Tuesday, October 13, 2009

Kindle Numbers: Traditional Publishing Vs. Self Publishing

I got quite a shock last week, when I got my bi-annual royalty statement.

Hyperion publishes six titles in my Jack Daniels series. They gave me my ebook figures.

Authors are usually quite secretive about their sales and their royalties.

Me? I'm spilling the beans. Here are my ebook Kindle numbers from Jan 1 to June 31, 2009.

Whiskey Sour priced at $3.96: 550 sales, $341 earned.

Bloody Mary priced at $7.99: 180 sales, $381 earned.

Rusty Nail priced at $7.99: 153 sales, $341 earned.

Dirty Martini priced at $6.39: 202 sales, $604 earned.

Fuzzy Navel
priced at $7.59: 152 sales, $341 earned.

That's 1237 ebooks sold in six months. Total money in JA's pocket: $2008.

Why do these numbers vary so much?

I get 25% of the amount received by the publisher. Depending on the deal my publisher makes with Amazon, that can be anywhere from 62 cents to $3 per ebook sold.

We can draw a simple conclusion looking at these sales: a $4 ebook sells 3 times as many copies as an $8 ebook.

Now lets compare these to my self-published Kindle sales. I'll use my four novels for comparison. This is also for a six month period.

The List priced at $1.99: 5142 sales, $3600 earned.

Origin priced at $1.99: 2619 sales, $1833 earned.

Disturb priced at $1.99: 1139 sales, $797 earned.

Shot of Tequila at $1.99: 900 sales, $630 earned.

That's 9800 ebooks sold in six months. Total money in JA's pocket: $6860.

I get 35% of the price I set on Kindle, or 70 cents per ebook download.

We can draw some simple conclusions looking at these numbers.

Ebooks priced at $4 sell an average of 1100 ebooks per year.

Ebooks priced at $8 sell an average of 342 ebooks per year.

Ebooks priced at $2 sell an average of 4900 ebooks per year.

It doesn't take a math whiz to see that the biggest profit is with low priced ebooks.

Now let's play the imagination game.

My five Hyperion ebooks (the sixth one came out in July so no royalties yet) each earn an average of $803 per year on Kindle.

My four self-pubbed Kindle novels each earn an average of $3430 per year.

If I had the rights to all six of my Hyperion books, and sold them on Kindle for $1.99, I'd be making $20,580 per year off of them, total, rather than $4818 a year off of them, total.

So, in other words, because Hyperion has my ebook rights, I'm losing $15,762 per year.

Now Hyperion also has my print rights, and my Jack Daniels books are still selling in print. But they aren't selling enough to make up the $15,762. Especially since all of them aren't regularly being stocked on bookstore shelves.

According to my math, I'd be making more money if my books were out of print, and I had my rights back.

Of course, there are a lot of different factors at play here. Certain titles are more popular than others. Print sales may fuel ebook sales. Ebooks sales may wane (though mine haven't yet.) Branding and name recognition and past customers and fans all come into play, making this damn confusing and far from conclusive.

That said, do I really want to keep signing deals with print publishers?

$3430 per ebook per year isn't really a big number. I've certainly never been paid so small an advance for a novel.

And yet, I'm 100% sure ebook sales are going to go up. I've signed deals with Smashwords to sell ebooks through Barnes and Noble, Apple to sell ebooks as iTunes apps for the Iphone and iPod Touch, and Sony to sell ebooks on their reader. Kindle was just released in 100 more countries. I predict more ebook sales in the near future.

Let's say by the end of 2010 I can make $5000 per year per ebook title by self publishing. I can easily write four books per year.

Again, $20,000 per year isn't enough to live on. But things begin to accumulate.

$20k per year for 4 new books, plus $20k per year for the books I'm already selling, is $40k per year.

But I'm selling more than novels on Kindle. I also have 6 collaborations and short story collections. This year I'm also going to put The Newbie's Guide to Publishing ebook on Kindle.

So now we're looking at 14 ebooks, each making $5k per year. That's $70,000 a year.

And as more people buy ereaders and ebooks, that number can go up. Plus, I publish on my schedule, I keep the profits, and best of all, the rights are 100% mine. So if I want to do a limited print edition, I can. If I want to sell the mass market paperback rights, I can.

Ebook rights began as gravy. I can picture a day when the print rights are the gravy, and authors make their living with ebooks.

Yes, it's still far off. And yes, print publishing is in no danger of going away anytime soon.

But I don't think I'll ever take a print contract for less than $30,000 per book, because I'm confident I could make more money on it over the course of six years than I could with a publisher over six years.

Isn't that bizarre?

For the bestselling author, this is all still very trivial. These numbers are chump change compared to the advances they get.

But for the midlist author, I'm beginning to think it's possible to make a living without print contracts.

I've struggled mightily to break into print. And I've made a nice chunk of change on my print novels.

Now I'm hoping those novels go out of print, so I can get my rights back.

I never would have guessed my mindset would change so dramatically in so short a time.

DISCLAIMER: YOUR MILEAGE MAY VARY

If you're a new author, reading this and thinking about the fame and fortune you'll make on ebooks, I urge you to try the traditional route first. Find an agent. Land a deal with a big NY house. Ebooks aren't there yet.

I'd hate to think some writer gave up on their print aspirations because of something I've said on my blog. I suggest you keep up the agent search, and hold out for that major deal. While I have no doubt others will be able to sell as many ebooks as I have, and probably many more, I still haven't made anywhere near the money I've made by being in print. Plus, everyone's situation is unique, and no writer should compare themselves to any other writer.

Most of all, don't change the future of your career based on one man's ideas. Learn as much as you can about all of your options, do research, get other opinions.