Publishing’s Little Secret: It’s All Gambling

Inside the Literary Casino That Publishes What You Read

In 1866, Fyodor Dostoevsky published The Gambler, a manic little novel about a young Russian tutor entranced by the whirl of the roulette wheel the clickety-clack of the dancing ball. The drama turns on how a man can understand the the odds and yet still reach for his chips, how quickly he can lose his senses and succumb to his passions.

Dostoevsky, an unlucky gambler himself, knew the experience down to his nerves’ frayed ends. He’d been losing at roulette for several years when he agreed to write The Gambler under a murderously tight deadline. Why? To settle his debts, naturally. He dictated the novel in a three-and-a-half-week sprint to a young stenographer named Anna Snitkina. It worked out. He delivered the book. Better, he and Anna fell in love and married.

But we have to pause and chuckle, right? A book about gambling, written to pay off gambling debts: It would be neither the first time nor the last that publishing and betting found themselves amusingly enmeshed.

Photo by Hush Naidoo Jade Photography on Unsplash

Spin the Wheel

A slow learner, Dostoevsky felt drawn to the tables. During a four-year exile in Europe the newlyweds haunted the casinos of Baden-Baden, Homburg, and Saxon-les-Bains. The author had a system, or thought he did: stay cool, stay patient, ride out the losses—the big win was just around the corner! Sometimes it was. He once trotted home with a bag of gold coins. But he couldn’t stop when he was ahead and blew it all just hours later.

Anna didn’t know what to do. The couple pawned everything, even Anna’s wedding ring and underwear—all so Dostoevsky could bet one last time and finally pull them out of their ever-worsening predicament. Friends took pity and extended loans. Dostoevsky lost most of that too.

While some folks still squander their worldly wealth at roulette, today significantly more gamble from their living-room sofas. We have apps for that. It’s hard to scroll more than a dozen posts on X before running into someone complaining about the problems of sports betting. But have they ever considered publishing? It’s a $100 billion dollar industry, and it’s all gambling, all the time.

When people discuss the dollars and cents of publishing, they refer to the “business model.” What they fail to realize is that there’s very little business and even less model. Publishing is, at its most basic, betting. What Dostoevsky did for a thrill at the gambling halls, I used to do for a living at Thomas Nelson. Once you see it for what it is, the whole enterprise makes a lot more sense.

Every Book Is a Bet

The fact that every single, individual book represents a unique product makes publishing structurally different than almost any other consumer business. Chevrolet can consult decades of truck sales and make reasonable projections about next year’s Silverado. Maytag can crunch sales figures and forecast demand for their next washer. These companies sell consistent products into consistent markets with piles of usable data.

Publishers have none of that. Every book is a one-off and behaves accordingly. An author who moves 100,000 copies of a title may sell just half that on the next—after bidding up their advance based on their prior success, of course. A genre that sizzles one year may cool by the next loop around the sun. No truly reliable data on trends exists because there’s no consistent product from which to derive it. The closest anyone gets is a guess draped in a spreadsheet.

I saw this play out every day when I was in publishing. Here’s an example. We had an author who’d been with us for years. Every book he published sold at least a quarter million copies. Reliable as gravity? So it seemed. He eventually grew dissatisfied; like any author, he wanted his publisher to do more. A competitor sniffed an opportunity and swooped in with a massive deal, convinced they could do more with his books than we had. And who knows? Maybe they could. The author figured it was worth a try. Why not?

But when the new house released the first book on the contract—a two-book deal—it sold about a tenth of what he’d been moving with us. The loss was so severe the publisher canceled the second book in the deal. After a few years, the author found his way back to Nelson.

So, why did the publisher flush all that money? They made a lousy bet. They looked at the author’s sales history and told themselves a story about how they could outperform it. Maybe they could, all things being equal. But nothing is ever equal! They studied the data, built their projections, and convinced themselves their investment was sound. It wasn’t, but not because they were foolish; it’s because there is no such thing as a sound investment in publishing. There are only bigger and littler bets. This was a yuge bet, and they lost. Happens all the time.

In one form or fashion, every publisher sits in the same position, gambling on a thousand variables they can’t control. The only question is how much you’re putting on the table.

A Thousand Variables

What determines whether a book flies or flops? The honest answer is that nobody fully, truly, actually knows. Publishers create pro formas or P&Ls for each book to spec out the basics: projected sales, per-unit price, print and design costs, marketing spend, author royalties, and what have you.

But that’s only a partial inventory of the variables. Here are a few more off the top of my head:

• the ups and downs of the economy and whether consumers feel loose or tight with their pocket money;

• competing titles releasing the same week or month;

• the author’s platform and whether it’s growing or shrinking;

• whether the author’s last book disappointed readers;

• how long it’s been since the author’s last release;

• the author’s skill in an interview (some can’t talk their way out of an open double door);

• whether the author is getting hammered for something real or bogus in the media;

• whether a news event breaks that either complements the book or drowns it like a cat in a burlap sack;

• the state of the author’s personal life—health, marriage, kids, all the rest—and whether they can show up for the launch;

• whether the author is willing to promote at all (some aren’t—it’s weird);

• title and packaging, which is judged in a nanosecond by someone scrolling on their phone at a stoplight;

• the price point relative to the competition;

• format and whether the publisher guessed right on hardcover versus paperback;

• internal enthusiasm at the publishing house, which directly affects marketing spend and sales-team energy;

• the publisher’s relationship with key accounts and how hard the reps push this title versus the fifteen or twenty others on their seasonal list;

• retailer enthusiasm and shelf placement;

• whether the publicist has the right media contacts for this particular book;

• whether a major media figure, podcaster, or influencer takes a liking to the project;

• the quality of the book’s metadata and discoverability online;

• consumer reviews in the first week;

• supply chain timing and whether books are actually in the warehouse when the orders come in;

• print-run accuracy and whether the publisher printed too many (returns) or too few (missed sales);

• whether the book lands on any bestseller lists early enough to generate momentum;

• word of mouth (which is essentially uncontrollable); and

• the merciless gods of chance.

Of course, there are more. Not to mention the book itself. A brilliant idea can fail miserably in execution. But, hey, there’s a budget number attached, so it’s the editor’s job to polish the turd and send it to print, preferably on schedule; you don’t get to book the revenue till it ships.

No pro forma can account for all of these. Some are within the publisher’s control, some not. The spreadsheet creates a feeling of rigor, but it’s essentially an encouraging story with decimal points and percentages. Of course, that doesn’t stop anyone from producing the spreadsheet. It’s helpful for what it does.

Rituals of Risk Mitigation

Whether they admit it to themselves or not (“the first step is to admit you have a problem”), publishers know they’re gambling, and they’re not stupid. To compensate for the wild uncertainties of the trade, they’ve developed sophisticated ways to mitigate the risks, or at least get cozy with them.

Consider comp titles. Authors, agents, and editors include these in proposals to demonstrate that similar projects have previously succeeded in the market. The stated reason for comps is to map the competitive landscape: What else is out there? Who’s the audience?

But the more practical reason is to conjure a number you can finger and say, “The market absorbed 20,000 copies of something like this, so our bet isn’t crazy.” What the exercise misses, however, is that the comp had a different author, different cultural moment, different cover, different marketing, different luck, different everything. But comps can offer a story to woo and wow your pub board, and a good story goes a long way in a business built on stories.

Or consider platform, the size of the author’s audience. A big platform feels like a sure thing. You’ve got built-in followers, plug-and-play leads, reduced risk. But audience size and platform reach don’t guarantee an author can actually convert followers to buyers. It doesn’t account for topic mismatch, or the gap between people who’ll linger on Instagram and people who’ll spend $28 on a hardcover. A big platform is a better bet, but it’s still a bet.

None of this is, by the way, useless. Real information comes through comp titles and platform data. They just provide far less certainty than anyone would like. They exist less to divine the future than to give stakeholders sufficient confidence to roll the dice.

Sizing the Bet

As uncomfortable as it is for authors to hear, publishers sometimes think of their authors in tiers. You’ve got A authors, those at the top of the list, the ones who reliably move large volumes and are deemed worthy of serious commitment. Then there are B authors, who perform dependably but at a lower level, and C authors, who sell modestly but are still worth publishing because the ideas are good and the economics work at a smaller scale.

This is essentially bankroll management, the gambler’s art of sizing bets to expected returns. You don’t pay a B author an A author’s advance. You don’t pay a C author a B author’s advance—unless, of course, you think you’ve spotted a breakout, which is just a euphemism for long-shot. Every acquisitions editor has a few of those stories, the books that hit big against the odds. Those are the projects that keep you at the table. They also have the opposite stories, the big bet that went sideways. Those are the best days in publishing!—and the worst.

I’ve been out of acquisitions for a while now, but I gather from industry reporting that the B tier—more affectionately known as the midlist—has been thinning out like the hair atop the head of a middle-aged man. Kensington Publishing CEO Steven Zacharius says the business pretty much looks all A’s and C’s at this point: a small number of bestsellers and everything else.

This means the stakes at the table are higher now than they’ve ever been. Roughly 60 percent of total profits come from just 4 percent of books, according to testimony in the Penguin Random House antitrust case. Only about a third are profitable at all. That maps to my experience, where the received wisdom was that about 70 percent of books lose money.

Risk mitigation explains why advances are shrinking for what’s left of the B authors and the ever-growing number of C authors. If you’re chasing mega bestsellers with the biggest bills in your purse, you can’t simultaneously give those dollars to everyone else with a book proposal. They teach you opportunity cost in Econ 101; you get to try it on for size in the acquisitions process.

As a publisher, you’re either making a huge wager or tossing petty cash at the wall to see what bounces. Both are forms of gambling. The vast C tier is where publishers and editors try their hand at speculating. Stay cool, stay patient, ride out the losses—the big win is just around the corner!

When the Fever Strikes

If you want to see the gambling at its most vivid (and entertaining), watch one of those big-bet authors go to auction. When multiple publishers have a jones for the same project, savvy agents pit them against each other. Your pro forma might justify an advance of, say, $250,000 for a particular book. That would already be a substantial bet, but the numbers work, or at least seem to.

Here lies the trouble. Every other publisher at the table can arrive at roughly the same math. Comps, platform data, sales projections—they all point to a similar ceiling, plus or minus. But then one of the participants decides to jump to $300,000, or $350,000.

Now nobody’s pro forma supports the bid. But as the stakes soar, reason sinks. Dostoevsky’s already twitching somewhere in the hereafter. Maybe, they rationalize, they can beat their own projections. Maybe the book doesn’t have to earn out its advance to be profitable (a book doesn’t, by the way, which is one of the industry’s more soothing pieces of self-consolation). Maybe they frame their bid as strategic move to bring a marquee author to the list. They tell themselves a story, and as long as their acquisitions budget can absorb the risk, they push forward.

And then? The other players do the same thing. When the agent announces the new high bid, every publisher has to decide whether to match or raise. They look at their own spreadsheets. The numbers stopped working at $250,000, and maybe that was already a stretch, but now they need to beat $350,000. But getting this author, this book, would be such a coup! So they get permission from whoever holds the purse strings. They come back at $400,000.

Then, maybe the agent says, “We can take this off the table for $500,000.” Bids are still coming. Now you’re double what your pro forma can justify with no rational path to ever recoup. But the race is on, and everyone keeps pushing chips to the center.

How high does it go? The bidding continues until the author has reached whatever ceiling the dynamics of that particular auction will bear. Usually the author goes with the highest bidder, though not always. The important thing to keep in mind: Every player around that table was prepared to risk money they couldn’t fully account for. And nobody lost a minute of sleep over it. Because this is Thursday in publishing.

How Do You Feel About It?

At Thomas Nelson, the acquisition process had a formal structure that resembled careful financial governance. It was at least defensible, even responsible, given that we were putting company money on the line. I could sign books up to a certain advance level on my own authority. Above that threshold, I needed sign-off from my group publisher. Higher still, I needed the CFO. For the biggest deals, I needed both the CFO and the CEO.

Here’s what that looked like in practice. The sales team would provide unit projections for their accounts—how many copies figured they could sell into particular retailers. Those numbers flowed into my pro forma, along with all my various expenses, including printing costs and proposed author advance. I’d work the variables until the math came together. An analyst would vet the numbers and sign off. The pro forma would then go to the CFO for approval.

The analyst I typically consulted had worked in publishing since before Moses floated the proposal for the Pentateuch. He would look over all my numbers carefully, reviewing every line. Then he would ask me a simple question, possibly the most important in the whole process: How do you feel about this deal?

He asked because he understood—probably better than anyone in the building—what the numbers were actually worth. The sales team’s projections might be genuine. Then again, sales might have felt pressure to give me numbers large enough to justify the advance necessary to win the author. Likewise, they might commit to a robust forecast today and quietly revise it downward tomorrow.

The analyst had seen enough deals to know that the entire apparatus of financial review—running the costs, building the pro forma, checking the break-even, securing the approvals—served a real purpose. But it wasn’t to eliminate risk. The point was to force me to confront the risk. We both knew we were belly forward at a card table, and he wanted to know if I liked my hand.

A publishing house is not a casino. The odds are worse. Some houses go under or get bought up. But they’re essentially in the same trade. Yet the industry rolls on because some books hit even when others flop. The wins fund the losses with enough leftover to keep the shareholders happy. And the promise of the next big score keeps everyone at the table—publishers, agents, authors, everybody else. Not a bad way to run an industry, honestly, but I don’t think it’s how most folks assume it’s run.

The Gambler’s Return

Late in life, Dostoevsky finally kicked his addiction to roulette. He had Anna to thank for that. She took control of the family finances, managed his publishing affairs, even became his publisher, and created the stability he’d never been able to build on his own. But it’s worth noting that Anna, by becoming her husband’s publisher, merely swapped one form of gambling for another.

I think about that sometimes: the unlucky novelist who wrote the book on gambling, married the woman who saved him from his vices, and then watched her make a fortune placing bets on his next manuscript.

We can all blow on our dice and hope for the same.

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