People are shocked by these publishing stats (but shouldn't be)
This shouldn't be a bombshell if you think of writing books as a creative endeavor.
For the 99.9% of people not chronically online, there’s been a heated debate recently about the current and future state of book publishing. The kerfuffle began with a substack post hyperbolically titled “No one buys books,” which generated many many many many responses. As someone who worked in publishing for only a few years for a tiny book publisher almost a decade ago, I felt compelled to chime in. The world needs my voice!
In all seriousness, I do think I can offer some insights into the dynamics described in the controversial substack post, especially since many of those dynamics were in play a decade ago (and had been for some time).
Here are some stats highlighted in the piece, taken from the recent DOJ antitrust case blocking Penguin Random House’s proposed acquisition of Simon & Schuster:
90% of books sold fewer than 2,000 copies.
Only 2% of all titles earn an advance over $250,000.
Books that earn advances over $250,000 account for 70% of advance spending by publishing houses.
85% of the books with advances of $250,000 and up never earn out their advance.
According to the Penguin Random House CEO, less than 45% of books with a million-dollar advance end up on the thousand bestseller list.
Out of every 100 books sold, only 35 are profitable.
These stats are eye-opening, sure, but less so if you’ve spent any time working in publishing. This was the reality of book publishing in the early 2010s when I worked in the industry.
Author Advances
For background, advances are what the book publisher pays the author upfront (or in advance) of their book being published. The author must earn out their advance before seeing any royalties, meaning the total of their share of book sales must be equal to the advance before they get those earnings.
As the controversial piece notes, very few authors are making large advances. A slightly higher number of authors might be able to make any kind of living off publishing a book. For most authors, the earnings are paltry.
When I worked for a small publisher, the advances we gave our authors ranged from about $2,000 - $7,000. That’s for several months of writing (at least), a few more months of editing and then a few more months of active publicity work. What most people make in one month, these authors were making for a year-plus of work.
While some of our authors were first-timers, others had already published several books—even with much larger publishers. No one in this situation is getting rich off book publishing. For many of our authors, this was a supplemental—not a primary—source of income. Their day jobs were speakers, pastors, non-profit leaders or any number of other professions.
Granted, we were probably on the far end of the spectrum when it came to book advances, with publishing behemoths like Random House on the other end. But far more authors across the industry were probably making four-figure advances compared to five- or six-figure advances.
This shouldn’t be shocking
These stats about the overwhelming number of books selling relatively few copies and a handful of big-name authors making large advances shouldn’t be surprising—if you think of book publishing as a creative endeavor like music, entertainment or other art.
Even though tens of thousands of Americans list “actor” as their profession, only a small number are able to make a stable living as a working actor. And only a rare few are able to make it big—they can all fit into the first several rows of seats at the Oscars.
Yes, “tortured poet” Taylor Swift is a billionaire, but the vast number of musicians are “starving artists” barely getting by. Thousands of bands are formed each year in garages across America and very few will see commercial success. There are millions of albums on Spotify and Apple Music but last year only 11 albums went either Gold (500,000+) or Platinum (1 million+). Only 29 albums in history have sold more than 15 million copies.
These stats do not in any way mean “No One Watches Movies or Plays” or that “No One Is Listening to Music.” These stats just demonstrate the brutal economics of any creative endeavor.
Book publishing has had a rough several years thanks to the digital disruption, Amazon’s dominance, and other economic forces. But people still read books—more than a billion were sold last year. And as long as people want to read books, there will be a reason to continue publishing books.
The less discussed, hidden profit stream in books are self-published Kindle books at 70% royalty can not only scale over time but with a back list of 5-6 books and continued PR…generate a middle class income most traditional authors never see. Once you boost unit profitability, niche audiences become profitable for authors who take on the publisher’s role.