[As we continue our “Does Literary Fiction Suffer from Dysfunctional Pricing?” discussion, Mary is taking us through our third year with a hypothetical publishing company].
Although the general tone of yesterday’s post might have indicated that a 10% year was a disappointment, I assure you that Simon Collins & Random Day’s board of directors were pleased. We were just coming down from our high of Season One’s 30% profit. But, a profit is a profit and we shouldn’t sound unhappy about operating in the black. Now it’s time to dig into season three.
Get ready for some big news, books fans. We’ve got two seasons under our belt and have learned a few things about the publishing industry. SC&RD has been doing well and word has spread about our profitable publishing program. As is often the case, though, our shareholders have been clamoring for higher returns. In response, our acquisitions editors have spent the preseason scouting for talent and signed a few big names for our next frontlist catalog.
Making a Killing at Thrilling
SC&RD scored a huge hit when we found debut author Lindsay Patterson Grisham. Being an unknown, we picked up her first novel for a song and it turned into a runaway bestseller. The story follows a washed up Triple-A shortstop as he is lured into a web of deception and danger when his brilliant and beautiful scientist wife is left at death’s door after a horrifying attack. Marketing helped knock this one into the lights by giving away giant foam fingers promoting the book. We knew it would be big when we saw every agent and bookseller wearing them while wandering through the aisles at Books Exposed America. The stats:
- $25,000 advance
- 1,000,000 units printed
- 95% of inventory sold
- $7,621,106.67 net profit
Another smash happened after we lured an MVP away from Harper Schuster House. Rumor had it that F. Clive Follett-Cornwell was unhappy about the author photo they used on his blockbusting Interlude for a Murderous Symphony (Repairman Alex Plum Series #72). Apparently, his eyebrows weren’t furrowed enough, so we offered him a huge advance and a celebrity photo shoot. Oh, happy day:
- $500,000 advance
- 750,000 units printed
- 90% of inventory sold
- $4,268468.33 net profit
Losing Literary Fiction
Although our thrillers did exceptionally well this season, literary fiction fell short of expectations. It all started when a bidding war broke out for Jonathan Frazier Ford. The acquisitions editor convinced our entire office of his literary prize potential, so we placed a huge bet on him. Turns out, his horse didn’t run as his novel received mediocre press and negative stars from nearly every amateur reviewer on Amazoo. Not all hope is lost, though. Marketing is working on a plan to repurpose unsold inventory as doorstops to use as a tie-in for the next Lindsay Patterson Grisham novel about a Manhattan doorman on a killing rampage. The sad truth:
- $500,000 advance
- 386,400 units printed
- 25% of inventory sold
- $1,605,159.02 net loss
More bad news, books fans. SC&RD thought our list would gain some respect from the literati by signing seasoned author Alice Upjohn Oates. She put the literary into fiction nearly 30 years ago when she wrote We Were the Thirteen Suns, but we should have known something was up when she didn’t blink at the modest advance we offered. Some of us scratched our heads when she delivered a manuscript consisting of the word “dog” 25,000 times, followed by 25,000 repeats of “god”, and ending with “Thus, the sun set.” The acquisitions editor was convinced her experimental novel would find an audience, but it turned into a fiasco when we were sued for copyright infringement by some blogger in Terre Haute. Eh:
- $50,000 advance
- 41,400 units printed
- 15% of inventory sold
- $214,915.00 net loss
A Tale of Two Product Lines
Since our thrillers and literary fiction had the most impact on the bottom line, we set up today’s big spreadsheet to compare them. Besides the above winners and losers, the rest of our frontlist experienced a typical year. Some were very profitable, some were very unprofitable, while the rest broke close to even or lost money. Without further adieu…
Hmmm. A few significant numbers bear repeating:
Thriller (all titles): $13,049,880.34 net profit (33% profit margin)
Literary Fiction (all titles): $725,665.36 net loss (-10% profit margin)
Both Product Lines: $12,324,214.98 net profit (26% profit margin)
In the end, SC&RD still managed to make money despite so many red numbers.
Although we are running a fantasy publisher, don’t forget that our financials have been based on real industry averages. When a book sells well, the sky’s the limit because there isn’t a ceiling on profits. But when a book is a dud, losses end at the initial investment. In the meantime, we can take our earnings from bestsellers and invest them in chasing the next big hit. Lather. Rinse. Repeat. One winner can help carry the company through the next season, but a whole lineup of losers will bury it.
It’s the bottom of the ninth, books fans, and the last out looms. I’d like to thank Levi for the soapbox and the entire LitKicks audience for playing along. For my part, I had a lot of fun building Simon Collins & Random Day, and I hope everyone found this exercise to be both amusing and educational. Steeeeeeerike three!
And LitKicks says thanks right back to Mary for a very entertaining and educational three-day adventure. For those of you who’d like to keep enjoying her wit and wisdom, check Bookblog.net regularly.
Whither our book pricing discussion? We’ll break for the weekend and gather next Monday to begin the “closing statements”. We’re definitely near the end. — Levi Asher