Publishing and the ‘Hero Model’

Print publishing, especially in some of the niche markets, is on its deathbed, which is a bit alarming to those of us who enjoy the tactile pleasures of a bound and printed thing, the joy of having a tangible object in exchange for our hard-earned money, and who like to read things that aren’t, currently, on the bestseller list sponsored by your country of choice’s leading newspaper. This is particularly noticeable in – though by no means exclusive to – the manga and light novel industry in the West, where publishers and fans have locked horns in a market-forces suicide pact and are struggling to see who can do the most harm the quickest.

These niche markets are being looked to by the rest of the publishing industry, because if anyone is going to come up with the next big thing to resuscitate the industry as a whole, it’s probably going to be one of the little guys on the edge of the publishing ghetto.

Over the last week, a strange and convoluted idea called the Hero Model has garnered some attention.

The basic idea, from what I gather, is that publishing concerns could treat the production and publication of individual properties – either individual volumes or finitely-sized series – as a sort of cooperative venture funded up front by participants. In other words, if you want to see a book published, you pony up money – to the publisher, directly – in advance, to help ensure and directly finance the book’s publication, and the book would only be produced and published when a sufficient degree of financial support had been reached.

It seems a great and democratic way to approach publishing, but I suspect it would only really be successful under certain circumstances – one that’s getting a lot of attention at the moment is the publication of manga or light novel series, in no small part because publishers in those markets have a really appalling track record of dropping trilogies and longer series part way through, to remain forever unavailable in English translation. In other words, it’d only be a viable strategy for something where one could reasonably expect sufficient demand to exist, rather than a complete unknown property like a first novel from a first-time author. Unfortunately, the key word here is sufficient

Would it work? Probably not. I think one of the advantages of the ‘Hero Model’ as discussed is that creates a couple important distinctions in terms of support: there is a clear-set target which supporters can aim for, and the form of support – funding in terms of arbitrary “Units” – is separated from the end-product.

I’m not sure it would actually work in practice, though, because the numbers involved are larger than I think a lot of people realize. What I think confuses a lot of people in the discussion of stuff like this is that everyone is all abstract, and not using any actual numbers, so I’m going to try and work this out using hypothetical numbers for a three-volume light-novel series, below.

Let’s say you’re a small-press publisher, and you’re interested in licensing a complete trilogy of light novels from Japan, in an English translation for the North American market. You want each of the three volumes to have a retail price of $10 USD, and the up-front costs are fairly simple:

License: $2000 USD/book or 10% of the cover price on copies sold, whichever is higher;
Translation: $2500/book
Typesetting, proofreading, layout, editing, et cetera: $500/book

(These figures are educated guesses, based on various statements from publishers over the years.)

Up front, you need $5,000 per book, plus printing costs, and this is what basically renders the idea unusable. If the book has a retail price of $10, you’re going to sell it wholesale (to bookstores) for about $5.50 per copy, which means your total per-copy cost shouldn’t exceed that. Let’s say, purely arbitrarily, that it costs $2 per book to print 2000 copies each – that’s a per-title printing cost of $4000, plus per-title overhead of $5000.

If you print 2,000 copies, that works out to a cost to you, the publisher of $9,000 – $4.50 per book, which means you’d make about a buck a copy wholesale, which is pretty decent for a paperback. It also means that you’d only make $2000 per title, $6,000 for the whole trilogy, assuming you sold all 2,000 copies of each title, which is unlikely, but nevermind that for now, because you’d probably make a LOT less than that, as we’ll soon see.

However, if you want to produce the whole trilogy, as seems to be the big issue in the niche market pipe-dream, you need to come up with $27,000 to cover all the up-front costs and ensure that you don’t lose money on the venture. That’s a goodly chunk of change – how would the ‘Hero Model’ work here?

Well, I guessed at first you’d try to sell ‘Units’ at $27 or so a share, or more probably more like $29 or $30, to cover credit-card fees, et cetera. You’d need people to commit to buying 1,000 Units at – let’s say, for the sake of argument – $30 per Unit. That would guarantee you would have the money to print 2,000 copies of all three volumes in the trilogy, which would make the fans happy and make you look like good guys all around. Unfortunately, that leaves distribution out of the equation, doesn’t it?

Alright, let’s try this again: You need $27,000 up-front to guarantee you can print 2,000 copies each of three books. How about… you divvy that up into 1,350 Units of $30 apiece. Of that you lose a buck to PayPal or the credit-card companies, which means each Unit nets you $29, and gets the Hero a copy of each book shipped to their house when it’s published. Let’s say it costs you $3 to ship one volume – you get $20 towards book production costs for each Unit, and the Hero gets all three volumes at what works out to be $10 per copy, shipped.

Now, again, you need to sell a lot of Units – 1,350, in fact – and I still don’t think you’re going to get 1,000 people – let alone 1,350 people – to commit $30 apiece to ensure the publication of their favorite series. (If you could, the whole ‘Hero Model’ thing would basically be superfluous.) However, might you get some people willing to spend $60 – purchasing two Units – to help ensure publication? Maybe… but I kind of wonder whether you’re going to get enough people to actually get you to that magic 1,350 Unit point. And, remember, if you give one book per Unit, that means your profit depends on your ability to sell, from your 2,000 copy print run, the 650 or so copies left through normal distribution channels, and you’ve just killed the market for those books – how many of those extra copies, from individual Heroes who invested in multiple Units, are going to wind up for sale at below-retail prices, as Heroes try to recover some of their investments?

I’m not convinced it’s going to work, unless you jack the nominal cover price to kind of crazy levels – if the MSRP is $25 per copy (for a 250-ish page paperback, for crying out loud) – you could get away with (27,000 / 75) something like 400 Units at $75 per, but I’m skeptical that any niche genre series has that many fans who’d be willing to pay that kind of price. (I might be wrong where some, let’s be honest here, unusual porn interests are concerned, but for more general interest stuff… no. Not when competing books are $10-12 per volume.)

I think the only way to make it work is to make the Units small – small enough to be nearly trivial, in fact – and do away with the idea that one Unit = one copy of the finished product. Let’s say each Unit were just $6, of which the publisher sees $5 after fees – you’d need to sell 5,400 Units, and anyone who has less than (arbitrarily, 30/6) 5 Units doesn’t get squat, but is merely a sort of socialist supporter of the project.

You might get maybe 500 people willing to pony up for the minimum requisite 5 Units ($30) needed to get a copy of each volume, shipped – that’s 2,500 Units. Would you find people who are philanthropic enough to donate $6 once or twice to help ensure the series’ publication out of the kindness of their hearts? You’d still need near 3,000 Units to be purchased that way; I can see it working once or twice, but after the novelty wears off, I can’t really see it being a successful strategy, especially in the anime/manga/light novel community, where the rampant levels of piracy seem to suggest that a very large proportion of fans are unwilling to part with their money, if they have any, in return for an actual tangible thing, so asking them to pony up money out of the goodness of their hearts seems doomed to failure.

What if you don’t deal with a trilogy, or a series? What if you put the whole thing out as one huge volume, rather than three individual ones? Per-page costs are relatively minimal in printing (this is why a 250 page book may sell for $10, and a 500 page book only $12), so you can shave a huge part of your expenses – overhead will probably still be $15,000, but printing 2,000 copies might only run, mmm, $3 per copy (rather than three volumes at $2 per copy per volume = $6), so your up-front costs are “only” $21,000, and might even be slightly lower than that. This almost becomes workable, but I still don’t see it happening. (I figure you can probably get 500 otakus to pony up a reasonably market price for just about anything, but that still leaves you barely halfway to the $21,000 goal.) It doesn’t even work if you drop the translation costs out of the equation – maybe you want to re-print something that’s already translated, but out of print, or whatever – you’d need $13,500 for the one-volume compilation, which is still fairly unobtainable, IMO.

Is the ‘Hero Model’ useless for publishing? Not necessarily – I think it’s workable for some varieties of very small-press, basically vanity publishing, where the author is the publisher is the editor, and doesn’t actually want to do anything more than see their product in print and break even, but if you’re eliminating the profit aspect, print-on-demand makes more sense, unless you’re unnaturally enamored of the gloriously socialist aspects of the whole “selling Units” model.

For the kinds of titles that have small but vocal fanbases, publication really isn’t economic unless they’re somehow subsidized – either directly, or by people involved in their production working for free. Trying to reinvent the economics of publishing is a fun and probably rewarding intellectual exercise, but nothing is going to change the fact that publishing for a small market is inherently unprofitable. (The ‘Hero Model’ becomes splendidly successful once you postulate 1,500 or so Heroes willing to support a given title or franchise, but the English-speaking market for a lot of the stuff people are talking about the Hero Model rescuing just isn’t big enough. Too few people willing to spend too little money to get what they want.)

There are two theoretically workable solutions: somehow increase the market for these marginal titles in question, or increase the publisher’s profits on them. The latter can happen in one of two ways – jacking up cover prices, or only selling directly to the consumer, by making the book unavailable through Amazon, Borders, or whatever. Either will increase the publisher’s profits, but both will piss off the consumer – probably not a viable long-term strategy.

As to the former strategy – increasing market demand – the only practical way I can see to do that is to get celebrity endorsements (for a given value of celebrity, at least). Think of it as the Oprah factor, only on a smaller scale. Like, say Neil Gaiman was a fan of… Zero no Tsukaima, which I don’t think he is, and read Japanese, which I don’t think he does, and raved on his blog how great the original novels of the franchise (which is best known as an Anime series) were, which I doubt he would do – then a publisher could probably get the necessary sales to make publication of those novels in English financially appealing. There’s a word for something like that happening, though – a bloody miracle…

Published in: Geekiness, General | on October 12th, 2009| Comments Off on Publishing and the ‘Hero Model’

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