Your Assets The Editorial Process

L 6

Ing. Jiří Šnajdar 2014

Your Assets

Like all other businesses, publishing companies, whether one-book firms or Goliaths, are ultimately deemed successful or not by whether they are profitable and how much they are worth when they are sold.

If you approach your business with these two key factors in mind, then every decision you make will help incrementally build your company for success, which can be defined as its positive future value.

What are the assets of a publishing house?

As we saw in relation to the balance sheet, they consist of:

• Cash• Accounts Receivable• Inventory• Prepaid Assets• Plant and Equipment• Intangible Assets• Prepaid Assets

While protecting most of these—cash, accounts receivable, protecting cash and accounts receivable needs some attention and protecting intangible assets needs substantial explanation.

Cash and Accounts Receivable

While protecting cash and accounts receivable would seem obvious, it’s always amazing to see how few smaller publishers actually have systems in place to ensure the security of these assets and how little thought is given to this critical task.

It is up to you, as manager of your company, to set up the procedures to secure your cash and receivables.

These procedures must account for opening the mail, handling cash, recording the receipt of checks and cash, getting that money to the bank, reconciling the bank account, and writing your checks.

The key idea to remember is that the same person must not be responsible for all of these functions.

One person tallies the cash and checks for deposit into the company’s bank account, and another posts them to the accounts.

A third person should then be responsible for tallying the same money, and the two tallies should be the same.

Your auditor or accountant will be able to reconcile your revenues with your bank deposits so you can be sure the two are equal.

Remember, the person writing the checks must never be the one reconciling the bank account!

If your company is doing $5 million or more annually, seriously consider having a formal audit.

Intangible Assets

When discussing intangible assets, you should immediately say there is a difference between the accounting definition of intangible assets and the legal or everyday definition of this term.

In accounting, , as noted in discussing the balance sheet, intangible assets refers only to what is called goodwill, or that amount received for the company when it’s purchased, over and above its book value.

The most important intangible assets for a publisher are contracts and copyrights, which protect the publisher’s work from plagiarism and

other forms of infringement.

For this reason publishers must ensure they have contracts guaranteeing them the right to publishers for the life of the copyright.

Whether the copyright is in the publisher’s name or the author’s, the publisher must have the right to publish the work transferred to it through the wording of the contract.

How much are copyrights worth?

If the book is a perennial seller, that one copyright alone may be worth more than the company itself would otherwise be worth.

You need systems in place to secure your assets. Your strategy as a publisher must be to build asset value.

Your strategy as a publisher must be to build asset value—and the best way to do that is to publish books that sell well over time.

As the number of those books grows, your asset base grows—assuming you hold the contracts granting you publishing rights for as long as the book remains in print.

One can never tell what book may be the one that will be worth more than the others combined.

The publisher must always keep in mind why he’s in business—to increase value or, if a not-for-profit, to at least break even while increasing the value of the mission and the organization’s assets.

Copyrights  The best way to protect your copyright assets is to register your books with the Register of Copyrights. You should register every book you publish and insert a copyright notice on the copyright page of your book. Registering your copyright with the Copyright Office helps avoid this

problem.

Copyrights  Because the act of copyright involves any number of legal points so is better to leave it to your attorney.

The symbol © (the letter C in a circle), or the word “copyright,” or the abbreviation “Copr.”; and the year of first publication of the work.

For example: “© 2006 John Doe”

One question that frequently arises in relation to copyright is who should register the work?

The law stipulates that it can be done by any of the following:  

The author, The copyright claimant, defined as “either the author of the work or a person or organization that has obtained ownership of all the rights under the copyright initially belonging to the author.”

This category includes a person or organization who has obtained by contract the right to claim legal title to the copyright in an application for copyright registration. The owner of exclusive right(s). The duly authorized agent of such author, or owner of exclusive rights etc.

Copyrights  

The key point is that if the registration is not made by the author, then that author must transfer the rights to another party, who will then be able to file for copyright.

This transfer is done by contract. Almost all publishing contracts have wording that specifies that the author transfers the right to publish the work to the publisher for the duration of the contract.

Contracts

Every book you publish should have a signed contract giving your company the right to publish that book. Contracts provide the primary value to a publishing house because they give the house the many and varied rights needed to produce and sell the book in question. Without a contract, no publisher should publish a book, unless all aspects of the book are in the public domain; that is, if the time of copyright has expired and the book can no longer be copyrighted.

Contracts

A key provision of most contracts stipulates that the publisher can assign that contract to any company that buys the assets of the Publisher. It is the contracts that permit the publisher to publish, that give value to the publishing company.

Thus it is absolutely critical to protect all aspects of your contracts and to get the broadest grant of rights you can.

Publishers who are also authors should have a contract for each of their books. The reason is straightforward.

Contracts

As we’ve seen, companies can buy and sell their assets to others. This includes inventory as well as contracts.

Although you may or may not earn much from your works, it’s impossible to know what the long-term success of a book might be.

The Editorial Process/ Content Management

Most of the time, the easiest way to manage is to standardize the processes people use to make decisions.

One excellent way to provide organizational structure to your staff is to set up templates that can quickly determine and illustrate whether certain functions meet the criteria that have been agreed upon.

Editorial Category Planning

One of the most essential requirements for any publishing company is to know exactly what is being published and when it is due to be published.

In publishing as in many other businesses, there is a very fine balance between maximizing your revenue and optimizing your cash flow. In publishing, cash-flow concerns are inextricably related to the acquisition process, , necessitate spending money out of pocket for author advances and manuscript purchases.

The fact is, author advances may be necessary years before a manuscript might be finally submitted.

Editorial staff, indexers, art and photography, permissions, all must be paid, in most cases, prior to the book’s on-sale date.

Paper, printing, and binding costs also must be paid on time to maintain one’s credit standing with manufacturers.

For many publishers this means payment within 30 days of completion of the job.

Your editorial program is the basis of your cash flow.

The primary planning objective is to allow enough time to write and produce your book while at the same time minimizing the time you are out-of-pocket for cash. How much time is enough time? How much time should you leave between the time of signing the contract for a manuscript and the time it’s published? At least 24 months. Between the time you sign a contract for a book and the time it’s published, a variety of tasks must be performed to ensure that the book will generate as much revenue as possible.

Editors must have time to work on the book to ensure its accuracy and quality.

Sales and Marketing need to know exactly what books they’ll be selling in the next season, and preparations for the next season usually begin 12 months in advance.

Subsidiary-rights people must get manuscripts and jackets to begin to generate serial-rights sales, book-club sales and other rights sales.

Serial rights are broken down into first serial, those sold prior to a book’s publication; and second serial, those sold after a book’s publication.

How much time do magazines and book clubs need?

Most magazines schedule their feature articles about six months in advance of publication. A publisher trying to sell these buyers, you must show them material six months to one year in advance if you are to be consistently successful.

If we look at editorial acquisition as a flow chart, ideally it would look like this:

Mission Statement 3-Year Editorial Plan

Manuscript Solicitation Editorial Meeting

Title Profit-and-Loss Statements

Proposal Meeting Contract Negotiation

This is where the 3-Year Editorial Plan comes in.

The easiest way to view your current and future editorial program is to do so by category.

You have defined your program and are now focusing strictly on the categories in which you have special knowledge or expertise or on those in which you know there is particular opportunity.

The time periods should conform to your selling seasons, which may be annual or semiannual, usually spring and fall.

When you’ve decided on the time periods, place those titles you already have under contract in the time period in which they’ll be sold.

If you have only one book, it probably means you’ll have to focus on finding distribution and finding new titles, because most distributors or sales rep groups won’t take on one-book publishers.

If you’re publishing more than one title, are they in the same category?

In the same selling season?

Can you combine your selling and marketing efforts to achieve savings or maximum return for your promotional effort and dollars?

If you have books in more than one category, do you have the marketing budget to support each book?

Keep in mind that to the outside world, your niche is defined primarily by the continuity of your editorial program.

the 3-Year Editorial Plan allows you to see your overall program succinctly by category.

With this in hand, you will know exactly what slots need to be filled and when you are long or short on books within categories, seasons, and years.

To identify promising areas and subjects for new books, areas that may be overpublished, and subjects to avoid, use a simple technique.

Drop into four or more of your local bookstores, both chain stores and independents.

Supplement this with visits to online databases.

Approach all of these using a simple Comparative Book Template.

The object of the template is to centralize and organize similar title information so trends become visible.

It is based upon those titles currently stocked on a random selection of bookstore shelves as well as those titles that are currently being sold and announced.

Each Comparative Book Template should be used to focus on one subject category, using as many pages as needed.

Each Comparative Book Template should be used to focus on one subject category, using as many pages as needed.

• title • author • publisher

• price • number of pages

• price per page • color or black-and-white • size of book • copyright date

• special features • format

Once the template is completed, you can review it to see:Who are your competitors’ current authors? Are they well known?

Is your subject category highly published, or are there few books on the shelf? If only a few, why?

Who are the dominant competitive publishers in the subject area? What are they doing right?

What is the average retail price of hardcovers and paperbacks that are on the shelf? How should you price your book relative to this: higher, same, or lower?

What is the ratio of hardcover to paperback books within the subject category?

What is the average price per page (retail price divided by the number of pages)?

What do the jackets or covers look like? Are there similarities?

What buzzwords are used on the jackets or covers that might apply to your books as well?

Is there a book size that is fairly standard (such as 6" x 9") or do formats vary?

How many titles have copyright dates that go back more than two years?

Which are in second editions or higher?

Are there special features that are particularly attractive and that might work for your book?

After reviewing your findings, apply them to your own books.

Now you can make much more informed decisions than you could before you started this simple, straightforward, rewarding process.

Editorial Acquisition

Manuscripts come from a wide range of sources.

Today, larger houses rarely read unsolicited manuscripts, leaving it to agents to screen material for the house.

This leaves some room for the smaller house willing to spend time mining for gold.

Internally Generated Manuscripts; Work-Made-for-Hire. A second way to acquire a manuscript is to have an idea, flesh it out, and find someone to write it.

Another way to accomplish this same thing is to do everything within your own company, creating the project as a Work-Made-For-Hire, which means you’ve paid someone on staff to write the book and your company owns the project’s copyright and all other rights.

Meetings and Seminars.

Another way to get manuscripts is to attend meetings and seminars on topics of interest to your publishing program.

Agents

Agents are an excellent way to get material.

Don’t forget that agents work for authors. Agents also must sell books to stay in business.

How do you get manuscripts from agents?

You simply let them know what kinds of books you are interested in publishing. Try to find those agents with a stable of authors writing in your subject area.

International Publishers

The largest book fair in the world is the Frankfurt Book Fair, a huge international rights fair, held each October in Frankfurt, Germany.

Here, rights to hundreds of thousands of titles on every conceivable subject, in every language, are available for copublication or rights purchase.

If you make the effort to meet publishers in other countries, you’ll be surprised first at how receptive they are.

Editorial and Proposal Meetings

Once you’ve begun to generate a flow of manuscripts, you must apply your own editorial judgment to those submissions.

You can’t and don’t want to publish everything that comes through the door.

The first step in this editorial process is to pass the manuscript to an editor for his or her review. If the editor agrees that the manuscript is worth pursuing further, then it should be discussed at an editorial meeting.

That is, how good is the manuscript?

Is it well developed?

What are the weak points?

The strong points?

Are there competitive books on the market?

What are the author’s credentials for writing the book?

The proposal meeting, on the other hand, augments the editorial meeting because at the proposal meeting, sales and marketing provide input into how the manuscript or proposal under consideration will fit into their programs.