The Crisis in Book Publishing


FOR several months the trade book publishing business has been in the doldrums. Sales are somewhat down and costs very much up compared with two years ago, when about as many books could be sold as could be manufactured, and when government purchases for the Army and Navy were a substantial part of every trade book publisher’s business. For about three years, during World War II, the publication of new titles was of necessity radically reduced, and a good many of the older books had to be dropped by publishers because of governmental controls of the use of book paper and reduced manufacturing facilities caused by personnel shortages. Drastic steps were taken during that period to save paper and to save manufacturing costs. Books were made smaller and thinner, with narrower margins and fewer pages, to the point where, in the summer of 1945, all possible economies had been made, barring important technological improvements in the graphic arts industry.


By trade books I mean novels, biographies, historical works, cookbooks, books for children, as distinct from schoolbooks, law, medical, and technical. The trade book publishers of any country are, in a sense, the arbiters of its literary tastes. Collectively they decide what the general public shall read in book form. But for the encouragement they received from one or another trade book publisher in their early days as writers, some of the men and women rated at or near the top among twentieth-century American authors might well have abandoned writing and taken up other careers.

Soon after V-J Day, paper controls were removed and a good many publishers of trade books pulled out of their files plans for post-war expansion and assured themselves that in 1947 their sales would be larger than ever before if sufficient paper was available, and would be double their sales in 1941. Almost every publisher began commissioning young men of promise to write first novels; began competing through substantial offers of cash advances with other publishers for the memoirs of admirals, generals, and former members of cabinets here and abroad; began issuing the books under contract that he had had to postpone until the end of the war even though the manuscripts had been delivered; and more or less acted as if a book publishers’ millennium were close at hand. He might have seen that the signs pointed the other way, but the wish is often the parent of unwise enthusiasms. Each individual publisher thought, that autumn, that he had discovered — or soon would — several young novelists destined to become famous within a few years. Conservative business judgment gave way to editorial optimism.

That October, wage controls were lifted; and with the turn of the year the industry stopped paying excess profits taxes. With controls lifted, the cost of living began to rise; salaries and wages could be and were freely increased by book publishers; staffs depleted during the war were filled up and even expanded; and that thing called “overhead” began to mount rapidly, which of course was going to be all right if the publishers’ millennium was just around the corner.

Forty years ago this autumn, three months after I graduated from college, I went to work for a Boston publishing house at a salary of $6.00 a week, and I am still there. At that time more than half the employees were paid less than $15.00 a week. Today, the minimum wage in publishing houses is around $25.00, and a green secretary starts at $35.00. During these forty years the retail prices of new books have probably just about doubled, while the cost of living has risen at least half as much again.

There have been two major increases in wages paid in the graphic arts industry since the end of the Second World War, and there were lesser increases during the war. Take the case of typesetting. I know of a large plant in New England which in 1941 was charging to set type 90 cents a thousand ems. (The novel of average length is likely to have on each page something over a thousand ems.) Four increases during the war brought the price to $1.15 per thousand ems. Then, with the war over and with wage controls off, the price went to $1.30 in January, 1946; to $1.50 in March, 1946; and recently to $1.75. In other words, the price the publisher pays for composition has nearly doubled; wages in the plant have gone up 82 per cent during the same period; and in November, when the compositors will start getting forty hours’ pay at present rates for thirty-seven and one-half hours’ work, and time-and-a-half for any additional hours worked, the total hourly wage increase will be 100 per cent if the plant operates forty hours a week. Electro typers’ wages for making electrotype plates have increased almost as much. The fees paid jacket designers have increased drastically, and so have all the other items that enter into what is known as plant expense.

Paper, printing, folding, and binding prices have risen too, drastically, but with considerable variation. Royalties are a matter of individual contract, but the successful author normally gets 15 per cent of the retail price or 25 per cent of the publisher’s receipts. In theory, most trade book publishers plan to spend for advertising and promotion 10 per cent of the retail price of a new book for each copy sold during its first season, and sometimes for a longer period. But they cannot very well avoid overspending on the flops.

The publisher’s overhead used to be figured as 25 per cent or less of his total sales of his own editions of all his books, old or new; right now the publisher who keeps his overhead down to 30 per cent is the exception. Of course overhead includes the salaries and bonuses paid to top executives, and these vary with the different houses; but by and large the salaries and bonuses paid to the key people in the industry compare most unfavorably with those paid by magazines and newspapers of large circulation and by the motion picture industry. A major element to be considered in pricing books is the discount to dealers. Discounts have increased slightly during the past six years, but in the comparative figures that follow’ I will use the figure generally named as the current average, 43 per cent. The reader should have in mind, in all fairness, that discounts vary with quantity, that jobbers receive larger discounts than booksellers do, and that the average discount obtained by a small bookshop may be very little more than 40 per cent.


LET us take the case of a novel of 350 pages, with a paper wrapper or jacket printed in four colors, and suppose that 10,000 copies arc printed; 10 per cent of the list price is spent in advertising and promotion, and the author is paid a royalty of 15 per cent. In 1941 and 1945 it would have been priced at $2.50; today, probably $2.75 or $3.00, though at least one publisher would set a price of $3.50,

In 1941, with the retail price $2.50, the publisher’s outlay would have been, overhead not included, about: —

Plant $1100
Sheets 1160
Folding and binding 1860
Advertising and promotion 2500
Author’s royalty 3750
Total $9870

and his receipts would have been $14,250, leaving a gross profit of $4380 and, after allowing 25 per cent of receipts for overhead, a net profit of $818.

In 1945, for a novel of the same length, but made smaller and thinner, with the price still $2.50, the publisher’s outlay would have been somewhat higher than in 1941, and his gross profit, just a little more than enough to cover the overhead, except that in 1945, with sales booming, his overheads percentagewise were lower than in 1941.

Now let us look at the situation in the summer of 1947 in a case where the publisher, knowing how costs have risen but fearing a buyers’ strike, decides to make the retail price of a new 350-page novel $2.75, but to fix his appropriation for advertising at the same figure as if the price were $2.50. His expenditures are probably at least: —

Plant $1900
Sheets 1610
Folding and binding 2320
Advertising and 2500
Author’s royalty 4125
Total $12,455

His receipts will be $15,675, and his gross profit $3220 — which, after deducting overhead equal to 30 per cent of the receipts, will result in a net loss of nearly $1500.

Another publisher, who knows well that this is bound to happen, prices a similar novel at $3.50 and spends 35 cents a copy for advertising the printing of 10,000 copies. If, despite his higher price, he sells them all, his costs will be: —

Plant $1900
Sheets 1610
Folding and binding 2320
Advertising and 3500
Author’s royalty 5250
Total $14,580

to which we might add $300 which he spends to make a better-looking book because of the high price — for example, a two-color title page, decorative type headings for chapters, and gold-and-ink stamping on the cover. With expenses of $14,880 and receipts $19,950, his gross profit is $5070, which will not take care of a 30 per cent overhead.

It appears, therefore, that even if a novel of this length is priced at $3.50, the publisher cannot make a satisfactory net profit on a sale of 10,000 copies. But we must not overlook one possibility. If, when he is charging substantially higher prices for the ma jority of his books, his sales in number of volumes rather than number of dollars can be maintained instead of falling off, his business will increase to a point where his overhead percentage will shrink. But can this be expected to happen? I think not.

If it is not likely to happen, then the publisher, in order to secure a satisfactory net profit on his new novels, will have to price at $3.00 those now priced at $2.00, at $4.00 those now priced at $2.75, and at $5.00 those now priced at $3.00. and he will have to take more or less the same attitude about prices for books of nonfiction and books for children. I believe that the adoption of that policy would drive a large part of the reading public away from the bookstores. On the other hand, the price policy at present being followed by a good many publishers, which is to keep prices as low as they can, compels the publisher to depend for his profits entirely on the special income that comes to him — to be shared with the author — from book-club adoptions, royalties on the leasing of plates for cheap editions, and the revenue from the sale of other subsidiary rights; and in the long run this is unsound economically for the industry.

I have attempted to illustrate the situation on a novel of average length which has a better than average sale. It would be well, however, to view the present situation from the standpoint of the trade publisher’s entire sales of his books old and new but disregarding his profit from special income.

This year the company with which I am associated budgeted for sales about 50 per cent larger than its average for the years 1937-1941 inclusive, and for slightly larger sales than it secured in 1945 and 1946. In other words, although we set a sales budget which would break all records for the company, our expenses for plant, manufacture of books, royalty, advertising, overhead, and reserves indicated a profit from operations of less than one per cent of sales, so that even if the sales budget is met, which is far from certain, the company will depend for its profit from its trade department almost entirely on its special income. Most of my friends in the trade publishing business tell me that they are in the same boat; and unfortunately the special income is far from certain in its amount, and varies from year to year and with individual publishers.

The trade book publishing industry is a small one, but it is to the interest of authors in general, and of book clubs, magazines, and motion picture companies, that it be a healthy one. Such authors as A. J. Cronin, James Hilton, Kenneth Roberts, and John Steinbeck first gained fame through their books, and in most cases without benefit of book club until their reputations had been established. Many an author has had to write several books and find a publisher, and maybe a second and then a third, before he hit the jack pot. Sometimes the first publisher, seeing his promise, was patient until it became a reality. Book manufacturers will need a healthy trade book publishing industry when the current abnormally large demand for college texts, engendered by the educational program under the GI Bill of Rights, subsides as it surely will in two, three, or four years. The retail book trade needs a healthy trade book industry as much as publishers need a stable and efficient retail book trade. And finally, the reader whose literary tastes cannot be satisfied by just the current best-sellers needs them both.


Now I shall stick my neck out at the risk of offending a good many people with whom my company does business. First, the author. With retail prices up, and likely to rise dangerously from the standpoint of the consumer, lower royalties, by percentage, are in order, at least until the break-even point for the publisher is reached. It is not how much an author gets per copy sold, but how much he gets in all from the sale of his book, that is important. A good many literary agents, and some authors, already realize this. And the publisher would not spend so much for advertising—a good deal of it often wasted — but for his fear that even greater overspending by some other publisher will impress an author whom ho does not wish to lose.

Currently the book clubs are the bête noire of the booksellers. Book clubs compete with the retailers on a price comparison basis. There has been a steady increase in the price differential, chiefly because of book-club liberality in the matter of book dividends and the free book for joining. A good many dealers feel that the book clubs are driving them out of business. At the same time, because most of the selections of the largest clubs are bestsellers in the stores, the dealers put more effort into selling these titles than they do into backing up publisher enthusiasm for a good many other new books that have not received the book-club accolade and will not get its advertising. A more moderate price differential would somewhat brighten the state of mind of a good many booksellers, which is certainly one of extreme pessimism. Anyway, let the booksellers cheer up! They have plenty of problems, and the publishers want to help in their solution. But please, Mr. Bookseller, don’t let your worries stand in the way of your trying to sell all the good books you can.

As for the book manufacturers, probably the workers in the graphic arts industry were underpaid for their skills before the war and the manufacturers were not making an adequate profit, but let them beware now. I wonder how many of them realize the magnitude of the problems that are faced by the trade book publishers because of the prices they are now compelled to pay for their product. It is of paramount importance to the book industry that technological improvements be made as soon as possible, with lower costs the aim; but this will not happen for some time. Right now, in their own future interest, a good many book manufacturers would do WELL to reduce their prices even though it means smaller profits for them. Important publishing projects are dropping by the wayside, and it seems likely that in two or three years, if present costs continue, a good many book manufacturers will be seeking orders rather than, as now, accepting some with reluctance and turning down others.

The pricing policy which a majority of the leading trade book publishers seem to be following will be unsound unless they can maintain volume, avoid small printings w hich cost much more per unit than large ones, keep to a minimum the number of unprofitable books, spend less for advertising per dollar of sales, and pursue a watchdog policy on authors’ royalties and guarantees and on all the expense of operation known as overhead.

What perhaps is most disturbing about the present situation is that it lessens the chances of really promising young writers to get a hearing and is likely to limit seriously the publication of important and useful books, books of cultural value, ideological books, books relating to the peace for which we strive, which may be as vital as some of the books that dealt with the winning of the war — books that are unlikely to have large sales. The publisher’s break-even point is now certainly double what it was before the war. But far too many manuscripts that cannot qualify as important from the literary standpoint, but at the same time seem, to the publisher concerned, good enough merchandise to have a chance of producing a gross profit, are being accepted for publication. Far too many projects that turn out badly are being commissioned by publishers.

For a long time I have been a firm believer in birth control for books, and whenever I have Aveakened I have regretted it. Let me quote what I said in the Publisher s’ Weekly in 1931. “I believe certain books should be published even though they are sure to be unprofitable. But I believe that a great many unprofitable books that are second rate of their kind could be eliminated without much risk of a best-seller being lost, and that the consequent cutting down of publishers’ lists would improve the sales of the books they did publish. When a publisher is deciding about a manuscript let him say: ’Is it a book that on its merits, without consideration of HOW it will sell, I must publish because, although I am in business to make money, I have a duty as a publisher occasionally to try to do a service to literature? If not, is it first class of its kind?’” Strict adherence to this rule, turning down manuscripts that are accepted on the ground that “some other publisher will surely take it if we don’t,” would reduce the average publisher’s new book lists by 20 per cent and save him a lot of money.

And now just a word to the reader. First, publishers of trade books are not profiteers. They find their work fascinating, but they do not expect to get rich on it. Second, while a few books have very large sales, don’t forget that, a majority of the new books never attain a sale of 10,000 copies. Not many authors earn substantial incomes from their book royalties. Third, even though you select your books by studying the best-seller lists, please do read the book reviews and browse in your bookshop. Intelligent readers rarely have identical tastes. Finally, if you regard books as a necessity rather than as a luxury, — and I believe that most of the readers of the Atlantic Monthly do so regard them, —your budget for book purchases should be up just as your food bills are.