I talked with two very different aspiring publishers in the last 24 hours, both of whom had committed serious time and resources to preparing to launch their own publishing houses. Both were considering using print on demand (specifically Lighting Source) in their business, but the similarity ended there. To put it as simply as possible, one had a business plan, the other just had an idea. I don't mean that the idea man hadn't done a lot of work, in some senses, he was further along the path to publication, but he was shooting from the hip and throwing around money without having figured out exactly what the business would be.
People have different reasons for starting their own publishing house. Some have written a book they can't get published by a trade, but are sufficiently entrepreneurial to ignore the subsidy press route. Some genuinely want to create and grow a publishing house, whether self publishing or otherwise, and some just chose publishing as a business venture. I'm not sure what attracts non-writers to publishing, it's a tough enough business to get into even as an author, and the competition amongst publishing houses is cut-throat. One factor that has to be considered in any model for a new publishing house is whether it can stand competition from the big boys. If you compete in a small pond, competition from the major NY trades isn't a major issue, but if you are launching a new genre with a "wow" effect, you better believe that as soon as it shows up on the radar, some heavy-hitting publishers will rip-off your idea and completely change the economics of your business model.
That's where having a business plan comes in. If you want to start a publishing house as a self published author who knows how to promote books, you can do your business plan on the back of a napkin. However, if you're going for a big launch, publicity, offset print runs, major start up expenses, you better write a business plan that allows for the contingency of competition. Just think about the 10,000 plus books Barnes & Noble publishes for their own stores. Keep in mind that the book industry can usually have several titles about famous people who pass away on the shelves within two weeks of their deaths, so you can't count on having an open field to run in for more than a few months after your big idea hits the shelves.
You don't need a degree in accounting or business administration to write up a business plan for a publishing house, but you can't wave your hands at the basics, like how much it costs to print the specific books you want to sell, what cover price your market will be willing to pay, and how much of that cover price you will end up in your bank account. You can't even start doing this basic math without knowing how many pages the books will be, whether they need to be softcover, hardcover, or both, and whether you'll be paying for design services or doing the whole thing in house. That might sound obvious, but the gentleman with the big idea from yesterday was far from being the first aspiring publisher I've spoken with who had thought that these were minor considerations that would work themselves out.
I'm fond of saying that the publishing business is all about marketing, and it's certainly true that books don't sell themselves. However, there's a caveat to the idea that anybody who can market books can start their own publishing house, and it's that you need a business plan in place that will allow you to make a profit on the books you sell. Otherwise, you'll be wasting your marketing genius on reducing your net value. I once wrote something to the effect that anybody can get customers for $20 bills if he's willing to sell them for $19, and it's as true in the publishing business as any other. Selling books is all about marketing but starting a publishing house is all about business. I'm always happy to respond to educated questions (don't ask me to do your homework), but write a business plan first and ask me about the parts you can't fill in. If you essentially ask me to write a business plan for you, I'll probably just end up convincing you that you're in the wrong business:-)
Starting Your Own Publishing House
Online Publishing and E-Publishing
So, who cares about putting labels on things? I do, it's impossible to have an intelligent discussion without a common vocabulary. I've engaged in both online publishing and e-publishing over the years, and though I try to use the two in a complimentary manner, many publishers go whole hog on one or the other. I've been publishing online since 1995, and I actually started with the hopes of building a readership for fiction I'd been writing. As it became clear that the fiction wasn't going to pay the bills, I started paying attention to the traffic my site was getting for some off-the-top-of-my-head technical support documents I'd written. For the next ten years I continued publishing online without directly earning a dime. Was it selfless altruism?
Nope, it was good marketing. I didn't like the online revenue models that existed at the time (mainly banner ads) and didn't want to junk up my site for pennies a day, so I stuck with conventional publishing as a trade author and as a self publisher, and used my online publishing to promote my books. It wasn't an exact match since I did quite a bit of writing about subjects I never authored a book about, but writing gets to be a habit and you never know what might develop. Since that time, contextual advertising programs such as Google Adsense have given publishers a civilized way to earn some money from online publishing, but it remains a secondary objective for my publishing business.
E-publishing held a serious attraction for me early on because it promised to level the field for small publishers. E-publishing almost entirely eliminates production and inventory costs, though my first CD burner, purchased back in the early 90's, cost me almost $2,000. Unfortunately, the entire e-publishing industry based on CD media was quickly overwhelmed with shovelware, CD's stuffed with whatever royalty free garbage the publisher could find. In the end, publishing on CD (excluding software) was largely given over to professional subscriptions and niche products.
A few years later, the Internet exploded out of the academic and military environments and into the home, and e-publishing was given a new life. I attended an e-book conference put on by the National Institute of Standards in 2000, certain that this would be the new direction for my publishing business. After three days in D.C., it became clear that the industry leaders were no closer to agreeing on standards than our political leaders were to agreeing on policy, and I put e-publishing on the back burner. I still remember that one of the big names at the conference was an e-publisher named "MightyWords" who focused on mid-length documents for professionals and businesses. A year or so later they were purchased by Barnes&Noble.com. A year or so after that, Barnes&Noble.com got out of the e-publishing business entirely, and even closed their e-book store.
I finally started e-publishing for profit last year when I signed up with Lightning Source to distribute e-book versions of my print books. Since that time, it's reliably added about $500 / month to the bottom line, and given overseas customers an inexpensive way to purchase my books. I haven't seen any year-over-year increase in my e-publishing sales, which take as an indication that the e-book industry is growing due to title growth, rather than unit growth per title.
Barnes and Noble Book Store vs Amazon Stocking
I've spent some time over the past month looking into comparisons between Barnes & Noble book stores and Amazon in terms of their core stocking. In the brick-and-mortar book store world, title stocking is also known as "modeling." To use it in a sentence, Barnes & Noble models two copies of title X across the chain, meaning the computerized ordering model tries to keep two copies in inventory every physical location. I've never heard modeling used in conjunction with Amazon's predictive ordering system, but they obviously strive to stock titles that are selling well for 24 hour shipping, and do a pretty good job at it.
What got me thinking about the differences between their title offerings is a discussion I've been involved with about the Long Tail phenomena on Amazon. It seems to me that before you can really get into a discussion about the tail on a beast, you have to decide what the beast is. For the sake of comparing apples with apples, it would be wonderful if Barnes & Noble book stores stocked a subset of Amazon's title catalog that corresponded with the top 100,000 or so books. Unfortunately, that's not the case. Stocking at Barnes & Noble book stores varies with the size of the store, between 60,000 and 200,000 titles, "of which 50,000 are common to all stores." However, we have no way of knowing what percentage of the 50,000 common titles are books published by Barnes & Noble themselves.
Now the situation is further complicated by the fact that Amazon does not stock many of the current titles published by Barnes & Noble in their store, and many of those titles that they do list were added by Marketplace Vendors. Some of these titles actually sell quite well in Barnes & Noble book stores, the "Step by Step" color illustrated computer series comes to mind. Even when some these books are made available on Amazon, they don't end up in the body of the beast due to limited availability.
On the other hand, there are many new titles stocked for 24 hour shipping and selling in the top 100,000 at Amazon which aren't stocked in Barnes & Noble book stores (and often never were). In addition, Amazon has a large but unquantified number of out-of-print books selling in the top 100,000, either older editions of new books, titles from failed publishers, or titles whose sales didn't justify a new print run for the publisher, and for which all the demand is now through Amazon.
This leaves us with two beasts, and I'm not really sure how different they are. Their bodies are certainly similar enough to be recognizable, especially the head (say the top 1,000 or so titles), but after that, some titles modeled in every Barnes & Noble book store only appear in the Long Tail at Amazon, if they catalog them at all. By the same token, some of the titles in the body of the beast at Amazon can't even be ordered by physical Barnes & Noble book stores because they are out-of-print. If I had a way of quantifying how big these non-overlapping inventories were, I could venture a comment on how important they are to the overall Long Tail picture, but aside from asserting that they are positive percentage values, I don't have a good method for estimating them.