The ugly if not predatory mechanics and economics of the just-renamed Harlequin Horizons imprint bring to mind a question I’ve had about the book business for some time….
Over the past few months I’ve read post after post from apparently knowledgeable sources such as agents, editors and publishers — people who’ve been in the publishing business for years — speaking to the issue of publishing costs. Here’s a recent example:
Packaging (cover design & production): $5,000
Typeset & Interior layouts: $3,000
Printing & binding: $18,000
Author royalty (a typical advance is calculated in this model): $25,000
Leaving out the royalty issue, all these numbers seem to jibe (loosely) with other numbers I’ve seen — as if this is pretty much the going rate. What I’ve yet to see, however, is how much profit there is built into these rates. What does it really cost the publishing industry to provide these services?
The reason I ask is that I keep looking at numbers like the packaging cost of $5K quoted above, and my mind keeps saying: Wait a minute…. What does that $5,000 cover? Assuming a publisher already has someone on staff who’s done this kind of thing dozens (if not hundreds) of times, what’s the real cost of the service? Between computers, digital cameras and image-editing software, I think I could buy everything I needed to make just about any cover design imaginable and still have several thousand dollars left over. And that’s just for one book. Spread the tech costs over multiple books and the per-book cost for packaging seems to plummet.
Now, obviously I have no idea what I’m talking about. Maybe there are normal, necessary tech costs I know nothing about. And maybe the best cover designers charge $500 an hour. And I’m sure there are all sorts of legitimate miscellaneous expenses that add up, as they do on any project.
And yet…I still wonder how much of the $5,000 cost of packaging is a usual-and-customary charge that has little or nothing to do with actual costs and everything to do with an established and entrenched business model that had (until recently) few if any real competitors. I mean, I know the record industry is awful in the way it cheats musicians, and the publishing business is less awful in comparison, but I find it really, really, reeeeeeeeeeeeeeally hard to imagine that publishers have never pushed the envelope to see what they could get away with in overcharging authors — and then stayed at that limit.
Which brings me to the Harlequin scam, the internet, self-publishing for the masses, and how price pressure might force publishers to take a fresh look at the rates they charge for services. Because unless I’m missing the whole point of the self-publishing movement, it’s about how the price of getting a message out went from whatever publishers could charge to whatever your ISP charges for a year of hosting. As in a hundred bucks.
From where I sit, that’s the new publishing price floor. (No, this says nothing about profits, but that’s a red herring in this discussion. Publishers aren’t charging against their expected profits, they’re charging against their costs plus whatever mark-up they think they can get away with.) Everything added on to this floor price now needs to provide some service or advantage or return on investment. Yes, the more ‘professional’ you want your end product, the more you’re probably going to have to learn and/or spend. But that’s a judgment call you get to make.
Publishers can of course argue that all of their packaging is inherently professional, and that’s a valid point. But it’s also valid to point out that I’ve seen more than one hideously, ghastly book cover that was produced by the professionals at publishing houses. (To say nothing of the myriad ways publishers might use a cover design to mislead consumers about the contents of a book, or how publishers can simply force authors to accept cover designs that some authors find objectionable.)
Point being: nobody ever talks about what it really costs to do all these jobs that everyone seems to know the cost of. Which makes me wonder how all that conventional wisdom and industry knowledge is going to hold up as the internet lava flow continues to melt the calcified publishing industry brick by brick.
— Mark Barrett
Kassia Krozser says
Mark — I just want to add additional thoughts to your figures. Every publisher I know says margins are extremely thin (single digit percentage points), though getting specifics is hard. And I understand the need to pretend to keep the competition in the dark. You also need to include overhead, which includes staffing (salary, benefits, etc), rent, equipment, electricity/utilities, and all those other pesky things that go into running a business.
In your cover design example, I’d also add in things like the actual physical cover. Cost of paper, cost of color, extras like foil or stepbacks. And so on.
I have no idea if the numbers you’ve quote are high, low, or just right because there are so may variables. Every house is different. The costs for a digital only publisher, for example, would be far lower. A textbook publisher would be much higher. And so on.
I’m sure margins are thin, but they’re probably not thin everywhere. (And I’m not sure I would say that something like an 8% margin is ‘thin’, but that’s nagging your point.) In any case I’m not trying to make the case that publishing is like defense contract work — where you submit a $42,000 invoice for a wrench and expect to get paid for it twice, plus kickbacks.
My interest is primarily about the difference between what it costs to do X the traditional/mainstream way, and what it costs (in time, money and quality) to do X yourself, or using sub-contractors. My expectation — and this may be wrong — is that it will be cheaper to do many of these things yourself, in part because you’re not going to have any mysterious padding.
One big advantage, obviously, is that an individual’s costs don’t need to take (much) overhead into account. That’s a tremendous burden for the publishing industry to have to deal with right now. Pressure to cut staff/payroll is going to be horrendous over the next few years.
On the point of physical costs, I wasn’t sure if cover costs included the actual production of the cover itself, or just the design. Clearly the cover is a different object in terms of composition (from the pages), so that makes sense. Then again, the costs I see cited are not per-x-copies, which you would think they would have to be if the costs of the copy were a factor. I.e., a flat rate for the design, but then a per-copy cost (by the thousands, say) for materials, etc. (Which is my way of saying I’m still confused.)
In the end, I’m still interested in the cost floor for an individual, and how that relates to each step up the publishing ladder, from self-pub to POD costs to full-blown publishing house costs. I’m also interested how all this price competition will affect these prices in the future. It’s hard to imagine that things will get more expensive, except perhaps in artisanal works.
Debbie Stier says
I agree with what Kassia says. Also, it’s a parts and labor question. I bet the parts aren’t necessarily that expensive, but HOPEFULLY you are paying with someone who is gifted in whatever area you are paying for (jacket design, editorial, etc.) plus their experience. And that’s not to say that there aren’t less experienced very talented people who could/would do it for less. I’m sure there are. But I’d think some part of that cost is for someone’s time — and hopefully (though not presumably), their time is valuable.
I believe the average cover designer gets about $1000-$1500 per jacket. That could take many designs — or maybe they nail it first shot.
If I’m understanding you, it seems like you’re saying the design isn’t done in-house, but rather is done by an outside designer. Is that right? I think I imagined that a big publishing house would have enough business to keep a cover designer (or two, or five) busy full-time, but maybe that’s wrong.
If the cost is for contracted services, then yes, the total quoted in my post ($5K) seems to make more sense. I once had a web site designed for me pre-blogware (by about a year — just shoot me), and when all was said and done the bulk of the costs had gone into the site logo and artwork. Most of the functionality was boilerplate, and the little but of customizing I needed was taken care of in short order with some custom code.
Which raises another question: how much of what a publishing house provides and charges for is done in-house these days, and how much is done as sub-contracted work? Because if publishers are already out-sourcing a considerable part of the book-making part of the business, they may be in a better position to make the digital transition than they otherwise might have been.