TL;DR version: go big or self-publish.
(The following was written to help me think through the possibilities for a couple of project I’m involved with. It may or may not be useful to others. Also, none of the following takes the need to diversify into consideration which could completely change the picture. As always, YMMV. And ‘book’ for the purposes of this blog post is any project, digital or print, that is primarily intended to be read.)
If you’ve written a book, there are basically five things you can do with it.
Put it in the drawer and forget about it.
Give it away for free online and see what happens.
Shop it around to a small or medium-sized publisher (easier access than to a big publisher but less potential upside).
Shop it around to big publishers.
You could get yourself an agent to help with 3 and 4 but you’re also more likely to find an agent if you already have an offer or a firm interest from a publisher. (Shades of Catch 22, I know.)
Self-publishing has been around for a long long while and it’s often been a very effective tool if you were targeting a well-contained community.
Comics, are a good example, once they switched to the direct market. Book markets in small countries, like Iceland, have long had a small enough retail network to have been manageable for a single person, even back in the dark days before the internet. And, of course, the web, ebooks, print on demand, and the like have opened up the possibilities. Both then and now, the better you know the people you hope will be your readers, the more viable (or even lucrative) self-publishing is.
Based on the meetings I’ve sat in on and the research I’ve done, I’d say that there are five kinds of unpublished books:
Books that aren’t likely to ever make money for a publisher. These are books of a type where there is an abundance of data, all of it negative.
Books that will probably make money but not enough to interest big publishers. They have an opportunity cost that smaller publishers don’t have; for them the money spent promoting a mid-list title would have bigger returns if instead it was spent on a likely blockbuster or bestseller.
Books that are likely to make lots of money. These are likely to attract big publishers and they will outbid the smaller publishers or bid them to a point where they don’t have the resources to recoup their expenses. Big publishers are really good at taking books that are selling well and giving them the promotion and reach to sell even more. That’s why it makes sense for them to buy up the rights to already bestselling novels and authors and pay more for them than you can afford. If the smaller publisher gets a lead on one of these titles before a big publisher, they’ll try to get a deal as quickly as possible and a sensible author will try to get an agent as quickly as possible.
Books for which there is little data around that will let anybody predict either way. (‘Known Unknowns’.)
Books that are likely to garner prestige (either awards or critical accolades) but unlikely to be interesting financially.
Most books that are actually published (self- or traditionally) belong to the first category.
Most first time authors belong here and it takes a lot of work to break out of it. That means blogging, self-publishing, articles, short pieces—anything that builds an audience or connects you to a community.
A big wrinkle is that there are substantial risks with going with a publisher for these writers. There are a lot of outfits out there that like to exploit authors in this situation. What’s worse, a lot of publishers who are reasonable, useful, and valuable to other groups of writers are ruthless and exploitative to this group, e.g. Penguin Random House’s Author Solutions and similar services as well as some of the ebook-only lines that many publishers have.
These exploitative deals can even coexist with more fair ones within the same publishing imprint. One author has a reasonably fair contract while the next author gets exploited.
So, for your average first time author, it’s impossible to tell from the outside whether any given publisher will change your life or ruin it. Which is kind of the definition of a risk you just shouldn’t take.
The second category is the safest bet for a mid-sized publisher but there they face intense competition with self-publishing.
If they pay a substantially lower share than self-publishing they need to back it up with sales, distribution, and marketing because those are the only things the prospective self-publisher can’t easily hire on their own. And even that could easily change. Even if the publisher does have excellent sales and marketing capabilities it only makes sense to go with them if they can substantially expand the book’s reader-base.
Given how much of a lower percentage the author tends to get from a publisher per sale and the uncertainty of being able to convert a casual reader into a regular, the author needs to be certain that the publisher can at least quadruple the book’s reader-base before it makes sense to go with them. Since few smaller publishers have that sort of marketing leverage and since big publishers are increasingly only interested in prestige projects or likely bestsellers, that makes self-publishing the strongest option for a lot of authors.
If all the publisher is doing is package up the services of printers and freelancers, leaving all the marketing to the author, then they are going to have a really hard time competing with self-publishing. The more it looks like that’s all they are doing, even when it isn’t true, the harder it will be for them to get authors to sign on.
One possible exception is if the book in question is likely to be expensive and complex to produce. But modern technology is reducing the capital requirements of these books every day. Still, the more complex the production, the more value an experienced publisher adds to the whole. Then again, the more complex the production, the more hesitant publishers are to buy it. (If it sound like I’m waffling and uncertain in this paragraph, that’s because I am.)
If the author is looking to spread a message or participate in a public discourse, giving the book or substantial parts of it away for free is pretty much essential and that usually means self-publishing. If they really want to go with a publisher for added credibility, they need to find one that is open to the benefits of free. That means either a small/medium publisher or a big publisher who considers the book to be a prestige project.
Third category. Most of the authors who have books in the third category know it. They have a proven track record (prior hits), a strong ‘platform’, viral popularity, or something else that makes publishing the book a no-brainer. The same principle applies here as earlier: go with a publisher if they can reach a substantially larger reader-base than you can on your own, otherwise self-publish.
Most of the major successes for small to medium-sized publishers will come from the fourth category. Because there aren’t any precedents, big publishers will usually avoid them so they won’t bid up the price. Because they are new and strange and original, self-publishing is less likely to be a clear-cut option. Most titles in the fourth category won’t sell at all but if you’re looking for potential outsized wins, it’s the only category that a publisher can reasonably assume has undiscovered bestsellers and approaches that haven’t been tried before.
The casino strategy that is the standard course for most publishers is a severely flawed one. It’s the business equivalent of getting VC funding and then just using it to buy lottery tickets. But if it is your strategy and you don’t have the resources to go head on against the big publishers, the Known Unknowns in the fourth category are your strongest bets.
From the author’s perspective, publishers offer even fewer advantages for these titles than they do to the others. The more original the project, the less the publisher has to offer. Their production systems will be less relevant. Their PR and marketing will have less of a clue about what to do. Their editors are just as likely to screw things up as they are to help. For a publisher to offer value to and benefit from ‘Known Unknowns’ they need to be structured and organised to do so from ground up. They need the ability and the data-crunching skills to tell the difference between titles from the first category and the fourth one. They need a production system that is designed to favour flexibility and adaptability over optimisation and cost. They need to build data-led adaptability into their organisation at every level, from production to sales to marketing.
Most publishers don’t have this, can’t do this, and are unwilling to sacrifice cost optimisations to gain the ability to explore new markets. Which kind of rules them out entirely for this category of books.
Small-to-medium publishers are very keen on books in the fifth category: prestige projects. They are desperate to increase their credibility and reputation as it helps them sign on authors and increases their marketing leverage on their other titles.
These projects are a part of the publishing industry PR dance. They are a public demonstration of a publisher’s willingness to invest in (and probably lose money on) that vaguely defined thing we call ‘quality’. It’s a ritual dance offering public proof that the publisher has resources, capabilities, and capital that others don’t have.
For it to work, there needs to be a fundamental disconnect between the project’s potential reputation and its profitability. Otherwise it wouldn’t be a prestige project but another one of those critically acclaimed bestsellers that tend to inspire bidding wars. It needs to be something everybody agrees should exist or should at least be attempted but few are willing to buy (and even fewer actually read).
This here, is basically the rationale for the entire genre of literary fiction and most, if not all, book apps created by the publishing industry.
The ideal prestige project for a publisher is one that straddles the fourth and fifth categories. Sometimes a project is experimental enough to venture into territory so unexplored that the outcome is completely unpredictable. If it doesn’t sell but is well made, it’s still likely to improve the publisher’s reputation. ‘At least they tried something new and interesting.' If it does sell, the publisher has discovered a new ‘thing’ and has a substantial first mover advantage on follow-ups.
The only real conclusion I’ve come to by going through these vague thoughts and ideas is that for a lot of projects self-publishing is the only sensible option. The only publishers that have a clear demonstrated advantage over self-publishing (resources, marketing, sales) are the bigger ones.
Bigger here is relative, of course. A small publisher who is big in the book’s niche is ‘bigger’ in that context than one of the big multinationals. E.g. if you have a graphic novel, don’t submit it to a publisher who doesn’t have a single graphic novel on their list, even if they are ten times larger than most comics publishers.
And even if you do find a publisher, the industry has created a severe trust issue for new writers by regularly and frequently supporting both toxic businesses like Author Solutions and exploitative book contracts. For the author, the gains need to outweigh the risks.
So, as I said at the start…
TL;DR: go big or self-publish.
(ETA.) A corollary to the above for publishers: unless you can be big in your niche or subject area, you are going to have a hard time competing with self-publishing.