Is the Price Right?

Liz Attenborough, Publishing Director of Puffin, reveals the economics of publishing.

Is there any likelihood that children’s book prices will come down?

Are BfK reviewers right to criticize those prices as if publishers are wilfully hiking prices up for their own greedy purposes?

My answer to both questions has to be no. The prices are not going to come down and, whilst reviewers should of course comment on prices in relation to their opinions of a book’s total worth, it is pointless to speak as if the price has been fixed arbitrarily and a figure plucked out of the air for no particular reason.

Publishers are all too painfully aware of the difficulties faced by teachers, librarians and parents with limited budgets and increasing prices. After all, publishers want to sell as many hooks as possible. Perhaps I can explain a few points from a trade publisher’s point of view. (I am not dealing with non-net text books here.)

A book’s cover price can be divided into its various constituents (see diagram). As can be seen immediately, the money from the sales of a book is accounted for in a number of ways. The average discount claimed by the bookseller, or library supplier, to pay their own costs and expenses is the most substantial part and this is a figure which booksellers, in particular the chains, are constantly trying to increase. The publisher takes the initial financial risk, and if copies of books are returned from customers, it is the publisher who bears the cost.

Another major factor in the pricing of a book is the size of the print run. In common with the manufacture of any mass produced consumer goods, books carry both a fixed cost and a running cost. In the case of books, fixed costs are referred to as origination costs and principally are the one-off costs such as typesetting, artist’s fees, the colour separation of illustrations (a complex and costly procedure), and the production of the printing plates or film. All these costs have only to be borne once. Running costs are those which vary depending on the number of copies printed and include paper and royalties.

It is the origination or fixed costs of producing a book which have the most bearing on the current concerns. The more copies of a book that are printed in a run, the lower the share of the origination cost that each individual book has to carry. For example, a typical paperback novel may cost approximately 35p to print when the total is 15,000 copies, but more than 70p when that print run is reduced to 7,000 copies. Full colour books work on a much higher origination cost, of course, and that is where British publishers’ skills at securing overseas co-editions come in, to spread that origination cost over longer print runs by including foreign language or American printings. By no means every picture book benefits from this, and a large percentage have their full cost borne by the UK edition alone.

In the long ago days when sales of hardbacks were substantially more than they are today, the price of a hardback was sufficient to cover all the origination and the storage costs of a long printing. A paperback was thus simply a reprint and bore none of the origination costs. This, combined with the fact that the paperback publisher could confidently print a considerable quantity because of the demand created by the hardback publication (and perhaps because there were fewer paperbacks around), enabled the price for a paperback to be set at the levels the public have been accustomed to for decades. A popular misconception has been that it is the paperback binding alone which makes it cheaper than a hardback: these other factors are equally significant in achieving the price.

But consider this:

• Not every hardback that is published becomes a paperback. The hardback has to be a testing ground for new works, new writers.
• Publishers have to try all kinds of new things – Roald Dahl was a first novelist once.
• If paperbacks were all brand new books with no track record, no reviews, no ‘testing’ period, the sales of the paperback would be so slow that all the necessary economies achieved by long print runs would be eroded by the even longer storage times in ever-decreasing warehouse space with ever-increasing running costs, with the probable result that the publisher would have pulped the stock of the book before everyone had even heard about it.
• If paperback books begin to be published in hardback quantities on first publication, paperback prices will shoot up and up.
• Publishers genuinely do not and cannot predict infallibly which books will find favour, sell well, or disappear without trace.

Some booksellers ask why we should expect them to stock more children’s books for such a low return on their own investment – a children’s paperback costing £2.50 takes up as much shelf space (and as much warehouse space) as an adult novel costing £3.99, but the bookseller will get a considerably smaller amount for selling that children’s book. That equation, of course, feeds through to the publishers too. There is less profit for everyone (authors as well!) but publishers continue to invest in new children’s books and continue to believe that there should be that price differential.

The situation today is complex. With the decline in hardback sales in recent years, it has become more and more difficult for publishers to cover all the origination costs with the paperback print run, without either raising the cover price to an unacceptable level for the market or printing more than it can reasonably expect to sell. In fact publishers not infrequently set prices below what they need to make a reasonable return in the hope that future books of a similar nature or by the same author will be successful on the back of the current publication.

An alternative to publishing a book in hardback first is to publish what is known as a trade paperback edition. This, from a publisher’s point of view, is a cheap hardback. Printing a slightly larger quantity to that of a hardback and using similar quality paper, a publisher is able to cut the production cost enough to enable a price of, for example, £6 instead of the £8 that a hardback edition would need to carry. Unfortunately, these paperback editions are all too frequently seen by buyers and reviewers as very expensive paperbacks without realising that they are an alternative to hardbacks. They are low run, original editions carrying all the costs of brand new publications. The trade paperback format is a response from publishers to attempt to lower the price of brand new titles, but it is rarely acknowledged as such.

All publishers wholeheartedly support the concerns of teachers and librarians at the level of funding they get, and the need to get the best possible value for the money they have. My aim here is not in any way to dismiss that concern, but rather to explain that in reality children’s book prices will not come down and there has to be an acceptance of that, and to make the point that the publisher, in the whole process, takes a huge risk upfront – the greatest risk of all – in making as wide a variety of children’s reading material available as possible. The battle for more funds has to be based on the real cost of producing the wide variety of quality writing and illustrating that we are lucky enough to enjoy today.