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Dave Wood's Book Report, Aug. 8, 2007

In June, New York Magazine devoted an entire issue to the economics of running a business in the Big Apple. One business caught my eye. Years back I was hip to what went on in the publishing world, but have fallen behind in my retirement.

The magazine's profile of Random House, the nation's largest publisher was an eye opener.

First of all, it's no longer owned by its New York founders. Nope. It's now owned as a unit of German media giant Bertelsmann. Random House and its 1,500 New York City employees turn out 67 new books each week.

But that doesn't account for its annual profit of $230 million on revenue of $2.3 billion. But the majority of its earnings come from its 33,000 title backlist, which accounts for 80 percent of its profit.

Out of every eight books published by the house, one is very profitable, one is very unprofitable and six either break even or lose money, so the best way to make money is to underpay young authors, who once in a while come up with a bestseller that didn't warrant a big advance.

Newcomers can get as little as $7,000 for an advance, while famous people get lots more, like President Bill Clinton, who received a $10 million advance for his latest book.

Once a book goes to paperback, here's the breakdown of payouts. On a $10 book, $5 goes to the retailer, $2 covers Random House Buildings and staff; $1 goes to paper and printing and binding; $1.50 goes to the author, leaving the publisher with a profit of 50 cents.

What sells and what doesn't? Fiction accounts for 55 percent of Random House sales. How-to, non-fiction and lifestyle: 22 percent. Children's books 20 percent. And Christian 3 percent.

(Remember those proportions would be significantly different if the company were Zondervan, which specializes in religious books. This surprised me the most: Less than 10 percent of its profits come from Top 10 bestsellers, like Barack Obama's "The Audacity of Hope."

So that's the story of Random House. I'm certain other publishing houses have a less profitable story to tell, with the decline of independent retailers and the rise of the huge books stores, Barnes & Noble, Borders and Amazon.

These outfits have a tendency to squeeze the smaller publishers and give bigger profit margins to their fellow giants on the other side of publishing.

I recently received two copies of a literary magazine I'd never heard of. It's called "The Deadly Writer's Patrol," it's full of stories and poems and photos brought back from the Vietnam War, and it's published in Madison, Wis.

Like most such magazines it grew out of a writer's group, this one sponsored by the Wisconsin Veteran's Center in Madison. The writer's group is also called "The Deadly Writer's Patrol," which was formed to help veterans of the Vietnam War give vent to their feelings.

You don't have to be a vet to submit stories and poems to this journal, only someone interested in how that terrible war influenced you, or your country or the folks around you. Here's a poem by DWP member Sara Garrigan Burr, of Middleton, Wis.:

"Forty years ago I met a man

An ex-Marine

Who talked about Da Nang:

How it smelled, the feeling of the air.

"We marched together against the war

And married in Lutheran dignity.

"He cornered the bed sheets perfectly.

He slept with a bayonet.

"My home became part of Da Nang,

A dangerous place where the agitated air

Smelled of dread."


One can also support the effort by purchasing copies of the publication by writing to Deadly Writer's Patrol, P.O. Box 614, Madison, WI 53704.

Dave Wood is a past vice-president of the National Book Critics Circle and former book review editor of the Minneapolis Star Tribune.