Publication no more a profitable industry

VietNamNet Bridge – The golden age of traditional publishing houses is over, and it is no more a profitable business.


Vietnam, publishing house, millionaire, profitable business, online bookstore

Some years ago, people looked at the owner of the Nguyen Van Cu book house system admiringly who always traveled on a luxurious car.

The book house system helped the man, and many other publishing houses get enriched rapidly. However, their golden age is over.

Tre Publishing House was once a resounding name in the publication industry. “Day con lam giau” (teaching children how to get rich) was the book which brought the huge profit which went beyond the expectations. The Vietnamese version of Harry Porter also brought very fat profit. At first, 5,000 copies were printed, but it was reprinted several times, which raised the total number of copies to 100,000.

However, the number of such books which can bring high profit remains very modest. This means that publishing houses cannot pocket big money as people thought.

Quach Thu Nguyet, former Director of Tre Publishing House said the publishing house always had to offer big discounts for book distributors, while its capital has been used by the distributors.

In general, print expenses amount to 20 percent of the total expenses for a book, while the royalty is about 10-15 percent, depending on the negotiations and the percentage of books to be marketed. Meanwhile, the distributors usually charge the account rates of 40-55 percent.

In case distributors pay money at once, they would get the commission of 55 percent, while the publishing houses gets 35 percent in cash and 10 percent in book exchange.

If the distributors only take books on consignment, they would pocket the commission of 40 percent of the selling prices. However, the problem is that the book houses only pay money back after 3-4 years

Also according to Nguyet, in the past, Fahasa, the book distributor, which accepted to take books on consignment, always used Tre Publishing House’s VND8-10 billion for free, and it only paid the capital back after three years.

As such, in the “game,” publishing house has always been put at a disadvantage if compared with book houses.

Having to pay the high discount rates, but publishing houses have to “sit down under an abuse,” because they don’t have many choices. Fahasa and Phuong Nam remain the two biggest book distribution chains in Vietnam. Nguyen Thi Minh Khai and Nguyen Van Cu are smaller. Because of the high discount rates, publishing houses can pocket five percent of profit after paying expenses.

Foreign publications in Vietnamese versions prove to be more favored by readers. In general, publishing houses have to pay $1,000 for the royalty, which means that it needs to publish at least 3,000 books to break even. If the books sell slowly, the publishing house would incur loss.

Sources said that a publishing house has had to sell its business license after a long period of incurring loss. Since its capital was appropriated temporarily by book distribution chains, the publishing house incurred the loss of VND200 million a year on average.

Nguyet believes that Tre Publishing House is one of the very few publishing houses which can exist, because it also has a distribution network of itself, which means that it can control the outlet of the products.

NCDT

Vietnam, publishing house, millionaire, profitable business, online bookstore
 
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