A tough market and changing paradigms are reflected in the average revenues of PMA publishers according to a survey conducted recently by a research and information provider, the Brenner Information Group. The intent of the PMA-sponsored survey was to develop a profile of small independent publishers and to determine the operating characteristics of this segment of the publishing industry.
The comprehensive survey was conducted between June and November 1997. It was hoped that at least 100 surveys would be completed and returned to yield a minimum acceptable sample population for analysis. We were pleased that over 200 members participated in the survey, although some of your responses were cautious, and some caustic. Of these 200, 177 responses were accepted and used in our study. The results of the analysis were compiled into a special report that is being released this month.
The survey results detailed in this special report are representative of the small independent publishing industry today and provide an interesting perspective into who we are and how we approach the business. Detailed analysis and comparison information are contained in the report.
What We Found: The Basics
First of all, 56% of you are male, and 41% are female. Three percent of respondents declined to report any gender.
According to the survey, most of the small publishers (27%) are located in California with the next largest number of you working out of Colorado (5%), Florida (5%), New York (5%), and Oregon (5%). Four respondents publish in Canada, and one operates out of Hong Kong.
On average, you started your business in February 1989. Over half of you started your company after December 1994. Some respondents started their publishing businesses over fifty years ago.
Generally you operate as a sole proprietorship (47%). Your next choice of legal structure is the S corporation (16%), although 11% of you prefer the C corporation.
Most (63%) operate out of home offices. Your next most popular operating location is a rented office (26%), and 6% of you are operating out of your own building.
How Are the Revenues?
Your average annual revenue in 1996 was $395,922. This increased to $420,248 for 1997 (up 6%). The average annual revenue of those of you who operate from your own building was over $860,000. Home office entrepreneurs also fared quite well with average annual revenues exceeding $325,000. Surprisingly, the highest reported income was not earned in a rented office or private building. It was in a home office and topped $300 million!
Seven percent generate revenues over $1 million a year, yet a third of you earned less than $100,000 in 1997. And 27% have revenues less than $50,000 a year. Three percent reported no publishing income at all in 1997. Some respondents declined to report their income.
As described in our special survey results report, we discovered important differences between the revenues of small independent publishing companies based on gender, number of full-time employees, operation location, the amount of titles published, and book genre.
Number of Books Published a Year
When we analyzed the number of books that you produced, we found that you published an average of six titles in 1996 and seven in 1997. The maximum number of titles that were reported published in 1997 was 140, with 250 reported as the maximum of all titles currently in print.
Hours Worked & Employees on Board
Most of your companies are open five days a week. Home offices typically operate six days a week. And 3% of you keep your doors open seven days a week.
Fifty-three percent use full-time, 40-hour-a-week employees with an average of nine full-time workers in each business. Twenty-seven percent of you work your full-timers 50 or more hours each week. And 37% use part-time workers with an average of two part-timers working 20 hours a week. A respectable 33% of you hire freelance help with the survey’s statistical average coming out four freelancers working nine hours a week.
Company-paid benefits reveal another fascinating insight into the priorities of independent publishers. Only 32% of you give your workers paid vacations. The statistics on the number of paid vacation days were evenly split between one week and two weeks. A whopping 68% of you provide no paid vacations. The statistics for paid holidays are similar. Seventy percent provide no paid holidays off. And only 22% give their employees paid sick days.
The benefits picture wasn’t much better with company-paid insurance. Only 30% provide paid medical insurance, only 16% provide paid dental insurance, and an unimpressive 6% offer paid vision care insurance.
On the financial side, less than 10% of respondents give merit bonuses or provide profit-sharing benefits, and just over 10% offer 401k benefits. Only 8% have a retirement or pension plan in their company. And for all our talk about the importance of education, only 7% offer tuition reimbursement, and only 2% offer scholarships for children of employees. However 10% of you do pay for special work-related subscriptions.
One particular benefit that stood out was flextime. In the publishing industry, one would expect a high percentage of companies offering this benefit. However the survey indicates that only 24% of you allow employees to shift their work hours. And just 5% allow employees to telecommute.
Don’t ask the independent publisher to help care for infants at the company’s expense. Only 2% provide on-site childcare, and none help pay for off-site childcare.
Home Office vs. Rented Space or Owned Building
When we analyzed the profile data based on operating location, we discovered interesting differences between publishers who operate out of home offices, storefronts, rented offices, or the owner’s facility. The predominant legal structure for both home offices and publishers operating out of their own building is the sole proprietorship. The average home-office small publisher started within the last six years. The average start date for those operating from a rented office or storefront was the mid-eighties, while entrepreneurs who own their building started even earlier.
The maximum number of titles in print was highest for those in their own facility (250) with the number declining as we looked at publishers operating out of storefronts, rented offices, and home offices. The average total titles in print was highest for the publisher operating from a rented office.
A third of the home-office publishers work 20 hours or less each week. Fifty percent work between 40 and 60 hours a week. And 17% work 70 hours or more each week. Seventy-eight percent of publishers in rented offices work between 40 and 60 hours a week, and 73% of publishers operating in their own building also work 40 to 60 hours each week.
When we analyzed the average number of employees based on operating location, we noted that the number of home-office publishers with 40-hour full-time employees was skewed to an average of 12 by one entrepreneur who reported a staff of 450. When we pulled this outlier out of the data population, the average number of employees working 40 hours a week for home-office small publishers came in at two with a minimum of one and a maximum of 26. An average of five full-time employees work for publishers in rented offices and an average of four work for publishers in their own buildings. The small publisher operating from a rented office uses the most freelance help with an average of seven freelance employees.
The most prevalent benefit for home-office and rented-office entrepreneurs is the paid vacation. Paid holidays are the predominant benefit for publishers operating from their own building. All operating location categories reported medical as the predominant insurance benefit. Under the financial benefits category, most home-office publishers like the merit bonus. Profit sharing was mentioned the most often by publishers operating from rented offices, and medical reimbursement was reported the most by publishers in their own building. All operating location categories placed flextime ahead of telecommuting, childcare, car allowance, company car, club memberships, and paid subscriptions.
Types of Books Published
When we analyzed the reported data on the types of books published, we found that nonfiction is the most popular category of books that the respondents produce (81% of titles) with far fewer fiction titles (19%). The two top categories for fiction were the juvenile market (9.8% of fiction titles) followed by poetry (8.9% of fiction titles). For nonfiction, self-help led (8.5% of nonfiction titles) followed by how-to and business (both came in at 5.6% of the nonfiction titles).
The real analytical challenge came when we looked at book production costs and pricing data. We received 140 cost and pricing survey sheets. We quickly discovered that over half of the participants don’t really understand how to forecast, collect, and track cost information. Many have no idea what costs they incurred to write, design, layout, proof, and print each title. Some aren’t even aware of the total cost incurred in completing a book project. The more successful ones do understand and track their costs carefully.
Nevertheless, our study did produce interesting findings based on the reality in your responses. First, the average first print-run is for 4,986 copies. The average second printing is for 4,776 copies. Some of you are making unrealistic projections for your lifetime print-run of certain titles. Still, many of you do not adequately know (or track) your true marketing costs. Retail prices varied based on a number of factors including book size, genre, print-run, and the experience of the publisher. The average Suggested Retail Price (SRP) of all the books reported was $28.67.
Full Two-Part Report Available
After analyzing the mountain of survey data that we collected, we produced a special report containing the results of our analysis. In the first section of this special report (Publisher Profiles), we describe the survey participants by operating location, gender, revenue (six subcategories), time in business, number of full-time employees, number of hours worked each week, genre of books published, hardware and software used, and benefits provided. Section 2 of the special report (Book Cost Analysis) details the specifics of book production and marketing costs including pricing points. This statistical look shows what you pay to produce and market your books. It also profiles the typical page count, percent graphics, and suggested retail price for books in the various genres reported.
Publishers and vendors will find both sections of this special report valuable for strategic and tactical planning. Small independent publishers will also find these sections useful for fine-tuning business operations and getting the most return for every publishing dollar spent.
Each participant in this survey has been sent complimentary statistical results for the categories in which they provided useful data. Other PMA members can obtain a printed copy of each section of the complete Special Report on the Small Independent Publisher for $30 ($50 for both sections). Non-PMA members may purchase each section of the special report for $60 ($100 for both sections). All buyers will be charged sales tax (if appropriate) and priority mail postage. To order, call 1-800/811-4337 or contact the Brenner Information Group at 619/538-0093.
Robert Brenner is the president of Brenner Microcomputing, Inc. and the general manager of Brenner Information Group. He is a popular speaker and the author of 19 books and over 300 articles. He can be reached at PO Box 721000, San Diego, CA 92172-1000 [619/538-0093 phone, 619/484-2599 fax, or atBinfog@aol.com firstname.lastname@example.org]. His company’s website is at www.brennerbooks.com.
©1997 Brenner Information Group
|This article is from thePMA Newsletterfor December, 1997, and is reprinted with permission of Publishers Marketing Association.