“Publishing exists in a continual state of forecasting its own demise; at one major house, there is a running joke that the second book published on the Gutenberg press was about the death of the publishing business.”
This is from a must-read article by Ken Auletta about the iPad in April 26th issue of The New Yorker. It includes numbers that follow the money in publishing as it migrates to the Web. They also provide a perspective on the business and where it’s going:
* Six publishers produce 60% of books sold.
* 70% of the 100,00 books that industry produces a year don’t earn back their advances.
*On a $26 book, authors receive $3.90 in royalties, 15% of list price on a hardcover book. Publishers make a $1 profit.
* More than 50% of revenue at Random House comes from backlist books.
* Since 1999, the number of independent bookstores declined from 3,250 to 1,400.
(On the other hand, the San Francisco Bay Guardian just gave a Chain Alternative Award to the Northern California Independent Booksellers Association, which has two new members this year.)
* Independents have 10% of sales, chains about 30%, big-box stores like Wal Mart, 45%, which pressures big houses, like Hollywood studios, to produce blockbusters.
* Publishers have to run two businesses at once: a traditional publishing business and an electronic business.
* Marcus Dohle, the Chairman and CEO of Random, said “The digital transition will take five to seven years.”
* There are 50,000,000 iPhones in the world, which O’Reilly Media vice-president Andrew Savikas calls “a great customer base” for book apps.
* Most publishers are giving a 25% royalty on e-books.
* Amazon’s 3,000,000 Kindles generate 80% of e-book sales, which Amazon achieved, in part, by selling at a loss.
* When Amazon customer can choose between a paperback and an e-book, 40% of them choose the e-book.
* Kindles users buy 3.1 as many books as they did twelve months ago.
* An Apple adviser who used Netflix to download movies compared bookstores to video stores ten years ago.
* Three behemoths–Apple, Amazon, and Google–are competing, so one of them can’t dictate terms.
* Author Solutions works with 90,000 authors.
What these numbers suggest is that publishing is going through a transformation. Old and new media companies will in time establish a business model that works for them and makes money for writers.
What these numbers can’t capture is the article’s engaging, rough-and-tumble portrait of predators at play or the importance of
* publishers in discovering and developing new authors
* independent bookstores in launching them
* writers who keep the whole enterprise afloat by sitting in front of their computers creating the art that makes commerce possible
Former Random House editorial director Jason Epstein said: “When I went to work for Random Houe, ten editors ran it. We had a sales manager and sales reps. We had a bookkeeper and a publicist and a president. It was hugely successful. We didn’t need eighteen layers of executives. Digitization makes that possible again, and inevitable.”
Author Lee Foster says “This will be a golden age for content creators.” You will create your future as a writer with your head, your heart, and your fingertips. Three cheers for content, whatever form it takes!