The Times (and every newspaper today) carries the news that the UK supermarket chain Tesco has achieved annual pre-tax profits of £1.6 billion. That's profits, please note, not turnover. God only knows what the turnover is.
Let us compare that with the UK book trade. Obtaining accurate figures is difficult -- it depends which source you believe -- but a couple of years ago the high-street bookshops took in somewhere around £2 billion a year. Let's be optimistic and say that's gone up by 10%, to £2.2 billion. And that's turnover, please note, not profit. Just by way of comparison, it is worth noting that the income of all firms of solicitors (lawyers) in the UK is in excess of £11 billion a year.
Out of that £2.2 billion spent on books, the trade publishers get somewhere around 50%. Or less. The bookshops, and of course the Tescos of this world, are driving down margin with every passing year. So the fancy end of publishing (as opposed to boring but profitable things like textbooks) is pulling in about £1 billion a year. In turnover. We don't really know what the profit on that is, but we can rest assured that it is modest.
The Bookseller provided some data on profit margins a couple of years ago. Now the term 'profit margin' can mean almost anything, especially if your name's Maxwell, but let us assume that in this case like was being compared with like. The profit margin in consumer trade publishing -- the flashy high-street end -- was given as 4.1%. The margin for scientific publishing was 29.3%.
Now you know why the City of London isn't interested in publishing or bookselling. The whole book industry in the UK is a piddling little business of no interest to the money men whatever. Even the biggest firms are small employers (Hodder Headline, one of the biggest, has less than 800 employees) and staff are very modestly remunerated. In 2001 a Bookseller survey showed that in one medium-sized publisher the average salary was just under £20,000. In the same year, a driver on the London underground was earning £31,000.
No wonder they can't afford to pay writers properly.