Comparative Profitability 26th August 2010.

That is a pretentious title, two long words. Unfortunately it’s a shorthand version of one of the deep truths behind publishing.

When we contract a manuscript we do so in, to deliberately misquote a phrase “in the sure and certain hope” that it will make a profit. We will cover the costs incurred in editing, formatting, marketing, and uploading a book, as well as producing a cover.

That is actually exactly what it is, a “sure and certain hope” – when we look at a book’s possible market and our ability to market it, we do so hoping that it will make a profit. The same decision is made by every other publisher out there.
The problem is, like every other publisher the world over, we know it is precisely that, a hope, not a guaranteed return. If you want a guaranteed return put your money in the bank and put your feet up. Publishing is a business and like all businesses it involves taking a risk. You take every possible professional step to minimise that risk, but in the end you can only minimise it.

We hope that every book we publish will turn a profit, or at the very least cover its direct costs even if it doesn’t make any more of a contribution that that, although obviously such a contribution would be very welcome from every book – we do have fixed costs to pay out. Not least among them of course, the accountants.

The sad fact is not every book does turn a profit; in fact the majority of books fail to make their break-even sales. Even in the e-book world, some books just don’t seem to hit the market, they sink without a trace. We even have a couple of e-books that haven’t sold a single copy, and one it took a year before it sold its only copy. Thankfully these are very much the minority.

That may be down to price, it might be a bad cover, it might be a bad blurb, it might even be nothing other than the fact that on one web site the first person to rate the book gives it a “poor” rating, or a bad review. There are all sorts of factors, some we, as publishers can address, but some are beyond our control.
For every group of “bombers” though, there is somewhere a “fighter” – a book that outstrips all sales expectations and sells well above its own break-even point, subsidising the others...

So there you have it – the deep dark secret of publishing. We start with hope, then descend through trust into risk and finally from there into subsidy. That’s right, even the biggest publishers in the world operate on one principle of subsidisation, at least.