Business Musings: The Small Traditional Publishers (2017 in Review) 2

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I’ve been catching up on 2017 as if it was a homework assignment for a major college course. Because of my own circumstances, I ignored a lot in 2017, and now, as I plan my 2018, I want to know where I—and the publishing industry—stand.

I have written two previous posts on this topic.  One is an overview. The other is a long post on the Big Five traditional publishers here in the States. Even if you’re not living in the U.S., you’ll want to read that one, because so much of what the U.S. publishers do gets replicated worldwide, particularly since the Big Five are part of international conglomerates, and those conglomerates have other book publishing arms around the world.

As I mentioned in that post, my traditional publishing posts are focused on the U.S. because I’m not as well informed about traditional publishing companies in other countries. Still, if you live outside of the U.S., you might find some similarities to what is happening in your country. If so, please feel free to comment below.

Initially, I planned to handle traditional publishing as one big lump in the industry. That’s how I’ve been doing it since I started blogging on the industry in 2009. But that way of dealing with non-indie publishing no longer works, and it took me until December of 2017 to make that realization.

I have known that a change was coming in traditional publishing for years now. The way that the Big Five (who were bigger and more than five nine years ago) were running their businesses inevitably meant that they would be too slow and too large to make changes in their publishing model quickly enough to capitalize on the new world of publishing.

I did not expect them to screw up as royally as they did—hating their biggest customer (Amazon) and essentially getting into a war with it. Nor did I expect the Big Five to so completely misunderstand the market that they ended up cutting their real cash cows. I also didn’t expect the Big Five to price their ebooks so high that the books sell to regular readers despite the price. That does not invite new readers to sample authors, so it’s hurting the future of the Big Five book lines.

In fact, most everything the Big Five have done in the past two years have hurt their book lines, rather than help them. Other factors will keep those publishers in business, factors that I explored in the previous post, but those factors make the Big Five a place for any savvy writer to avoid.

Once I separated out the Big Five from all of the other traditional publishers in the U.S., I came to a happy realization. There are a lot of good publishers doing the kind of work we readers want publishers to do—curating books with a voice and an attitude, so that we know what to expect from the company, marketing those books to the best of their ability, and making the books available in all formats. In many cases, the ebooks are priced at under ten dollars.

Realize when I’m talking about small traditional publishers, I am not talking about corporations inside the umbrella of the Big Five. So even if your favorite “publisher” has a clear voice and an attitude, but is part of a Big Five corporate entity, that publisher is not the small traditional publisher I’m talking about. For example, Harlequin moved from a small traditional publisher to a corporation wrapped into HarperCollins, a Big Five company, in 2014. So Harlequin is not part of what I’m discussing here.

Neither is Tor, which is part of Holtzbrinck, (MacMillan here in the U.S.), which is also one of the Big Five. At any point, these smaller corporations can be shut down, reassigned, changed, or focused in a brand-new direction, based on what the conglomerate wants.

Rather than ask me if your favorite company is a small traditional publisher, Google them or look them up on Wikipedia. Follow the corporate trail, and you’ll learn quite a bit.

When I talk about small traditional publishers, I’m talking about family companies or companies that are not part of a bigger conglomerate. These small companies are run by a single owner or by a small board of directors, but the company is not publically traded. Many of these small traditional publishers have distribution deals with the Big Five. Distribution deals mean that these small publishers use a Big Five’s sales operation to help sell their books (at some kind of percentage or fee; I’ve never seen one of those deals, so don’t know the financial details).

But, even with those distribution deals, these small traditional publishers are not part of the corporate entities that compose the Big Five.

And when I talk about small, I’m talking about their size in the industry, not what most people think of as small (like a little local company).

Small traditional publishers generally bring in at least $10 million in revenues annually and often have between fifty and 100 employees. Compared to the Big Five, these companies are tiny.

Most of these companies are not publically traded, so finding their actual revenues or their profits are hard. Here’s what I could find on a quick Google search for a few small traditional publishers.

For example, Kensington is listed on as making $11 million in annual sales. Where Buzzfile gets this information, I’m not sure.

Sometimes the information on finances for these small companies is deliberately opaque. For example, Buzzfile lists Soho Press as making $510,000 in annual sales with five employees at the location cited in the Buzzfile report. (It’s very specific about the location, which means there are probably other locations, and a breakdown of financial information inside the company itself.) If Soho Press only generated half a million in sales every year, they couldn’t afford their Manhattan offices, which are near Union Square Park.

Soho Press is an imprint of Soho. Soho has two other imprints, Soho Crime and Soho Teen. I have no idea what the annual revenue of the other imprints is because I can’t find them. I’m sure there’s more money here, but they’re making it hard to find…which is fine with me. Many, many, many private small businesses do the same thing, and hold their financials very close to the vest.

D&B Hoovers, which uses commercial databases to determine corporate worth, lists Sourcebooks at $66 million in revenue, Workman at $103 million, and Chronicle Books at $20 million. All of this looks like a lot of money, until you place it in the context of the international conglomerates that hold the Big Five. Those conglomerates have annual revenue in the billions of dollars, of which the Big Five are only a small percentage.

The small traditional publishers have many advantages that the Big Five do not have. These small traditional publishers have a corporate vision that is usually enforced by the owner or the board of directors. Most of these small companies name the CEO or the owner of the business, and much of the direction of the business comes from the top down to the employees.

There’s an actual vision in these places, and one essential part of that vision is a love of books.

Publishing for these smaller companies is not about IP valuation (see last week) [link] or about a global market strategy—even if the company has an international vision. It’s about publishing good books that fit with the company’s business.

Sure, those books need to be commercial. And they need to earn a profit (large or small) for the company or the company will eventually drop the author.

But for the most part, these small traditional publishers are still what we romantically think about when we think about book publishers—people who love books and do their best to get them to the marketplace.

The vision for the company informs the direction the company takes and the books it acquires. There is, in all of these companies, a unified company vision, and an editorial one—often with only a handful of editors who shepherd projects into being.

These companies do not have the deep pockets that the Big Five have. If a writer gets a million dollar advance from one of these companies, it will be newsworthy. That advance will also spread over many years, rather than one lump payment.

These companies work on margins, just like indie writers do. And those margins are pretty well set. These companies also have a vision for the author and the series, so that the books build. These companies don’t abandon a writer after one or two books.

I’ve seen the contracts for many of these small traditional publishers. Like every other business, some of these small traditional publishers are great. Others are awful.

Of the three I’ve done business with in the last decade or so, two of them have been forthright and easy to work with. They don’t have the gotcha clauses in their contracts that the Big Five have, and they’re really not out to own the entire IP.

In fact, two of these companies have clear royalty statements, and have been up front about what they planned to do with my projects, and how those projects fit into their entire vision for the company.

The third company that I’ve worked with started with the best contracts in the business—the most writer-friendly—and in the five years I worked with them changed their contracts to the worst contracts in the business.

That company is a complete mess. It has at least one editor who is well known in the business for verbally abusing her authors (and who has told more than one author to ditch characters of color because characters of color will “interfere with sales”). This company is doing its best to hang onto every single dime that the writers generate.

I suspect the company lost a lot of money in the digital revolution, didn’t move quickly enough, and didn’t have enough ready cash to handle the change, so it squeezed revenue from everywhere it possibly could. That became a habit, and the company will not change. The contracts confirm this.

I don’t know if the company will survive the next five years, despite its high reported annual revenue. If it does, it will do so on the backs of its authors rather than working with its authors.

So, as you can tell, just because a company is a small traditional publisher, privately owned, doesn’t mean it’s a good place for writers. Doesn’t mean it’s a bad place for writers either.

These companies, though, are options for writers, if they want to sell their books traditionally. The writers would have to have a good literary lawyer to negotiate a good contract, and the writers themselves would have to know what that good contract is.

They would also have to do a lot of research before ever submitting to one of these companies, to see if the company is well run and is a good place for writers in general.

But I promised a review and a look forward about the smaller traditional publishers, and here’s what I found.

These smaller traditional publishers are very different from their Big Five counterparts. These publishers are much more nimble than the Big Five and, indeed, are working hard to learn from indies.

In fact, many of you saw some of that learning a few years ago, when Steven Zacharius, the CEO of Kensington Books, asked a lot of questions and did a lot of reading on sites that cater mostly to indie writers, like The Passive Voice. Zacharius and the other publishers/CEOs who frequented indie sites weren’t doing it to bolster their reputations, nor were they there to defend their business practices.

These folks were aware of the changing marketplace and were looking at all parts of the market to see what techniques they could use to further their own businesses. That’s one reason I go to various sites, and experiment all the time with different methods of doing things.

The savvy smaller traditional publishers have a bigger online presence than the Big Five. They also have reader communities on their publishing websites. Some of them have company-wide newsletters, and many have become reader friendly.

They’re experimenting with everything from Book Bub to free first in series (often on their own sites). Baen Books has had an online bookstore since the late 1990s. They have a long-standing free library, and they have two different programs (eArcs and monthly bundles) for selling books before the official release date.

There’s a lot of innovation at these companies, and lots of ways to help writers with discoverability.

The people who run these companies have a huge desire to make every book they publish successful, because the entire basis of that small traditional publishing company is…successful books. Not IP valuation, not using a story as the basis for a wide variety of non-book products.

Publishing good books and getting them to readers. That’s how the companies started, and that’s what they continue to do in 2018.

But…and you knew there would be a but, right?

The writer has to be willing to part with control over that book for at least ten years (in the case of one of these publishers) or for the life of the copyright (in the case of the icky bad publisher).

Sometimes that risk is worthwhile—with the right project.

For example, in 2016, I published Women of Futures Past with Baen Books. I own my own publishing company. Why would I publish an anthology with Baen?

Baen is a small traditional publisher of fantasy and science fiction. It has a strong base of sf&f readers at its core. It promotes its work directly to fantasy and science fiction readers, bookstores, libraries, and online.

I wanted Women of Futures Past to go directly into the heart of science fiction readerdom, and Baen has had an established presence there since the 1980s.

If I went with Tor, considered the literary darling of sf, I would have to have made a contract with the international conglomerate Holtzbrinck, and the book, which I want to remain in print for years, would have gone out of print within two years. Because of the contract I would sign, my own publishing company wouldn’t have been able to reprint the book for many more years, if ever, so the book would have been lost to me.

Right now, Women of Futures Past is selling exactly as we expected it to, into the markets that I wanted it to reach—and more. Baen Books could publish that book much better than my own company could, given the goals I had for the book itself.

I did the research. I did a lot of business analysis of what I wanted with that project. I knew I would get paid less than I would have if I had published the book myself, but I also knew the book would have a lot more support among the readers I wanted it to reach through Baen—which is exactly what happened.

I traded revenue for visibility in the sf field, because that was what was best for the project.

And it has worked out well. My experience with Baen has been better than I expected. They were easy to work with, kept their promises, and have worked hard to support the book. It’s ended up being one of the best publishing experiences of my entire career.

That’s the kind of analysis that writers have to do if they’re going to go with a small traditional publisher. There are other factors that a writer should consider if they go with a small traditional publisher instead of indie publishing the book.

It takes traditional publishers time to publish a book, months, maybe even years. Then there’s the loss of income. Yes, the writer gets paid up front with an advance, but the amount per copy sold that the writer earns from a traditional publisher is one-fifth to one-seventh of what she would earn if she published it herself.

Writers who have day jobs or feel they can’t do the work of indie publishing—finding a cover, writing blurbs, designing the interior—might also consider small traditional publishers.

And a writer who is in a subgenre that still has a wide mass market appeal, like cozy mystery, might want to consider a print-only deal with a small traditional publisher. But be careful! Some print-only deals are written in such a way as to enable the publisher to end up owning the ebook rights after all.

I’ve seen many print-only deals with that sneaky little clause in them, although to be fair, those deals were all from the Big Five (mostly Simon & Schuster). That doesn’t mean a terrible awful small traditional publisher won’t steal those same contract terms from a Big Five contract. A handful of small traditional publishers have done just that—stolen the worst clauses from a Big Five contract, combined them, and called them a book contract. (Some of those so-called contracts make no sense at all.)

So, in all things traditional publishing, the writer must be careful of what she signs. She must also know what she’s going to get in return for the loss of income and tying up the copyright for a certain period of time.

These days, though, I actually see a successful career path for a writer who wants to be traditionally published, if that writer goes with a small traditional publisher (not the Big Five). That writer will probably not earn enough to ever quit her day job, but she can have a career with many of these houses.

If that’s what the writer wants without earning a living, then I say go for it.

What caused me to change my tune about small traditional publishers?

The change that I found buried in all the data I’ve been looking at over the last few weeks.

Small traditional publishers are positioning themselves to become the dominant traditional publishers of the next decade or so. These publishers can never match the advances or the reach of the Big Five, but they’re not going to have to.

As I wrote this blog post, the Big Five lost one of their main earners. Mystery writer Sue Grafton, a bestselling novelist since the 1980s, passed away. (She was a major, major influence on mystery; it’s sad to lose her.)

She was 77.

James Patterson is 70. Stephen King is 70. Nora Roberts is 67. John Grisham is 62.

The big reliable bestsellers, the ones that the Big Five rest half of their catalogues on, are aging out. Some new(ish) bestsellers have developed in YA—Jeff Kinney (46), John Green (40), J.K. Rowling (52)—but only Kinney is putting out a book a year, which is the minimum these big publishers need to support their lists.

The Big Five are not developing new mega-bestsellers to replace the old guard. They’re trying, sorta, by having Patterson “co-author” books with other writers (some of whom are in their 60s and 70s as well), but that’s not building the huge bestseller the natural way.

What is the natural way? By word of mouth and years of growth.

The small traditional presses, for the most part, are building writers the natural way. So when readers can no longer buy a brand-new James Patterson book—written by James Patterson (and not some other name from an outline)—those readers will look for a new writer to fill that hole.

That new writer might be indie (and we’ll discuss that in a future blog), but if that new writer is traditionally published, I’d bet good money that the new writer will be published by the small traditional presses—and will have a backlist that’s several titles deep.

Long about 2025 or so, the traditionally published writers whose books sell the most (I’m not calling them bestsellers because who knows what will happen to those lists by then) will come out of presses we now call small traditional publishers.

That’s why some of these small traditional publishers have been snapping up the bestselling authors that the Big Five let go, because the writers’ careers weren’t growing fast enough. The small traditional publishers know how to get the books to the writers’ existing fan bases, and how to keep the writers’ careers growing. It’s a win-win for the writer and the publisher.

I am not predicting that traditional publishing will go away. Far from it. But I am saying that the players will change. Some of the imprints in the Big Five will vanish. The Big Five might not be anything at all. They might even be sold off by their corporate overlords by then. Or one or two of the Big Five might be the King of the Hill, having swallowed up the other members of their billion-dollar category.

I do think that the smaller traditional publishers—if they don’t get bought out by the international conglomerates that own the Big Five—will publish the bulk of the traditionally published writers within ten years. (Of course, that will make them a tasty snack for the international conglomerates, looking for IP.)

From a business standpoint, then, if you the writer have to publish traditionally for whatever reason you feel necessary to your life and your writing, heavily research the small traditional publishers and maybe go with one of them.

The good ones will publish you well. They’ll negotiate the contract so that it’s mutually beneficial to both of you. They’ll pay you fairly. They’ll actually read your book, and publish it using the most modern techniques they can—not just in the right formats, but promoting it in a traditional way that also ropes in the best of indie.

It was fun to discover something positive on the traditional publishing landscape. The Big Five is a nightmare for writers, and will remain so.

But a handful of small traditional publishers will gain traction, power, and income as the shifts in publishing continue. Some of those traditional publishers will work as a partner with their writers.

That’s good news.

I still believe that, when it comes to a full-time fiction career, the best thing a writer can do is go indie. But not every writer is suited for the indie world. Those writers will, most likely, never be full-time writers, but not every writer wants the uncertainty of a freelance career.

If that writer who does not want to freelance does her research, she can have a long career publishing a book or two a year for a small traditional publisher.

That’s an option that I thought was disappearing. It’s nice to see that it hasn’t.


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“Business Musings: Smaller Traditional Publishers,” copyright © 2018 by Kristine Kathryn Rusch. Image at the top of the blog copyright © Can Stock Photo / alphaspirit.



19 thoughts on “Business Musings: The Small Traditional Publishers (2017 in Review) 2

  1. Small/ePubs usually state royalties are 45% of net, at least for ebooks. Every so often, I look into a place, but I come across the royalty line and cringe and never submit. Am I too used to self-pub royalties? I don’t think pubs are willing to change it to a percentage of the retail price, last I knew.

  2. Really interesting article, thanks so much for writing it. A quick question, as an aspiring hybrid author: since you seem to suggest that many of these smaller publishing companies might potentially make good business partners for hybrid authors (with the appropriate due diligence), I’m assuming that most of the good ones you’ve looked at do accept unagented manuscripts? Your views on agents are well-known, so I’m assuming you wouldn’t recommend working with a publisher (even a good one) if it required going through an agent…

    1. I have no idea. That’s up to you to research. But most places look at unagented manuscripts if you simply know who to address the manuscript to. I mean, they might miss the next bestseller, so they do look. Usually. If you get rejected, they won’t respond. They’ll just remain silent.

  3. “That’s why some of these small traditional publishers have been snapping up the bestselling authors that the Big Five let go, because the writers’ careers weren’t growing fast enough. The small traditional publishers know how to get the books to the writers’ existing fan bases, and how to keep the writers’ careers growing. It’s a win-win for the writer and the publisher.”

    I’m curious: what are the tactics that small traditional publishers are using to increase discoverability and get more books into more readers’ hands that the big traditional publishers are not using?

    1. I hate to be vague, Bill, but mostly they’re using the techniques pioneered in the 1950s & 60s, keeping books in print, letting word of mouth build, taking the long view, occasionally finding a new way to promote, going for book clubs–everything that takes years to do rather than weeks, like the Big 5. See my Discoverability series and some of the other posts I do on marketing. The smaller publishers tend to do things like that (remembering their inventory) rather than publish and toss away if something doesn’t hit in a month.

  4. There is a huge thing you missed in your great article, Kris: Amazon Publishing. The Amazon publishing houses have a huge advantage other both indies, Big 5 and small publishing houses: they can sell much better on Amazon through a very efficient marketing tool that is (rightly) named Amazon First.

    I smiled when I read the part about small publishers using the awful contracts of the Big 5, because for my one and only experience with a small french publisher, this publisher used the boilerplate Gallimard contract. Which is awful, as you can guess.

    I also used to go to the Baen forums at the beginning of what I call my “American adventure”, and found them both fair and innovative. It was very easy, for example, to have my book reviewed by another author in exchange for me reviewing his book. An excellent website for learning.

    At the end, though, it was just me dipping my toe in their waters, because I found indie publishing much more profitable. But I understand your decision with them, it makes perfect sense!

  5. From comments I’ve seen Steven Zacharius and other senior people at small publishing houses make on indie-centric blogs, I get the impression many small publishers believe–or at least are willing to gamble–that a hybrid approach benefits publishers as well as writers.

    That said, I have had experience with arrogant, exploitative, and flat out dishonest small presses. (Not to mention incompetent.) So yes to your advice to research deeply.

  6. Great overview.

    For what it’s worth, the trad nonfiction market is much the same. I’m choosing to release a book through a smaller privately-held trad nonfiction publisher for reasons much like yours. I’m also leveraging them to grow my mailing list, and the text includes “for more info, see this indie book by the same author” where appropriate.

    Publishers a tool. Don’t let your tools use you. 😉

  7. Really good food for thought, Kris! I do have take exception with this quote, however: “These companies don’t abandon a writer after one or two books.” That is actually exactly what happened to me and a bunch of other romance authors (mostly historical romance writers) acquired by Kensington’s Zebra Debut line in the mid-to-late 2000s. Even before the second book of my 2-book contract came out, I was informed that my contract wasn’t going to be renewed because the “numbers weren’t good” – despite the fact that my debut book was up for a RITA award. Unfortunately, Kensington gave my book a cover that was all wrong for my subgenre, and the book released in early October 2008 – a terrible month for authors, especially new authors. As the book blog Editorial Ass said: “In October, bookstores returned so many books that most publishing companies had more coming into them than going out of them. For some companies, the incoming number was more than several months’ outgoing.

    Although bookstores are suffering (and how), it was the publishing houses that had to absorb the cost of this cash flow creator. This is why Impetus, a relatively new indie company without the history to survive this shock, folded. Some houses lost so much money in returns in October that profits from the entire rest of 2008 have been negated.”

    The other important thing that I did not realize at the time, being a starry-eyed new writer, was that the Zebra Debut line was failing. Where Kensington once had been able to give their debut authors print runs of well over 60k, with placement in Walmart and other big box stores, those slots were gone by the time I sold to the publisher. The print run on my first book was… well, let’s say it was less than a third of that figure, and my sell through was abysmal (see the quote above about bookstores returning scads of books).

    Not long after I turned in my second book, my editor left (sending an email out on Friday afternoon along the lines of – “It’s my last day, so, bye! Your new editor is XX.”) Which, considering the fact that said editor had done NO content edits on either title, was not entirely surprising. My books got decent (though light) copyedits, but that’s all.

    Kensington acquired all rights to my books, but never put them in audio, and made a total of 3 foreign-rights sales. And there were usually snafus with one of the royalty reports (not getting sent out, getting sent but without a check, etc.) so twice a year I had to bug them (via my agent) to get it sorted out.

    So while your book might be in the hands of a company who loves books, there is still plenty of room in traditional publishing (big and small) for your titles to be mismanaged, mis-covered, orphaned, unedited, abandoned in the marketplace, incorrectly accounted, etc.

    THAT SAID – Kensington, and the CEO, Steve Zacharius, were very good about returning my rights, even giving me reversion a year early on book 2. They took down the ebooks from the retailers right away and weren’t grabby or mendacious at all during the process. So for that, I am very glad I ended up selling to Kensington, and that they got me a start in the market before the advent of indie publishing (I went to contract with them in 2007).

    I also think that they have their lines sorted out now, and probably treat established authors much better than the several dozen newbies who were published into their Debut line. And in the long run, not being under contract with a traditional publisher allowed me to start publishing indie in 2011, and go to a full-time writing income in 2013.

    As you’ve said here many times, Kris, if you want to be a career writer, it’s a long game. There are ups. There are downs. There are ups that look like downs, and vice versa. Perseverance is key. As are good books (for whatever definition of “good” you want to use). The rest, we all just have to learn to weather the inevitable storms, bail when necessary, and hoist the sails high when we catch a following wind.

    Thanks, as ever, for your thoughts here. They are appreciated.

    1. I found Kensington great on rights reversions as well, Anthea. I’m sorry that you had a bad experience with them. All of mine were positive, but eventually, we did part ways because of sales. That happens no matter what.

      I looked at your dates, though, and I have to say something. October of 2008 is a bad month to make any kind of generalization on. The numbers were HORRIBLE that fall not just because we had a presidential election, but because that’s the month the economy broke. Everything crashed and cratered. Bad doesn’t describe sales of anything. Everything had abysmal sales. The only comparable month was September 2001. Yes, writers get (and got) blamed for the bad sales, but that’s how the business works. Everyone cut books, losses, authors, and every business cut as well. You got hit by a world event.

      These small traditional publishers like Kensington experiment all the time. You take a risk as an author when you join up with a traditional publisher. They take a risk with you as well. The great thing about many of the smaller ones is this: they often negotiate. (Not always.) It is, as always, writer beware. But sometimes the risk pays off.

      Thanks for sharing here.

  8. Did you care that Baen has a much smaller presence overseas (even with the internet), or does the size of the US market in English-speaking fandom overwhelm that consideration? And will Baen give the rights back to you sooner than a Big 5 will?

    Dammit, I was going to wait till we got to Z, since the 80’s aren’t getting farther away much faster. But now I’ll catch up. I think T was the last I read right away.

    AFTER I finish with Hugo nominations.

    1. Baen has a term-limited contract. 10 years, if I remember right off the top of my head, with caveats, of course. And the overseas part, well, anyone who is smart about contracts can reserve a lot of foreign rights and exploit them without a publisher.

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