2LT National News

At the end of March 2025, Penguin Random House announced booming sales, with a year-on-year increase of 8.5%. Even better, their profits rose 11.3%.

Reading this, you might think publishing is flourishing, but you will hear a very different story if you ask many Australian independent publishers. They will tell you it’s difficult to cover costs, let alone make profit.

With some data from the Australian Bureau of Statistics and a breakdown of the costs involved in getting a book into your local Dymocks, I can show where some of the troubles lie. Which leads to the question: How can Australia protect its homegrown publishers?

Commonly held wisdom is that books are expensive in Australia. Perhaps in part because of this perception, books have, on average, roughly the same recommended retail price they did 15 years ago.

In the late 1990s, when the Australian Bureau of Statistics started collecting data on book prices, they seemed to be rising in line with the consumer price index (CPI). Since the early 2000s, the CPI has jumped, while books have hovered around the same price.

This is a partly a result of more books selling through discount department stores, which lowers the average price and has led to relative stability in prices. When I started working in publishing in 2008, a trade paperback usually cost around A$29.99; the average cost now is around $36.99.

So, what would have happened to book prices if they had increased in line with the CPI? According to the Reserve Bank of Australia’s Inflation Calculator, a book that cost $29.95 in 2010 would cost $43.22 in 2024.

Over the same 15-year period, pulp and converted paper costs rose 51% and printing costs rose 34%. Wages in general rose 48% in that time. (However, the book editor’s award rate only increased 20%: from $1,007 per week for a book editor grade one in 2010 to $1,205 in 2025.)

In short, it costs much more to make a book now – but as the chart above clearly demonstrates, the retail price has barely moved. More books being sold through discount department stores, such as Big W, exacerbates the issue, so the return for publishers is generally lower per book than it was 15 years ago.

What follows is an indicative (not exhaustive) breakdown of publishing income and expenses for an independent publisher in 2025, for books sold in an independent bookshop. Small presses are less likely to have their books stocked in Big W.

Taking a $36.99 trade paperback as an example, these calculations are based on a 2,000-copy print run: a moderate to ambitious target for a literary fiction title. For ease of accounting, I have left out GST, except on author royalties.

An author receives 10% of the recommended retail price as a royalty rate. So for a $36.99 book, the author gets $3.69 for each copy sold.

The average bookseller discount is set at 47%. (For discount department stores such as Big W, it is often over 50%.) This means a publisher would receive $17.70 for each copy sold. From that, the publisher pays for editing and design, printing and distribution. For the purposes of this exercise, I am assuming this is 19% of the money the publisher receives from the booksellers. This is a modest percentage; it can be as high as 30%.

A sell-through of every printed copy is a publishing unicorn – you can imagine it, but it doesn’t exist. Inevitably, copies will be damaged in transit. And because of the sale or return policy, which allows booksellers to order copies on the understanding they can return them if the books do not sell, the tendency is for booksellers to do at least some over-ordering.

If a publisher sells 80% of the print run, the income would be $5,274. With their income, a publisher pays for overheads such as salaries, rent, insurance, purchases, software and hardware. They will also pay tax.

If they hired a freelance publicity or marketing firm, they would be in the red. If the book needed to be legalled for potential defamation suits, they would be in the red. If there were photoshoots and permissions to reproduce song lyrics, or an extra round of design or editing, they would be in the red.

For ebooks, the story is different. The publisher will have covered all the production costs. Without the printing, the margins are better. There is a negligible conversion fee, of around $200. The distribution and bookseller slices of the pie are smaller.

Author royalties on ebooks are higher as well – usually 25%. There are no returns, so each sale represents income. For a literary fiction title, the sales may be around 200 copies. If this is the case, the publisher’s income on an ebook priced at $16 would be just over $1200.

In some genres, ebooks dominate. But for the books independent publishers release, the income is usually modest – unless the title wins the Miles Franklin Literary Award, in which case they may sell a few thousand ebooks, or is set on school curricula, which means sales in the hundreds or low thousands each year.

Clearly, the numbers are not adding up in a sustainable way for the publishing industry. This poses the obvious question: can small local publishers continue to make books?

The short answer is yes. What follows are some paths to that future.

The above heading is enough to rouse fear in the hearts of publishers and booksellers alike. If book prices go up, will customers still buy books?

It is one thing for a punter to wear the increase in the cost of a cup of coffee, which has been rising incrementally, although may jump up in the next few months. It represents a much smaller chunk of their fortnightly wage than the price of a book, especially in a cost of living crisis.

As a cautionary tale, we can look to another entertainment industry. Of course, books and films are different. Books make good presents, they can be passed on and usually read in a few sessions, but both are forms of entertainment or education that punters buy.

The cost of the average movie ticket has increased 27% in the last ten years. In the same period, the number of cinema-goers has declined.

In the past year, three smaller Australian publishing houses – Affirm, Text and Pantera – have merged with bigger companies, perhaps reflecting the stresses shrinking margins are exerting on the local industry.

A large publisher, such as Penguin Random House, can negotiate competitive print prices and manage its own warehouses. This means the distribution costs are lower on a per-book basis. Profit margins can be more favourable than for smaller houses.

A big company views a merger as a quick way to increase market share and acquire backlist titles. For a small press, a merger can relieve cash flow and margin pressures. The concern for authors, and by extension literary agents, is that more mergers can mean fewer publishers, fewer publishing opportunities and less championing of local culture.

Word of mouth has long been the most effective marketing strategy for books, but it is time consuming to orchestrate.

Historically, publishers have alerted readers to books through traditional media, publicity and marketing campaigns, and “co-op” with booksellers – where the publisher pays for prominent shelf space or places in customer catalogues. In exchange for a fee, a publisher might guarantee a small image of the book’s cover, an abbreviated blurb and placement up the front of a shop – a common practice with chains such as Dymocks.

These ways of reaching readers are still viable, but as media markets are increasingly splintered, the influence is diluted.

One successful option for authors with large followings is to hold events in collaboration with booksellers, where people can buy a ticket and book combo and meet the author. Such deals are only feasible for authors with existing name recognition, even more so if they also have their own social media presence.

These events often require production support and venue-hire fees. They usually only support new release titles, rather than creating a longer-term sales channel. The sticking point is that the authors who can draw a crowd are also usually able to sell their books without the help of booksellers.

For small publishers, another option is selling to readers directly, either through subscription models or through their websites, as the newly created Australia Institute Press (where I am managing editor) has been doing.

This involves postage and handling and additional accounting. But it means that, aside from printing costs and staff time, the return on investment can be as high as $20 for a $36.99 book. The difficulty with such a model is the exclusion of booksellers and the symbiotic relationship between independent booksellers and publishers that has underpinned the industry for generations.

Self-publishing, where authors either do the work themselves or engage others to produce the book – a system of publishers-for-hire – continues to grow. In the recent past, this was often seen as a predatory practice. But in a marketplace where authors are expected to bring their own social media following and market their books to pre-existing audiences, the value of publishers and the traditional bookseller supply chain becomes less clear.

The success of these models depends on an author having sufficient resources to pay upfront and on their ability to reach an audience on their own. But for influencers with a large following, or a following they build with minimal costs by publishing digitally, these are not limiting factors.

Literary authors, however, are less likely to have large audiences of their own. With average earnings of $18,200 per year, they are also less likely to be able to afford upfront costs.

For independent Australian publishers to survive, there is one necessary condition that needs to change. The first is greater support from government for the publishing industry. During COVID, the government offered extra funding to support the arts.

As research from Julieanne Lamond and Melinda Harvey showed, the extra funds government given to literary organisations had a near immediate – and significant – effect on the amount of work literary journals published. The return on investment is quick, compared with artforms such as theatre, and the results are easy to quantify.

Funding for the arts in Australia is strikingly unambitious. There is an opportunity for governments to invest in the future of the sector and lay down the infrastructure for future generations. Writing Australia, the new federal government funding body, will be launched on July 1 2025.

The literature sector is waiting to see how much of the proposed increase in funding will support local writers, editors, publishers, designers, publicists and the many people who keep the industry running.

From 1969 until 1997, the Australian government subsidised publishers and printers with a Book Bounty that bolstered the local industry – to the tune of 25% subsidies of production costs for eligible books. Given current market conditions, if we want to ensure the future of Australian publishing, it may be time to launch a new bounty.

For the past few decades, the common wisdom has been that independent publishers develop new talent, which then bolsters the industry and forms each new generation of writers.

McPhee Gribble brought us Tim Winton and Helen Garner. Giramondo first published Michael Mohammed Ahmad. Text did the same for Robbie Arnott and Anna Funder.

Literary prizes in Australia recognise the talent these publishers foster. Five of the six titles on last year’s Miles Franklin shortlist were from small publishers, as are half the books on this year’s Stella Prize shortlist.

There are two campaigns this federal election that endeavour to encourage voters, and by extension politicians, to consider the arts. Books Create Australia is an initiative bringing together sometime allies, including publishers, booksellers and libraries announcing a set of requests. Save Our Arts has some similar requests, including regulation of AI and more funding.

Whether either campaign has an effect on the new parliament remains to be seen.

Australia has bid farewell to manufacturing and other industries, but we cannot produce our culture overseas. Without significant increases in support from government, Australian publishing is headed for further trouble.