14 Financial Models–Third Perspective

M. Blair Taylor and David Thrumston

Books

Trade Books are the everyday books. Trade books are the novels and cookbooks, they are common and everywhere. These books also take up the entirety of the best seller lists. Many of these books goes through the traditional publishing process (Peterson, 2017) through large publishing companies. The process begins with; acquisition this is the discovery stage where either the publisher seeks out a writer or the writer seeks out a publisher. Publisher driven acquisition is not as much as common practice as it used to be when it comes to new writers. A publisher is always trying to find a best seller, this is because if a book becomes a best seller is makes the most money. Publishers when investing a new writer in this way often have specific selection criteria, which look at more than just the quality of writing. These criteria focus on the overall marketability of the individual.

The next step in the traditional publishing process involves edit after edit. This part is fairly straight forward, many alterations and changes are made to the text. These changes occur across boards of style, grammar, and content. Publishers don’t want to spend time or money on a book that will not sell and so they will seek out any minute issue to make certain this will not occur. Many of these edits are done in preparation for the next and last step which is marketing. Here publishers design the final look and of the book and prepare it for release. The goal here is to come up with a working promotion to best present the book to audiences and most of all to make the most in sales of the book. Where does that money from sales go? The money from book sales goes many different places. The authors do receive what are known as royalties from the profits that the book makes. In some cases, a large portion goes to the publishing companies and they split it between their various departments that covered the cost involved with editing and production of the book. At this stage publishers want to maximizes their profits, by getting the book as available to the public as possible, but also cutting the costs of production. Some methods include test marketing and only printing as little as possible. In recent years’ publishers have done this by investing in digital books and their platforms for delivery, more on this later.

The type of book directly relates to how it is marketed. For example, trade books are marketed as more of a want, while textbooks or professional books are marketed as a need (Clark). The difference is that people would use what they consider disposable income to purchase trade books. This means that marketers need to find ways of convincing people to purchase these books. Other markets include textbooks with sales always remind consistent (US Pub, 2015). In times where the economy is not doing well, trade book sales go down, but the sale of trade or educational books increase. Trade books are sold by selling agents these are different companies that can all sell the same book in different ways (Publishing, 2015). These selling agents include book clubs where members can purchase books through a membership. Bookstores which are the most traditional. Warehouses where the most discounted books can be found. And last and never least digital stores.

Publishers both large and small try to save money anyway they can think of one of the largest opportunities they see that will both help them with this and create a new market is eBooks. Not only does production cast diminish astoundingly, but the number of customers of these products will only increase over time. In order to stay relevant with the growth of technology companies such as Barns and Noble see growth opportunity in the ways of eBooks.

Magazines

Like other forms of print media, magazines are undergoing the process of digitalization. Over the last decade the majority of magazines have either started offering digital versions of their publications or have completely gone digital and forgone their physical copies. This is likely to continue happening in the future as younger audiences gravitate towards reading publications on Facebook, Instagram, and other forms of social media. Despite this Magazines are actually going about this process slower than other forms of print media, the majority of money allocated to magazines goes to the print forms of the magazine while only a fragment of that amount goes into the digital versions.

Magazine’s main source of revenue is advertisements. Companies wishing to show off or sell their products will pay the magazine to place adds in their paper. These ads are in turn seen by readers who will, hopefully, go out and buy those products. Interestingly enough most magazines actually spend more money on advertising on their physical editions than their digital editions. It is predicted that this year magazines will spend a rough estimate of 7.79 million US dollars on physical advertising and roughly 4 million on digital advertising. This works surprisingly well, with the estimated return from this spending being roughly 11.85 million dollars in 2015. (Fuller, 2016)

The success of a magazine cannot be judged easily, it requires looking at several different factors to properly determine. These factors include the amount of copies sold of both digital and physical copies, the annual growth of subscriptions to the magazine, and the revenues of both the versions of a magazine as well as the overall revenue. Even then the determining the success of a magazine is extremely situational as many factors such as the time of year, what’s covered in a specific edition, and current political events can heavily influence how well a publication sells and thrives.

Unfortunately for magazines the rise of quick social media in the last decade has heralded the decline of magazines as a viable source of information and media. Readers these days prefer to get their information quick and on the spot. Why spend money on a magazine that you would read once or twice and then never touch again when you could just take you phone out of your pocket, check Facebook or reddit, and have the same information in seconds and for free? While I doubt magazines will cease to exist completely the recent pattern of sales dropping by roughly 3% every year (Pew, 2016) shows that the glory days of magazines and periodicals is almost certainly over.

Works Cited

Clark, Lorren. “Definition of Want vs. Need.” Definition of Want vs. Need | Learning to Give, www.learningtogive.org/resources/definition-want-vs-need.

“Book Publishing.” Book Publishing -, SBDC National Information Clearinghouse, www.sbdcnet.org/small-business-research-reports/book-publishing.

Fuller, Steve.“Topic:Magazine Industry.”www.statista.com, Statista. www.statista.com/topics/1265/magazines/ 

Greenfield, Jeremy. “What Publishing Companies Do in a World Where Anyone Can Publish a Book.” Forbes, Forbes Magazine, 15 July 2012, www.forbes.com/sites/jeremygreenfield/2012/06/27/what-publishing-companies-do-in-a-world-where-anyone-can-publish-a-book/2/#5fc70bc74d3b

Peterson, Valerie. “Overview of the Book Publishing Process.” The Balance, www.thebalance.com/book-publishing-process-2799965 By Valerie Peterson Updated April 24, 2017.

Pew Research Center, June, 2016, “State of the News Media 2016″. http://assets.pewresearch.org/wp-content/uploads/sites/13/2016/06/30143308/state-of-the-news-media-report-2016-final.pdf 

“U.S. Publishing Industry’s Annual Survey Reveals Nearly $28 Billion in Revenue in 2015.” U.S. Publishing Industry’s Annual Survey Reveals Nearly $28 Billion in Revenue in 2015, Association of American Publishers , 11 July 2015, http://newsroom.publishers.org/us-publishing-industrys-annual-survey-reveals-nearly-28-billion-in-revenue-in-2015/.

License

Icon for the Creative Commons Attribution 4.0 International License

Introduction to Media Studies by M. Blair Taylor and David Thrumston is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.

Share This Book