The Healthy Profits of Traditional Publishers [Smart Set]

Smart Set

Welcome to the weekly The Smart Set, where I curate new smart reads about the publishing and media industry. I also point to issues and questions raised, and welcome you to respond or ask your own questions in the comments.

“To seek: to embrace the questions, be wary of answers.”

—Terry Tempest Williams


How Much Money the Biggest Publishers Actually Make by Digital Book World

The Publishers Marketplace 5-Publisher Index: Sales and Operating Earnings, 2006–2013

The Publishers Marketplace 5-Publisher Index: Sales and Operating Earnings, 2006–2013

Publishers Lunch/Marketplace recently graphed the last eight years’ worth of earnings from the Big Five publishers. For all the talk of traditional publishing on its way to the grave—or threatened by self-publishing—their profit earnings (and margin) are on the rise: at 10.7% in 2013. As Digital Book World points out: “By comparison, last year Barnes & Noble had a net profit margin of -2.3% and Amazon had a net profit margin of 0.37%.”

Thoughts & questions:

  • As Digital Book World points out, the rise of ebooks helped publishers maintain their sales level but increase profits, in part due to a lower author royalty. The close of Borders actually helped publishers’ profits due to a lower return rate.
  • Hachette is one of the Big Five and now engaged in a well-publicized dispute with Amazon over terms. Many authors (and others) have called Amazon a bully; some have argued the Amazon-Hachette dispute is a moral issue and that—if Amazon triumphs in its dispute—it may hurt the future of quality books and author livelihoods. True?

Hachette Reveals Amazon Digital Sales Share by Lisa Campbell

Many news sites were sharing information from a recent investor day presentation by Hachette, which reveals that Amazon has a 78% market share of Hachette ebook titles in the UK and a 60% share in the US.

The other retailer percentage shares in the US:

  • Barnes & Noble: 19% share
  • Apple iBooks: 13% share
  • Kobo and Google share 8% of the pie

Thoughts & questions:

  • Based on anecdotal evidence and industry presentations I’ve seen, these percentages match most people’s guesses or assumptions of the overall ebook market share by retailer.
  • Most argue that Amazon’s share will start increasing due to lack of competition. Check out this piece by Jane Litte from earlier this year, about whether competitors have effectively ceded the market to Amazon.

Self-Publishing Boom Lifts Sales By 79% in a Year by Alison Flood

This is a report on the UK, not the US. I’m not as interested in the 79% figure as I am in the following estimate: self-published books account for 5% of the total units bought, and 3% of the dollars spent last year in the UK on books.

Thoughts & questions:

  • Those who follow AuthorEarnings would be quick to point out that Nielsen only tracks books with ISBNs, which doesn’t include many thousands of self-published titles. AuthorEarnings reports that self-published titles are closer to one-quarter of unit sales—within specific genres.
  • If comparing the health of traditional publishing with the boom in self-publishing, one might reasonably conclude we’re not playing a zero-sum game. In other words: if self-publishing wins, that doesn’t mean traditional publishing loses, and vice versa.
Share this
Posted in Smart Set.

Jane Friedman (@JaneFriedman) has 20 years of experience in the publishing industry, with expertise in digital media strategy for authors and publishers. She is the publisher of The Hot Sheet, the essential newsletter on the publishing industry for authors, and was named Publishing Commentator of the Year by Digital Book World in 2019.

In addition to being a columnist for Publishers Weekly, Jane is a professor with The Great Courses, which released her 24-lecture series, How to Publish Your Book. Her book for creative writers, The Business of Being a Writer (University of Chicago Press), received a starred review from Library Journal.

Jane speaks regularly at conferences and industry events such as BookExpo America, Digital Book World, and the AWP Conference, and has served on panels with the National Endowment for the Arts and the Creative Work Fund. Find out more.

Subscribe
Notify of
guest

This site uses Akismet to reduce spam. Learn how your comment data is processed.

9 Comments
oldest
newest most voted
Inline Feedbacks
View all comments