £7.99 for the eBook is a fair price.

It’s true that we don’t have the same level of production cost as we do with a paper book (though it’s not free!), and that we don’t pay the retailer as much (though we do, in common with other publishers, pay the author more).

But then, collectively we have spent a great deal of time working on the book with Gary, and we’ll need to sell an awful lot of e-copies to show a profit on our time alone.

Never mind us, though: does it represent good value?

Well, perhaps naively, I assume that most† of the value of a book resides in the words (unless you’re talking about Kim Kardashian’s latest).

It terms of sheer quantity, you’re getting a good deal – it’s around 100,000 words long, so even reasonably quick readers will derive several hours of entertainment from it, and way more in £-per-minute than going to the flicks to watch a Hollywood film, say.

(We took the kids to see Jurassic World at the weekend; two adults, two children, one litre of Coke Zero and four smallish tubs of sweets came to £46; we enjoyed it, though we couldn’t help but question the number of velociraptors, and their astonishing ability to survive being crushed against trees by speeding trucks. I think we should have gone to see Minions, where no questions of reality should intrude.)

Gary as a fairy

Gary Bell QC (left). Can an eBook by this man really be worth £7.99? The jury is out (but then they usually come back in Gary’s favour).

In terms of quality, only readers can judge that. I will say that you will never have read – and perhaps never will read – a more astonishing memoir by a leading British barrister.

Re the pricing of eBooks, it’s a strange thing. My basic understanding of pricing is that it is a signal, of scarcity. An apple costs (say) 50p because that price contains the cost to produce and make available the apple, plus some profit.

The profit reflects the fact that the buyer knows that apples are not scarce and can be bought elsewhere (or substituted by plums).

This applies to paper books, too; – they are priced at a level which tries to take account of unknown demand and known supply.

With eBooks, there is no supply problem: we can supply a billion. Maybe this is what makes it hard to price them.

*At £16.99, the hardback is also very reasonable: once you tot up the costs of production, sales and distribution and the (at least) fifty per cent of the jacket price which goes to the retailers, and then the author’s royalty, you can see that the return on the fairly substantial amount of cash we’re outlaying and risking is not vast. Unless we sell 500,000 copies, in which case, yes it’s vast[ish].

†Whenever I travel by train I usually do so with my copy of whatever book I’m reading wrapped inside a loose jacket for something by Gogol or Proust. I’ve often wondered whether there’s a market for 50 Shades of Grey-type soft porn disguised as A Tale of Two Cities, or a Jack Reacheresque thriller with a Dostoevsky jacket. Chicks dig Dostoevsky, apparently.

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I’m never quite sure whether these promotions are worth entering, but that for AT THE GOING DOWN OF THE SUN seems to have worked.

As I write, it’s currently the No1 book in the Afghan war category, and No1 in Royal Marines related books, too. (There are a number of Marines featured, but it’s mostly about the Army.)

The current price – £1.99 – jumps back up to nearly £7 later today, so now is a good time to buy if you’re umming and ahhing.

For an idea of the content, click on this link to the story of Aaron McCormick – there’s more on each of the nineteen other chapters at the links at the bottom of that page.

I doubt you’ll have a more emotional read this year.


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At The Going Down Of The Sun – which contains heart-breaking stories such as this, this, and this – will be in a one-week kindle promotion on Amazon from tomorrow.

The price will be dropped from £7.99 to £1.99 during that time.

Kindle pricing continues to be a bit of an issue (for us). To me, £7.99 feels like quite a lot for an eBook, in the same way that I don’t mind paying £10 for a CD (or a lot more for a piece of rare vinyl) but I don’t like shelling out a similar amount for the electronic version.

On the other hand, if you have an £18.99 hardback out there then you feel you need to support it, rather than undercut it, with the eBook.

We could have priced the hardback a little lower, but even at a RRP of £18.99 we won’t do much more than break even on it even if they all sell, given the expenses associated with a book of this type.

Meanwhile nice reviews and comments continue to accrue slowly (if you’ve read and enjoyed the book, please do review it at Amazon, or elsewhere).

Piers Morgan called it ‘a brilliant book’ the other day; he may not be everyone’s cup of tea, Piers, but I knew him years ago and his heart is very definitely in the right place. He made a mistake with the Mirror soldiers story, but he paid for that with his job. I can’t quite understand the hatred.

Here’s a nice Facebook mention:

Facebook comments1


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According to Nicola Solomon, the chief executive of the Society of Authors, traditional publishing is unfair and unsustainable because authors are earning less than they were, while publishers’ earning are up or, at worst, holding firm.

Apparently, authors’ median incomes have dropped to £11,000 pa – which doesn’t sound all that bad, until you remember that that includes the earnings of whoever has replaced JK Rowling and the Fifty Shades of Grey author in the last 12 months and the rest of the top couple of hundred writers. Clearly, for most people it is a (hopefully) paid hobby which may one day develop into a career.

Meanwhile, ‘publishers, retailers and agents are all now taking a larger slice of the profit when a book is sold’.

Authors need fair remuneration if they are to keep writing and producing quality work, she said.

Publisher profits are holding up and, broadly, so are total book sales if you include ebooks but authors are receiving less per book and less overall due mainly to the fact that they are only paid a small percentage of publishers’ net receipts on ebooks and because large advances have gone except for a handful of celebrity authors.

(P)ublishers are doing less for what they get. There are still important things they do – a traditional publisher can edit, copy edit, design, market, promote, make your book better, deal with foreign sales.

With ebooks, though, publishers’ costs are less, so authors should get a better share. They do not have to produce, distribute or warehouse physical copies. Even on traditional books, publishers’ production costs have gone down but authors have not benefited from these costs savings. And, increasingly authors are being asked to do a lot of marketing and promotion themselves.

I appreciate that she’s probably talking mostly about major publishers, and I can’t speak for anyone else, but our contracts haven’t really changed, and our profits are down.

One thing that definitely hasn’t changed is that (like all publishers, outwith the vanity press) we pay all the upfront costs for every book we publish, and we take all of the risk.

Nicola is (I think) a solicitor. I have no idea what she earns in either private practice (if she’s in it) or as the head of the SoA (if she’s paid), but I do know that you can publish a really nice paperback book – say 5,000 copies, with a lovely jacket, with embossing and spot-UV, and a decent marketing campaign – for around £12,000.

I’m sure that Nicola has £12,000 to spare – and if not she could surely borrow it.

If publishing is so easy, and rapacious publishers are so shamelessly ripping off authors, it ought (one would think) to be a fairly simple matter for Nicola to start a publishing business that offers authors better contracts and takes less profit (when there is profit to take).

It doesn’t have to be massive – just one book, to start off with (it’s how we started).

Or am I missing something?


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FROM JANUARY 1, eBooks* (sold through Amazon and other third party sellers) will be charged at the prevailing UK rate, twenty per cent, as opposed to the just about current three per cent.

(Books-proper remain VAT free for crazy historical reasons associated with the idea that reading is a good thing, and it’s quite hard to see why eBooks don’t enjoy the same status; but perhaps that’s not an argument to raise.)

The three per cent, in the case of Amazon, was a bit of an anomaly based on its use of Luxembourg as the hub from which its digital sales are processed.

As far as I can tell – and it is not at all easy to tell – there will only be one effect on us, which is to make our eBooks more expensive.

Obviously, this is not something we welcome, and it will certainly hit sales, but it is not at all on the scale of the bureaucratic nightmare of forms and multi-territory VAT arrangements which awaits those publishers who sell their eBooks direct to customers.

It’s no exaggeration to say that it will be a nightmare of epic proportions, roughly akin to drowning in a vat of hot toffee and razor blades.

Wired covered it here a while ago, so I’ll leave it at that – other than to question what Osborne thinks he will achieve, other than to drive out of business lots of small publishers who rely on direct sales, to reduce the profits of those publishers who remain in business (and therefore the amount of corporation tax he can get his hands on, which to bribe us all before the next election), and to concentrate more power and cash in the hands of the big corporations.

*This doesn’t just affect eBooks – it affects pretty much every digital service bought via any digital supplier, including films, music, and games.

Happy New Year!

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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.

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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:

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