The perils of publishing

E
VERY BOOK PUBLISHED
is a new product, so
publishers have to keep on finding, developing,
perfecting and releasing new products. New
products are inherently risky. No one knows in
advance how many copies will be sold or whether
the readers will like it. It costs money to get the
new product known to the public. So publishers
are gambling large sums of money with every
book they bring out.
Compare this to other industries, such as
producers of food or drink. They can rely on sales
of the same product for decades. Customers will
buy the same beer, orange juice, bread or
chocolate all of their lives. But no one (in their
right mind) buys the same book more than once,
and certainly not every week for sixty years.
Publishing is a tough business, but it does have
its rewards. After years of struggling, a publisher
can release a surprise bestseller and its profits
can go through the roof. But this success
brings its own problems. Firstly, there is the
disappointment that comes the following year
when there is no bestseller and the company’s
income drops back down again. Secondly, if extra
staff and financial commitments are taken on
during a period of success, this can act like a lead
lifebelt when that run of success is over. No
books remain in the bestseller charts forever, and
no one can guarantee to publish books that will
duplicate the success of previous winners.
The cashflow of a publishing business is
challenging at the best of times. Almost three
quarters of all book sales occur in the run-up to
Christmas. Therefore during most of the year a
publisher’s income is limited. When an author
is paid an advance on royalties, that money comes
out of the publisher’s pocket up to two years
before any income is received from sales of that
book. If too many expensive authors are signed
up in quick succession, the negative effect on the
publisher’s cashflow can be devastating.