Jim Baen's Universe

The Editor's Page

Columns

April 2007

Written by Mike Resnick

Okay, I hear you ask, how the hell can Jim Baen's Universe pay such phenomenal word rates? Are we just a loss leader for Baen Books?

The answer is that we're not a loss leader for anybody. We intend to make a profit, and I'll show you exactly how. But first let me tell you a little story about the sex industry. (Yeah, I could explain it just as easily without sex, but Topic Number One does tend to capture the attention.)

Move the clock back to 1965 (and how I wish we could – at least when I look in the mirror). I'm a 23-year-old kid, and I've landed my first job in Chicago's publishing industry. None of the legitimate papers or magazines had any openings, so suddenly I find myself editing The National Insider, which is just like The National Enquirer only worse. The first thing I learn is that the only number that matters in my little universe is 41. That's the break-even point. For the Insider to stay out of the red, we have to sell 41% of our print run . . . which is to say that the cost of printing, shipping, distributing, editorial, overhead, everything added together, gets covered only if we sell 41% of our print run, which was about 400,000 back then. (Don't drool; we only sold for 15 cents an issue.)

We were selling about 38% when I took over. I figured that if one naked lady was good, six were better; if one silly story about saucers flying off with Jackie Kennedy was good, four were better; if one Hollywood gossip column filled with innuendo was good, lots were better. And I was right. Suddenly the paper was regularly selling between 70% and 75% every week.

Okay, move the calendar ahead to 1969. I've quit my job and gone freelance. Doing what? Same damned thing. I'm packaging four monthly (and later bi-weekly) tabloids out of my house in Libertyville, Illinois. But there is a huge difference. Now my magic number is 9.

You see, now I am working for Reuben Sturman, the true kingpin of the American porn industry (though my tabloids are his one non-porn publication. We're just sexy, thank you very much.) Now, Reuben wasn't born the kingpin of porn; he was a self-made smut king. He'd been a comic-book jobber in Cleveland in the 1950s. Then one day the major distributors decided they wouldn't handle a bunch of "muscle books"—we'd call them bottom-level body-building magazines today—and Reuben volunteered to distribute them, You know how the New York Times prints "all the news that's fit to print" and the National Enquirer prints the rest? Well, the major distributors handled all the material that was fit to display on your local newsstand or in your local supermarket, and Reuben handled all the rest, especially those with (*sigh*) naked ladies.

And got rich. And started a whole chain of what were known as secondary distribution agencies. When the dust cleared in the early 1960s, there were 65 secondary agencies nationwide, and Reuben, under various corporate veils, owned 59 of them. He figured if it would work for distribution, it would work for retail outlets, and soon, of the 800 adult book stores in the country—I haven't been to one in thirty years, but they were the kind where men in raincoats paid a dollar to browse and got it back if they bought something—Reuben owned over 600. He also invested in a printing plant.

Back to the new magic number: 9. My break-even point for Reuben's tabloids was 9%. That's right; we could pulp 90% of our print run and still show a profit.

How? Simple. He got rid of the costs that others had to pay. (Remember that: we'll come back to it later). He didn't pay a printer anything but the cost of paper, because he was the printer. He didn't pay a national distributor because he was the national distributor. He didn't pay the local distributor (the equivalent of Charles Levy in Chicago, or Long Island News Agency in New York) because he was the local distributor. He didn't have to give the bookstore its usual percentage, because he was the bookstore.

9%. Simple. And then he made sure of his profit by forbidding any of the 600 bookstores, or any of the 59 secondary agencies, to sell a single copy of a rival tabloid—all of which had to use his services—before we'd sold half of our own print run.

(Sound familiar? If you're a Resnick reader it should. The protagonist of my 1984 science fiction novel, The Branch—which is being reprinted by Pyr in 2008, hint, hint—was based on Reuben, and his business was lifted lock stock and naked ladies from Reuben's.)

We're going to talk about science fiction magazines now. I'm inclined to say something flip, like "Back to the real world," except the point of all this is that what I just related to you was the real world. My first publisher went belly-up a few years after I left because the expenses whelmed him over; Reuben stayed profitably in business until the Feds finally nailed him for tax evasion. (He died in jail.)

The way I see it, the great printzines—Asimov's, Analog, F&SF—are my old Chicago publisher, and Jim Baen's Universe is Reuben Sturman.

Let's see if I can explain—and please understand, I love those three magazines. I've been reading two of them all my life, and the third since its inaugural issue thirty years ago. I've sold to all of them. I have won five Hugos, and each winner was from one of them. I will never refuse a request from one of their editors, and will write for them right up to the end. I will weep bitter tears when they die—but die they will, and for much the same reason my Chicago tabloid publisher died.

And Jim Baen's Universe, or some as-yet-unborn JBU clones, will live and prosper, for the same reason Reuben Sturman's publishing empire lived and prospered.

Consider: what does it take to get a copy of Asimov's or one of the others into your hands?

Well, there's an office, which means an overhead.

There's an editor, a top-notcher, who has to get a salary commensurate with his or her talent.

There's paper for the magazines to be printed on.

There are color separations for the covers.

There is the cost of printing tens of thousands (formerly a couple of hundred thousand) of copies of the magazine.

There are shipping costs. The subscribers don't drive to the printing plant to pick their copies up. Neither do the distributors. Neither do the stores.

There are the distribution costs, both for the national and local distributors. They're good guys, but they don't place the magazines in the stores for free.

There are the stores themselves. If they sell a $5.00 magazine, most of them are going to want $1.50 or thereabouts for their troubles.

There are warehouse costs for those magazines that are neither sold nor pulped.

And a month later, every copy has vanished from the newsstands and bookstores, to be replaced by the next month's issue.

Now let's take a look at how these expenses effect Jim Baen's Universe:

There is no office expense and no overhead, because Eric, Paula, me, all of us, work out of our houses.

There are no editorial salaries for Eric, Paula or me. We're so confident that the magazine's going to make money that we each opted to get a piece of the profits.

There are no paper expenses, because the magazine doesn't appear on paper.

There are no color separations, because we simply post the artwork right on the screen.

There are no printing expenses, because the magazine is not printed.

There are no shipping costs, because the magazine is not shipped.

There are no national or local distribution costs, because JBU is not distributed. It's right here, and we don't have to pay anyone to put it in your physical proximity.

There is no cut for the bookstores, because we are not sold in bookstores. Or newsstands. Or supermarkets. We're right here on line. You pay us, and we give you the magazine, and there are no middle men. (You might think about that. You pay $4.95 for a digest magazine, they might wind up with about $1.85 of it; you pay us $5.00, we keep $5.00.)

There are no warehouse costs, because the magazine exists in electronic phosphors, not paper pages. We'll post another issue in a couple of months, but this one won't be through earning us money, because it will always be available for anyone who wants it. It just won't be the new issue on the website.

Do you begin to see where the print magazines are at a bit of a disadvantage?

Now, there is one expense that they and we both have, and that's content, which is to say, the stories that are our reason for existence.

The three digest magazines pay seven to eight cents a word. It seems reasonable. Hell, when you look at their expenses and their diminishing print runs and sales, it seems positively generous, almost philanthropic. How can JBU possibly compete with that?

Easy. By paying our major writers three times as much, and by paying every writer, even our rank beginners, at least as much as the digests.

Remember: they're paying overhead, color separations, editorial salaries, paper, printing, shipping, national distributors, local distributors, bookstores, warehouses, and authors.

And us? We're paying . . . authors and artists. Period. And we won't be happy until our best authors are getting 50 cents a word, and all of our authors are getting at least twenty cents. Give us three years; we're working on it.

Next question: is there enough of a cyber audience to keep an e-zine in business?

I didn't know until a couple of months ago. Now I do.

Let me tell you about that. There's a young man named Steve Eley who runs a podcast site called Escape Pod. Last year he asked me for a story. At the time I didn't pay much attention to it. I mean, who the hell listens to podcasts? Then a French producer/director who had never been able to get the magazine my story appeared in heard the podcast and optioned the story for maybe 75 times what Steve had paid for it. So of course I instantly became a huge supporter of podcasting, sent a bunch of top writers to Steve, sold him a bunch more stories, gave out podcast interviews all the hell over . . . and couldn't help wondering if anyone except the occasional French movie producer actually listened to these things.

So I asked Steve if he had any figures. He said yes, that "Travels With My Cats," my second Escape Pod story, had 22,000 hits in its first month.

22,000 hits? I couldn't believe it. It had appeared in Asimov's. If every single person who bought that issue read the story—and my guess is that probably a quarter of them didn't—that was still only 18,556 readers according to this month's Locus.

More people heard the story online in one month—and of course it's still being heard months later—than read it!

Okay, I said to myself, the story was a Hugo winner and Steve advertised it as such. For whatever reasons—its content, its awards—it touched all the right buttons. But surely not every story on this one little web page could do that.

So this month he posted another of my stories. It's a tongue-in-cheek fairy tale. It won no awards. It was written for teenagers. It has nothing in common with the other story.

I couldn't even wait for an entire month. I e-mailed Steve after two weeks to ask how many people had downloaded it. (Hold onto your hats.)

14,000!

14,000? This is me. Not Anne McCaffrey. Not Kevin Anderson. Not Mercedes Lackey. Not Robert Jordan.

Are the readers out there in the ether?

You betcha. In vast quantities.

Are we positioned to find them?

We think so. We hope so. And if we're wrong, then the next e-zine to come along will find them (or be found by them), or the one after that.

The one thing you can be sure of is that JBU and its electronic imitators will bring you the very best writers and artists around.

After all, we've got nothing else to spend it on.

—Mike Resnick