In the golden age of print publishing, copy sales were an important source of revenue.

With publishers like Rupert Murdoch building online paywalls for news sites, selling publications to readers, not giving them away, could enjoy a renaissance.

Here’s how copy sales fit in the old school print publishing business model I grew up with.

Print publishers rarely keep all the money from copy sales.

Newsagents, book stores and other outlets sell newspapers, magazines and books. They earn a margin of around 30% of a magazine or book’s cover price.

Margins are lower for newspapers, but newsagents make it up with volume plus they can sell customers extra items with better margins.

In some cases distributors take a second slice of the sales revenue. Either a percentage or a fixed fee per copy.

Sell-through rates

Retailers rarely sell every copy of their newspapers and magazines.

Publishers talk of sell-through rates – that’s the percentage sold. Retailers usually send unsold magazines – usually just the masthead – back to distributors to get a refund on unsold copies. Newspapers are similar. We call the copies sent back ‘ returns’.

Poorly managed titles have a low sell-through rate. Others can have a higher rate.

Some publications sell out – but this is rare. Publishers regard selling-out as a failure because it means they don’t get maximise sales. Newsagents like this because they don’t have to worry about returns.

Returns are controversial with newsagents and retailer because they often have to carry the cost of holding stock on behalf of publishers.

Long established, popular, frequently-published titles typically have better sell through rates than new or irregular publications. That’s largely because publishers have more information to help them plan print runs and know where to send copies.

Revenue lags sales

Copy sales revenue for monthly titles usually takes a month or two to trickle from the reader, through the retailer and distributor back to the publisher.

Printers want payment – or a guarantee of payment before the presses role. So a publisher needs to carry the costs of at least three editions of a monthly title before seeing a penny in copy sales revenue.

This would cost more for weeklies, less for bi-monthlies and quarterly magazines.

Revenue lag explains why so many publishers are keen to sell their titles direct to readers through subscription sales.

Subscriptions are lucrative for publishers.

First, the money arrives upfront – usually a year in advance. Some publications offer two-year and even three-year subscriptions.

Second, a publisher gets to keep all the revenue – there’s no retailer cut – but mailing out subscriptions has a cost attached and there’s a small management fee paid if an external company handles subscriptions.

Have I missed anything here? Do you have any questions about how this works? Please add your comments and questions below or get in touch through my contact page.

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