Friday, February 18, 2011

The Numbers Game

So I just got off the phone with an acquaintance of mine. She's a writer whom I met last year at a conference, and she called me asking for advice.

First some background. She's hit the extended NYT list several times in both hardcover and mass market, and has a backlist of ten books. She was just offered a contract from one of the Big 6 for $200k a book, for a two book deal.

The royalties offered are industry standard 25% for ebooks on net.

She's thinking about releasing the book herself, and needed some help crunching the numbers. She's had several previous contracts for $200k a book, but so far none of her books have earned out their advance, even six years later. (This is common, by the way, even though she's had multiple printings. If I'd been paid $200k for Whiskey Sour or Afraid, I wouldn't have earned out either.)

Here's what I told her:

The 25% the publisher is offering is actually based on net. So you're getting 17.5% of the list price. (Amazon gets 30%, they get 52.5%--which is obscene)

When your agent gets her cut, you're earning 14.9% of list price on ebooks.

For a $9.99 ebook, that's $1.49 in your pocket for each one sold.

If ebook prices go down (and they will) it would be 75 cents for you on a $4.99 ebook

If you release a $4.99 ebook on your own, at 70%, you'd earn $3.50 an ebook.

Let's say you sell a modest 1000 ebooks per month at $4.99.

That's $9000 a year you'd make on ebooks through your publisher vs. $42,000 a year on your own.

Now your $400k advance the publisher is offering is paid out over three years. That means, after your agent's share, you're making about $114k a year, or about $57k per book per year.

We'll assume that will be all you'll earn, $57k a year for 3 years, because you have yet to earn out any of your previous advances.

My current best selling ebook is selling over 3000 a month, though on average, my novels sell about 1600 a month.

If you sold 1600 copies a month of your next book at $3.99 each, you'd earn $53k a year. That's a bit less than the $57k the publisher is offering.

But you'll earn for more than three years if you self-pub. You'll earn forever.

Forever is a long time.

Traditional publisher in 3 years: $171k
Self pub in 3 years: $159k

Traditional publisher in 4 years: $171k (because you won't earn out the advance)
Self pub in 4 years: $212k

Traditional publisher in 7 years: $171k
Self pub in 7 years: $371k

Of course, these numbers assume ebooks sales will stay flat. I have two years of data that show ebook sales are growing.

It also assumes they can sell as many ebooks at $9.99 as you can at $3.99. That's wrong. You'll greatly outsell their $9.99 list price if you price it lower.

Taking print out of the equation for a moment, let's take a guess at $9.99 vs. $3.99, based on my numbers.

At $9.99 you've shown you can sell 800 ebooks a week during the first 8 weeks of your release. You'd earn $1200 a week through your publisher on ebooks.

At $2.99, I've shown I can sell as high as 3000 a week. If your ebook was $2.99, you'd earn $6000 a week. If it was $3.99, you'd earn $8370 a week.

Obviously, you need to also factor in print revenue, though whether bookstores will still be around when your novel is released in Spring of 2012 is open for debate.

But you can release your book through Createspace and have a print version. You won't sell as many books as a traditional publisher would could, but those sales will go toward an advance you'll never earn out.

If you priced a 6" x 9" Createspace trade paperback at $13.95, you'd earn about $3.56 a book. For my bestselling Createspace titles, I sell 50 a week, or about $9200 a year. Not nearly what you'd make through a traditional publisher, but not bad for passive income.

That means, assuming your book sells like mine sell, it would make you about $62k a year, just through Amazon. This doesn't count Nook, Smashwords, Apple, Sony, etc.

It also doesn't count time lost.

Your book is already written. Your publisher wants to release it in 15 months. You could have been earning money from your ebook during those 15 months. That's a nice chunk of potential dough, unearned.

Now, maybe you won't sell as well as I do. It's possible. You've got more fans, a larger name, a bigger brand, but maybe it just won't fly.

It's also possible that you'll outsell me.

But does it really matter if it takes you 2 years, 5 years, or 8 years to do better than the publisher's offer? Because ultimately, you WILL do better on your own. And you won't have to deal with any of the stuff you hate about the publishing world, won't have to tour, will have full cover and title approval, will be able to release books at your own pace, and will be in complete control.

Now a publisher offers more than just creating and distributing books. They also edit, do the cover art, do the printing, shipping, and uploading.

But do you want to pay them 52.5% forever for those services?

Michael Stackpole just had a wonderful quote:

"You do not pay a royalty to anyone who is doing day-labor. All book production should be done for a flat fee (and there are plenty of folks who will do it for very reasonable fees). Paying a royalty to someone for prepping an ebook is akin to paying the kid who cuts your grass a percentage of the purchase price when you sell your house."

Read his whole article HERE.

When I got off the phone with my friend, she was still worried and not quite ready to jump into self-pubbing. This is understandable. She has no personal data to fall back on. I have 2 years of self-pubbing experience, and when I started I didn't expect it to become my main source of income. It also took me over a year, even with the data, to come to the conclusion that signing with a traditional publisher is a bad idea.

But now I'm convinced. Signing with a traditional publisher, even being offered $200k per book, is a VERY BAD IDEA.

And I believe these numbers back me up.

195 comments:

Erin said...

Wow, you crunched a LOT of numbers! Since I was a math major and love numbers (read: nerd), I was impressed by this post. Something to think about! Thank you for sharing.

Erin @ Quitting My Day Job

bowerbird said...

it would be nice if
this was the last time
you had to make this
argument, but i have
a feeling it will take
a long time to sink in.

-bowerbird

matthew dow smith said...

I love when you break out the numbers. Makes everyone so much clearer.

I'm actually having this same discussion over a book I've been working on. In the end, I'm doing a test run with a self-published related novel. Should be an interesting experiment.

Thanks as always for all the information on epublishing. You're an indispensable resource for this stuff.

--MDS

Patricia Lynne said...

Thank you! This article was very helpful. I'm at that stage where I'm trying to figure out what road to take. Traditional or go self pub. I've been leaning towards self pub but I don't know enough and I have no idea where to look. I'm finding your blog to be very helpful on that front. Keep it coming. PLEASE!

JL_Bryan said...

Thanks for your in-depth numbers! This was a very informative post.

V. Furnas said...

Pretty sure I wish you were sitting next to me in those MBA finance classes. Great article!

Tina Folsom said...

That's some great calculations - and from what I have experienced with e-book sales so far, your figures are actually on the conservative side. I'd say to her, decline the deal.

Tina Folsom
http://authortinafolsom.blospot.com

T. B. Wright said...

Very informative, as always. I'm sure it would be hard to pass up that kind of money up front, but the long term is where it's at. Self-publishing a novel is an investment, not a get-rich-quick scheme.

evilphilip said...

The real joke to this post is that almost no one gets offered a $200k advance -- yet a ton of people can still live up to that 1,000 book a month goal.

These numbers seem to be talking about elite authors, but the reality is that they were really written for the rest of us.

Megg Jensen said...

I released my book one week ago and have already sold 50 copies. If I keep that up, I'll earn nearly $5,000 this year (after taxes). That's the typical advance for a YA novel...one I probably wouldn't have earned out as a traditionally published author.

I can't guarantee my numbers will keep up, but the stats show that they will.

I drank the juice, Joe, and I'm a believer!

www.meggjensen.com

Lundeen Literary said...

Damn, Joe, I LOVE your numbers posts! Makes the geek in my a very happy geek indeed!

Let's even continue the argument and say that a self-published author spent that same 52% (publisher's cut) on services.

Um, that would be the best edited, best produced, most beautifully covered book EVER. You can buy some platinum standard work at those rates, and still have ample money left over for tons of marketing.

Hire the right web marketing guru, and selectively buy lots of inexpensive yet effective marketing (kindle nation, kindleboards, etc.) and sell really really REALLY well.

The ball would still be in the author's court, and he/she would still be making MORE MONEY. Add to that the level of control an author would have over his/her career and unlimited earning potential, I think the choice is clear for an author who has consistently been offered that level of advance from NY. Well, it *should* be clear anyway. Apparently it's not.

Like bowerbird said:
"it would be nice if
this was the last time
you had to make this
argument"

Yep. Not happening. :(

Jenna
@lundeenliterary
www.lundeenliterary.com

Douglas Dorow said...

Great info/example for us all to think about. I know that "for sure" $200,000 is tempting, but you clearly laid out the option and alternative.

Breaking away from the old model will be tough for some.

Sideburns said...

A friend of mine is an author with a track record going back to the '70s including co-writing several NYT best sellers. Recently his daughter self-published her fist novel on Kindle and it's doing about 1000 a month. Right now, he says that the only reason he's not thinking about doing the same with his next book is that he's already accepted the advance. After that's out of the way, he's probably going to go self-pubbing all the way.

Bakari Akil II, Ph.D. said...

I would have a serious dilemma. That is a lot of money to turn down. It is sort of like watching Deal or No Deal and the person has an offer for $250,000 or so from the big boss and then they flip the case down and say "I can do better than that."

Taking the analogy a step further, if I was the friend of the person on the show I would be shouting, "Bump that, tell him no deal!" But if I were the grandmother clasping my hands together and knew about rough times, I would say, "Take the money, please! Don't gamble on bravado."

That is frustrating to see.

But here we are also talking about freedom and royalties that can last for five to 20 years as a self publisher (who knows?)

As an author who has earned the advances before there is a great chance she will do well as a self-pub but it's a gamble either way.

I can't call it.

Joe Konrath said...

The idea of an advance--a big chunk of money up front--is alluring, and an advantage publishers have.

But unless a doctor told you you had four months to live, why would you take a smaller amount of money upfront when you can quite obviously make more in the long term?

I didn't go crazy with these numbers or predictions, but I could have based potential income on rising ebook sales and shrinking print sales.

If, in 2015, ebooks are 50% of all sales, and ebook prices plummet, do you want to be locked into earning 14.9% on a $2.99 ebook? That's 44 cents, vs. $2.04.

You'd truly have to be dim witted to do that. The amount of money you'd lose is astronomical.

Lundeen Literary said...

Other side of the coin:

This set of numbers will change, and soon. Amazon will have to retaliate to the Apple attack. Amazon will likely lower royalty rates, or adjust something somewhere, but let's say they take the 30% apple chunk out of the author's cut, and they do the cut across the board (worse case scenario) - the numbers would become:

Traditional publisher in 3 years: $171k
Self pub in 3 years: $111.3k

Traditional publisher in 4 years: $171k (because you won't earn out the advance)
Self pub in 4 years: $148.4k

Traditional publisher in 7 years: $171k
Self pub in 7 years: $259.7k

In other words, the author still wins long-term in the worst-case Amazon kneejerk scenario. I have a feeling Amazon will be more crafty than that.

If the author negotiates a split net royalty with the publisher, and gets it in the contract that her e-rights revert in 5 years, or when the book goes oop, then she doesn't lose as much, and may actually do better over the long haul. But NY isn't passing that kind of candy out, and that ain't the kind of kool-aid they're drinking. Fat chance of that happening.

Best for an author of this level to self-pub, period. Newbies may do better chasing an agent and the big 6 - This author needs to make her own money without NY in the picture.

Jenna
@lundeenliterary
lundeenliterary@gmail.com

Lundeen Literary said...

GAH!! WORST!!! "worst-case scenario" that last post should have said.

I need to go back to bed. I'm having a bad type day. :(

kathie said...

What an optimistic view of self pubbing! I'm headed to a release date of May 1. I had my book professionally copyedited, cover professionally made, and have marketing and pub lined up! I am actually very excited and only occasionally in the du
ps when I get a cynical response from fellow writers or book sellers. My Createspace design team is INCREDIBLE!!! So far self pubbing feels right! Thanks for all the encouragement you don't even know you're giving!

Donald said...

I find it surprising that you ran through the numbers with her and she is still thinking of signing with her publisher. Then again, self-publishing is not writing, and not everyone is cut out to run their own business. Self-publishing is a business that demands that you make many decisions, self-promote and deal with things(Cover design, formatting, inventory, etc.) that some people would rather not be bothered by. It sounds as if she is living the dream of making a living from her writing already and, despite the overwhelming evidence that she would very likely earn more by going out on her own as a self-publisher, perhaps feels the extra effort involved would lower her quality of life. As they say, "Sometimes less is more"

Christy Pinheiro said...

I feel bad for your friend.

Fear is a powerful thing.

Lundeen Literary said...

Joe sez:

"The idea of an advance--a big chunk of money up front--is alluring, and an advantage publishers have."

It gets less alluring to know they don't give it all at once and they hold on to the check for as long... as.... possible......

If someone handed me $200k for my 2 books right now, I just might say yes, mainly because I could live for 5 years off that, write a ton during that 5 years, and self-publish the rest. The freedom to do the work would be great. After the 5 years, I'd have a sufficient body of self-pubbed work to live off of, and the initial advances would have enabled me to do that.

But they don't give it all at once. They know better. Like a drug dealer, they want you hanging on, aching for that next hit.

Best not to need the fix in the first place.

Jenna
@lundeenliterary

kathie said...

I'm publishing with createspace. I had my book professionally edited, a cover artist (Julie Metz) did the cover and I have marketing and pub lined up. My createpace team has been INCREDIBLE!!! Thanks for your great advice! I'm ready to dive into this and feel pretty good about it! Thanks to you!
Http://kshoop.com

Sheri Leigh said...

There are so many what-ifs.

What if publishers wake up and finally get their acts together and really get into the ebook game for realz and you've already burned that bridge?

Or what if ebooks and the ebook readers we have now become obsolete, like Betamax? And what if the new format(s) are very complicated and the little guy can't do it without a huge investment?

What if Amazon et al start cutting out the direct route to distribution and allowing only the big pubs in?

Or what if royalty rates drop from 70% to 25% from the big distributors?

What if we hit peak oil and the whole world implodes? (Oh wait, that first one's already happened... :)

The numbers seem clear... but what's the REAL risk, I wonder, to opting out of a bird in the hand ($200,000 advance) for two in the bush (self-pubbing those two books)...

kathie said...

Didn't mean to pub my comment twice. Didn't think it went through the first time.

Trance St. Croix said...

Personally, I think she's crazy if she doesn't take the publisher's offer.

First, authoring a book is never just a money issue. What's it worth to walk into your local B&N and see your book sitting there in hardcover or mass market next to the biggest and brightest names in the business?

What's it worth to make the NYT bestselling list? Or get a good review from PW or Kirkus (which don't review self-published books)?

What's it worth to hand over all the editing, production, distribution and accounting to someone else and not have to be bothered with it?

All these intangibles aside, even looking at it as a money proposition only, $200K in the hand is a worth a lot more than money on the come, because future money will need to be discounted to present day value to make a comparison valid.

More importantly, no one can say what the royalty landscape will look like down the road. Apple's new subscription app policy is going to force dramatic changes come June 2011. Authors can't assume to get a 70% sales royalty forever just because that's what's in place today.

$200K is a lot of money. The book was probably written in under a year. That's a pretty good yearly salary. My advice would be to take the money and start on the next book.

Burritoclock said...

@Sheri Leigh I'll admit a lot of those are legitimate concerns, well except the peak oil myth.

However one need only to look at other industries to see that the pubs will stick to their plan till the last possible second. Just like everything from music to newspapers have done. By the time they do "get onboard" it would just be bad business for Amazon's bottom line to abandon self publishing. It would make no sense.

But yes, there's always risk in every decision. If you think the pub's will "win" and somehow stop self publishing on this scale...then you should probably take the advance...

Kristina Springer said...

Here's my question: If she's getting 400k for two books then she's a lead title and the publisher is planning on promoting her heavily. Promotion she won't get on her own. So how can her sales numbers on her own compare to those of a heavily promoted book?

Thanks Joe! Fascinating stuff!

josephrobertlewis said...

Thanks for the updated math, Joe. I just launched my second book and I feel more confident and optimistic about my writing career now than I did in the 4 years I played the industry game.

Books by Joseph Robert Lewis

Nick Cole said...

Another factor is the pricelessness of getting to write what you want. If you're having solid sales in one category, say thriller, and suddenly late one night you go on a Cormac McCarthy bender and the next morning you want to take a swing at alternative prose, dark endings and a wanton disregard for punctualization, you can do it. You're free to suceed or fail. You don't have to convince some committee to let you try while they watch with arms folded. In short, overused phrase impending, you can think outside the box and pay the price for it, or, reap the rewards.

Burritoclock said...

@Trance St. Croix

$0.00

Jamie said...

Joe how does your presumption of the potential e-book profits your author friend is giving up square with some of your comments in Victorine's thread? If your friend goes with a publisher she gets 200K for the two books. Even if she doesn't earn out her advance she can count on that money. If she self-publishes she might make sell 1000 copies a month, she might sell 10,000 or she might sell 10. In Victorine's thread you said that not every e-book would sell well, even if it is well-written and has a good cover and a good price. There is something to be said for guaranteed income versus potential.

John Ling said...

The numbers seem clear... but what's the REAL risk, I wonder, to opting out of a bird in the hand ($200,000 advance) for two in the bush (self-pubbing those two books)...

It depends on how eager you are to embrace the future as opposed to the past. The first American pioneers who expanded westwards had very little certainties, yet they went ahead and did it anyway.

If you don't go ahead and try something new, you'll never know what the result may or may never be.

Mark Asher said...

How many self-publishing writers are actually selling 1000 copies a month per title at $3.99?

If you lower her price to $2.99 like you are selling your books, Joe, how does the math work?

And what if she sells 600 a month instead of 1000? If her previous books never earned out, maybe she won't be a huge seller when she's independent and self-promoting and primarily ebook and not in the brick-and-mortar stores.

cindie geddes said...

For writers who want everything Big Publishing does but who don't want to give up part of the book's earnings and also don't want to do everything themselves, there ARE alternatives. (Check out LuckyBatBooks.com. All fee-based -- from editing to covers and way way beyond). I think we'll be seeing a lot more of these alternatives in the future as writers demand control and find out they can do just fine without anyone taking a portion of their money forever.

Archangel said...

thanks Joe, fascinating as ever.

Just being from the backwoods where winter provisioning has to have the best plan in place in terms of what is right now...

i wonder if there arent three choices for your acquaintance who's being offered near a half million dollars over three years' time. (setting aside for the time, critical considerations such as dependent children, caregiving of elders, debt load, her tax bracket, whether married or single and the spread of tax debt accordingly... also not knowing if the deal is for World English only, or [sounds like bec of $ involved, could be for all Foreign as well...meaning poss benefit of far wider release of her works via strong foreign publishers)... and not knowing her 'writing speed' or thereabouts, so as to assess whether two additional books would come every year, or one, or one book every three years... or... et al... those are just the first considerations that spring to mind in making such a heady decision)

seems three options: go with near .5M $$$$$.

or, go with self publishing.

or go with .5M and self publish new work asap to ride the publicity and marketing wave of big pub bringing out her two books.

So much seems it might depend on other factors of her life... where ready money would allow her to pay for what you Joe have been pounding on for the good: covers, editing, copy. Depending on what kind of writer, ready money can buy research trips, all kinds of things that would speed up and enhance bringing out new ebks.

It strikes me, tell me if I am wrong, that to have 'the machine' of big pub bhind her while she brings out add'l ebks at 4.99 and lower, would be a bonanza for her.

The thing about being a writer is that there is very often "More." More writing, more stories, more work, more ... that this part of personal inspiration and drive does not wear out, does not bottom out for most. She likely has many many more books in her... and just my .02, that might well be weighed also as part of longevity equation in years forward... the value of the base stock... which is she herself... the most valuable of all.

Too, it's a wait and see at the moment, with no clearcut outcome, but there is concern by many idnia ebk authors/small publishers about what Amazon is going to do considering Apple's throw of the gauntlet. I see that once again, the authors are left out of the Godzilla- Rodan business negotiations, and that has to be, to my mind, held thoughtfully... as once again, as with the now big 6 which used to be the big 32 twenty years ago... the gatekeepers for ebooks though including author access, also exclude the author from being captain of their own royalties say-so. We had hoped it would be different.

On topic, if the author woman has hit the extended NYT list regardless of all else, she has a heck of an audience for her work, no matter what form, format. Again, just my .02

S.E. Gordon said...

Once again, you hit the nail on the head. For me, the real killer is the 15-month window. It is quite possible you could earn all of that 200k within that chunk of time. And, of course, there's the rights issue. It might be years before you get them back (that's what happened to my mother).

Ellen Fisher said...

"How many self-publishing writers are actually selling 1000 copies a month per title at $3.99?"

I echo this. How many self-pubbed authors are regularly selling this many? I don't see too many of us selling a thousand copies of any one title consistently. Perhaps as a known author (there's that platform thing, sorry!), your friend can sell that many. But it's possible she might not. It depends on the genre and luck and a lot of other things, I think.

At any rate, I wouldn't describe a thousand copies per month of any one title as "modest."

Tina Folsom said...

Mark Asher says: How many self-publishing writers are actually selling 1000 copies a month per title at $3.99?

Actually, I do. In fact I sell my full length novels at $4.99 a piece and have sold about 2000 of my best-selling one so far this month (and it's only the 18th). I have 3 that sell this well, and another one that sells about half that (plus a ton of others that sell lots but at lower prices).

so, it can be done, and I'm a total unknown. Tina who?

Tina Folsom
http://authortinafolsom.blogspot.com

Sideburns said...

Nick Cole made a good point: when you self-publish, you can write whatever you want. Traditional publishing companies are only interested in what they think they can sell not in how good the book is, and literary agents (their gatekeepers) are only interested in what they can sell to the publishers. That means that the publishers are trying to second-guess the public and the agents are second-guessing the publishers. Nobody except the author has the slightest interest in the quality of the story itself. And, of course, the only way they can judge how well a book might sell is by comparing it to what's out there now. That means that if, like me, you're not interested in following the trends (One of my books is a fantasy; there's no ancient evil to be feared, no warlord trying to expand his Evil Empire just an ambitious, rather unscrupulous king trying to take over the neighboring kingdom.) agents wont take it on because they wouldn't know how to sell it and publishers wouldn't buy it because they have no idea if it would sell. If I want my books out there, self-pubbing is probably my only choice and doing it through Kindle (and possibly Smashwords.com as well) looks like the best way to do it.

zoewinters said...

Oh yeah, I wouldn't sell a book for $200k either. Just not a trade-off worth making to lose creative control and e-rights.

I can see where it might be a good deal for some, but the catch-22 is that anyone who can get that kind of deal, can make it on their own either as well or better, but with full creative control.

pamcl said...

I'm fascinated by what is going on here. A few thoughts:

As a totally new author, I'm seriously considering not even trying to go the big 6 route first, but rather to try and establish a base via ebooks...not rushing it either, I know how key it is that the books be ready.

Why do this? Why not? Why not get good books out there, and build a platform, and then if the demand is there, maybe expand and see if the big 6 is interested and then get the actual print copies out where they are visible.

Am sure the print books in stores help sell the ebooks which also drive print sales.

The one main concern I have though is over-saturation. People like Amanda Hocking who have multiple books out there have also benefited from great timing, they are in on the early wave of ebooks.

Once the masses get it and start putting more content up there, will it be that much more difficult to be found?

Or will the volume of ebuyers grow similarly?

What I'm seeing now is that 'cream rises to the top' and good authors are being discovered and rewarded.

Will that continue?

Ellen Fisher said...

"Actually, I do. In fact I sell my full length novels at $4.99 a piece and have sold about 2000 of my best-selling one so far this month (and it's only the 18th). I have 3 that sell this well, and another one that sells about half that (plus a ton of others that sell lots but at lower prices)."

I agree that it can be done. It's easier to do in certain genres (erotica or paranormal romance, for example), but it can certainly be done in pretty much any genre. However, my point was more that I wouldn't ASSUME any given title was going to sell a thousand copies per month. That seems like rather a large assumption to me, based on what I've observed other authors posting about their sales.

David Wood said...

I'm not sure how to phrase my question, so I'll just wing it and hope I make sense.

If I was offered $200K, I'd take it because I could pay off: my house, my car, my student loans, my consumer debt, and still have money left over to spend or invest. How much money do I save over the remaining twenty years of my mortgage by paying it off early? Same for the other debts. So, my question is, isn't $200K today worth more than $200K spread out over several years?

Megg Jensen said...

Hey David,

Most advances are paid out in smaller chunks. Some up front, some when you deliver an acceptable novel, more when it's published. If the offer was for more than one book, the money would be spread across that time as well.

Plus, that's probably before the agents 15% cut and income taxes, social security, etc.

It's still a lot of money, but not a big chunk all at once like it sounds. :-)

Megg

David Wood said...

Ah! Makes sense. Thanks Megg.

Joe Konrath said...

I can see where it might be a good deal for some, but the catch-22 is that anyone who can get that kind of deal, can make it on their own either as well or better, but with full creative control.

True that.

Tina Folsom said...

Ellen, definitely, I agree, not everybody makes it.

My thought though is that if you have a good product in a popular genre, price it well, do a little marketing (I've done basically none), have a good cover and blurb, you can sell well.

Of course, not everybody will do well. Sure, luck is certainly involved, but the quality of your product is too. I often download samples to my Kindle and then don't buy the book because it doesn't grab me. And occasionally I'm just put off by too many mistakes in the sample.

And I know that I'm lucky, because Vampires are still selling well. And that's really where self-publishing can help an author: you can respond to trends much faster and jump in within a few months rather than write a book now and see it published in 18 months, when a short term trend might have already evaporated.

Tina Folsom
http://authortinafolsom.blogspot.com

F. D. said...

Joe,
All your calculations were at $3.99 or less if she self-publishes. Since she's well known and her readership is used to paying $20.00 or more for hardcover; $6.00 or more for paperback, why not recommend start the book at $9.99 like David Morrell did with his amazon exclusive "The Naked Edge?" After it's been on the market 6 months, she could lower the price to $3.99 or $2.99 and continue to earn royalties as you describe indefinitely but would pull the larger profit on the initial release; perhaps she would lower the price of the 1st book when she put the 2nd one out.

Sarah Elisabeth Sawyer said...

Glad I found this blog!

I've read several of the posts and comments, and think I'm down to just one question on self publishing my first ebook:

Should I have it prossionally edited? Are friends and critique groups enough?

Thanks, I look forward to keeping up with this blog!

evilphilip said...

Life would be best if the same people who want to be writers would learn to READ.

Apple's new subscription app policy has zero impact on the Kindle App. ZERO.

In fact, Amazon seems to have come to some kind of a partnership with Apple since the Kindle App for the iPad has been pushed big time on the front of Amazon.com all week this week.

I have said it in several threads, please if you don't understand technology don't fall for every 'scare story' put out by high-tech bloggers. Remember, those people get paid by how many pageviews their website push and so they want to spin every little thing out like the sky is falling.

(For those who are geeks, it is interesting to know that Gawker's new website design cost them over a million pageviews per site, per day. Ouch.)

Joe Konrath said...

why not recommend start the book at $9.99 like David Morrell did with his amazon exclusive "The Naked Edge?"

I love David, and consider him a friend, and wish he'd spoken to me before he listed his ebooks at $9.99. He would have sold 10x as many at $3.99.

evilphilip said...

How many self-pubbed authors are regularly selling this many? I don't see too many of us selling a thousand copies of any one title consistently.

I have a science fiction novel up on the Kindle (under a pen name) and it has sold 6 copies this month. Four of those copies were to me when I found an error in the formatting and had to download it multiple times to get it fixed. (Don't ask...sheesh!)

Food for thought.

Ellen Fisher said...

"I have a science fiction novel up on the Kindle (under a pen name) and it has sold 6 copies this month."

Exactly. I have books that regularly sell hundreds of copies a month. I have one that regularly sells less than ten a month. It's not easy to guess in advance how many copies any given book will sell.

chris said...

If a publisher is offering that amount then it's most likely because they believe it's a sure thing. If it's a sure thing then I say either push for more or do it yourself.

I'd be really worried that in 15 months, or whenever they get around to putting the books on the shelf, that the industry hasn't changed so much that they are either in chapter12 or cutting deals to save costs. We're seeing this already so it's not far fetched.

It could be in a few years the Big6 will be the Big3.

Mark Asher said...

"If a publisher is offering that amount then it's most likely because they believe it's a sure thing. If it's a sure thing then I say either push for more or do it yourself."

They believe in it, sure, but they are also pushing it into the bookstores. You don't get that push if you self-publish. It's a different ballgame. Publishers still think bookstores because that's still where most of the revenue comes from.

Mark Asher said...

Ok, so I will look at the numbers a bit differently. Let's say she decides to self-publish, but she sells at a rate of 500 a month at $3.99. At $2.80 profit per copy, that's $1400 a month. That's $16,800 a year. After ten years she's made $168,000, but that's after ten years.

She takes the $200,000 per book deal and pays an agent 15% and she has $170,000 after three years.

I also really think that ebook publishing levels the playing field, and a traditionally published writer doesn't necessarily have a lot of extra advantages. Even avid readers don't know the names of 98% of the traditionally published writers -- there are too many and they come and go too fast.

What I would ask Joe if I were her is how he is so sure she will sell 1000 copies a month? And at $3.99, a price he himself doesn't use.

shana said...

@Chris said: "I'd be really worried that in 15 months, or whenever they get around to putting the books on the shelf, that the industry hasn't changed so much that they are either in chapter12 or cutting deals to save costs. We're seeing this already so it's not far fetched."

Exactly.

Joe's friends conundrum is about more than just the question of should she take the trad deal $ and run or go indie.

The trad industry is imploding.

I agree it's hard to turn down what looks like a "sure thing" but is it really a sure thing?

I don't think the Kindle is the Betamax in this scenario.
I think the Kindle (and the Nook, etc.) is the VCR and the trad system is the Betamax.

Shana Hammaker
Twelve Terrifying Tales for 2011

no-bull-steve said...

"If ebook prices go down (and they will) it would be 75 cents for you on a $4.99 ebook"

That should be EFFing criminal. Every time I read some industry blah blah about not understanding why writers have such animosity toward the publishing industry. I dare ANY of them to come on this blog and logically explain how a writer deserves 17.5 cents on the dollar for their work.

"You assist an evil system most effectively by obeying its orders and decrees. An evil system never deserves such allegiance. Allegiance to it means partaking of the evil. A good person will resist an evil system with his or her whole soul."
~~ Gandhi


Stephen Prosapio
author, DREAM WAR
(yeah I know with that title Gandhi quotes are a bit ironic)

Christy Pinheiro said...

"Anyone who can get that kind of deal, can make it on their own either as well or better, but with full creative control.

And there you have it.

Zoe is right. Anyone that gets an offer for 200K from a publisher could absolutely, no doubt about it, make more money on her own.

200K means she's well-known, established, has name recognition and a platform. She could easily launch both of those books for about $2K-3K each and they would look fantastic with great editing and covers-- the whole nine yards.

Then she could just get her accountant to manage the finance issues (something I'm sure she's doing already) and she's done.

What's the real problem here?

IT'S FEAR.

My guess is that she's older; maybe has a family, she's worried about the changing times.

All I have to say about that is that I hope her agent makes damn sure the rights revert back to her when/if the publisher files bankruptcy.

K.L. Dillon said...

Just judging by your number count, you would think you've been working with e-books for the last five years. everything in this post is useful and also something you'll never read/hear from any advocate of trad. publishing.

Also, as a young writer new to the whole business of self-publishing, it would definitely be alluring to just get the 200k. But i think it's becoming more and more evident that self-pub is more author friendly. So why not do it?

Kevin L. Dillon

http://kevinlyledillon.blogspot.com

Lundeen Literary said...

evilphilip, I guess I must be illiterate.

MacWorld says:
"This is irrefutably a change in policy for Apple, and the ramifications are staggering even if you limit the scope to books. It means that Amazon, Barnes and Noble, and other booksellers will need to offer an in-app purchase option for all their books, and give Apple a cut of the proceeds.

If this were implemented today, it would be a disaster—there’s not even room in Apple’s system for all the books in Amazon’s catalog. And while a 30 percent cut on all sales in the App Store seems reasonable, that same 30 percent cut for content that’s neither tracked nor served by Apple seems high. It would be impossible for Amazon or Barnes and Noble to maintain existing book prices while also cutting Apple in for 30 percent."

There's the article: http://www.macworld.com/article/157585/2011/02/inapppurchase.html

Here's another one at PCWorld: http://www.pcworld.com/article/220074/apples_subscription_policy_is_a_poison_apple.html

ZD Net's take says that Amazon & B&N will be unaffected, because they are not the publishers of the content in question. Um, if I self-publish, that makes ME the publisher, and I owe Apple 30% by that reasoning.

http://www.zdnet.com/blog/hardware/update-apple-launches-app-store-subscriptions-clarifies-or-perhaps-not-in-app-purchases/11421

The LA Times:

"Previously, when users of Amazon's iPhone app wished to buy a book, the e-commerce company routed the customer to its own site, circumventing Apple's internal sales process for which it takes a 30% cut of the purchase price. The new policy came to light when Sony Corp. said Apple had rejected the latest version of its e-reading app for the iPhone over the sales issue."

Sounds pretty relevant.

Or how about this:

"Amazon would be required to allow for in-app purchases of that same material. Of course, in-app purchases are subject to the 30% cut directly to Apple, which would seriously affect Amazon’s ability to profit from ebooks. Remember, Amazon just recently told investors that so far this year ebooks are outselling traditional books. There are several ways to look at this, and I’m very interested to see which side blinks first as they both have quite a bit to lose."

(http://geekbeat.tv/apple-fires-the-opening-shot-at-amazons-kindle-app/)

We don't yet know how Amazon will respond. We do know that they WILL respond, and we can expect it to affect self-publishers IF the royalty structure changes.

Jenna
@lundeenliterary

S.J. Harris said...

I would imagine the majority of indie authors are selling about 2 books a day, like me. I would take $200K in a heartbeat.

Joe Konrath said...

What I would ask Joe if I were her is how he is so sure she will sell 1000 copies a month? And at $3.99, a price he himself doesn't use.

Her last book, for the first few months she was selling 800 a week at $9.99. Currently her ebooks are ranked pretty good, even at high prices.

At low prices, their rankings would be a lot better, methinks.

thepureindie said...

@ Mark Asher - "Even avid readers don't know the names of 98% of the traditionally published writers -- there are too many and they come and go too fast."

Are you sure? This avid reader has always searched for books by author, and I sure see a lot of posts on the forums from readers talking about the "latest ______." I have people email me "you are now an auto-buy." All of those things tell me that avid readers do know who the authors they like are and that they pay a whole lot of attention to who wrote what.

Ellen O'connell

Justin Alexander said...

At some point, an author is going to counter-offer the publisher: Sure, I'll sell you the print rights for that advance. But I'm keeping the digital rights.

Of course, if traditional publishers don't get in front of this freight train that offer will be irrelevant in 3-5 years. They'll have damaged their own industry to the point where you'll be better off selling your own print books online, too.

Archangel said...

as I mentioned, a lot of indie authors are concerned about plain of engagement suddenly laid between Apple toward Amazon /Apple wanting a cool 30% of anything Amaz sells through its apps on anything anywhere that is 'apple.' It would be hard to believe that Amaz would say, fine: authors 70%/ Apple 30%. We Amazies will just go without.

Im a mac user, high end graphics, outfit my offices in Macs. Rethinking it all very seriously. Absurd to buy tires from the guy who makes the portable gasser of authors... or so it seems so far

have to wait and see, but am puzzled by evil phillips post about us being ignorant... I mean I'd cop to that on various things, but in this re amaz and apple, I'm with Jenna: evilphilip, I guess I must be illiterate too.

MacWorld says:
"This is irrefutably a change in policy for Apple, and the ramifications are staggering even if you limit the scope to books. It means that Amazon, Barnes and Noble, and other booksellers will need to offer an in-app purchase option for all their books, and give Apple a cut of the proceeds.

If this were implemented today, it would be a disaster—there’s not even room in Apple’s system for all the books in Amazon’s catalog. And while a 30 percent cut on all sales in the App Store seems reasonable, that same 30 percent cut for content that’s neither tracked nor served by Apple seems high. It would be impossible for Amazon or Barnes and Noble to maintain existing book prices while also cutting Apple in for 30 percent."

dr.cpe

no-bull-steve said...

I know this is a Big Seller thread, but thought I'd update the people in my range: I've averaged exactly 5 sales a day this month and that appears to have me right at the 10k mark in rankings.

John Ward said...

Hey Joe,

I just discovered your blog last week. I've been reading through the archives. Your posts frequently talk about the message boards and communities that you, and other authors, frequent. You mention KindleBoards and Kindle Nation often. Are there other places, people should be visiting? Other groups that they should join and participate?

Thanks.

bowerbird said...

evilphilip might be evil,
although i'm not sure,
but he is also correct...

the amazon app has
never allowed you to
make a buy inside it;
it always kicks you
out to the web-store.

if anything changes,
apple and amazon can
fight that out amongst
themselves, but _you_
don't need to fret a bit.

you offer your e-books
through amazon, and
they take their 30% cut.

you offer your e-books
through apple, and
they take their 30% cut.

you are not the property
of amazon... wake up...

-bowerbird

Adam Heine said...

@Chris said: "I'd be really worried that in 15 months...the industry hasn't changed so much that they are...in chapter12"

This doesn't invalidate your point, but Chapter 12 is bankruptcy for family farmers and fishermen. I think it'll take longer than 15 months for the publishing industry to get that bad ;-)

J. E. Medrick said...

Haha, he probably meant Chapter 11 :D

... but I got a good laugh out of it, anyway ;)

J. E. Medrick

chris said...

re:Chapter 12
Oh, my bad. Now, why did I have 12 on the mind anyway... I was just reading about Borders.

wannabuy said...

@EvilPhilip:"The real joke to this post is that almost no one gets offered a $200k advance -- yet a ton of people can still live up to that 1,000 book a month goal."

Well said. Not to mention, for most authors, how long would they have to work before there were made any offer? $200k is an established name, with contacts, who would sell very well at $4.99...

Is that 'established name' willing to bet the bookstores haven't gone 'Chapter 12.' (ROTFLMAO... Perhaps they're secret fishermen?)

Neil

chris said...

Regarding the Apple/Amazon fee topic. It sounds like if you as a publisher sell on Apple you would lose the same 30% as if you sold on Amazon. However, if people want to buy from Amazon while on their Apple device then there is a 30% cut that has to taken from someone - and how that plays out is yet to be decided.

I could see Amazon saying, perhaps, that this cut will be treated as a "delivery cost", and hence, publishers would end up with 70% after that fee. Hence, 70% of 70% (approx.), or 49%. I don't know if that's what they would do, but it seems like one avenue rather than just reducing across the board the royalty rate.

On the other hand, I'd like to see all the distributors/content providers just saying "we won't sell thru your device at all". Imagine tomorrow you woke up to hear that Microsoft now wants a cut of all online sales made through their IE browser. It's absurd and I hope Apple gets slapped down hard. I know I will never buy any of their products - but I don't already because I prefer the freedom offered by other alternatives.

Joe Konrath said...

What's the real problem here?

IT'S FEAR.


Yes. And she admitted that.

Fear, and Stockholm Syndrome.

Writers have been conditioned to believe they can't succeed without a publisher behind them.

In reality, we're the essential cog in this machine. We provide the content. Without us, there is no industry.

But as essential cogs go, we've been severely undervalued. 14.9% writer ebook royalties, when a publisher gets 52.5%, is so lopsided its funny.

Joe Konrath said...

I would imagine the majority of indie authors are selling about 2 books a day, like me. I would take $200K in a heartbeat.

When you're starving, a moldy tuna sandwich looks pretty damn good.

But when there's a whole buffet spread waiting for you to dive in, and someone comes along and offers you that moldy tuna sandwich, you should go for the buffet.

If you're a good writer, with many books left to write, you won't sell 2 books a day forever. Eventually, you will make more than $200k. And trust me--you'll want to smack yourself for signing that bad deal.

Bev Morley said...

I've read a few "what ifs" in the comments, which is understandable, but "What if" everyone just bit the bullet and self-pubbed even a part of their portfolio? "What if" writers were to embrace self-publishing via Kindle etc as evolution. Let's face it - e-readers are already growing in popularity and providing a good source of income to a hell of a lot of authors.

Things will change, of course they will, that's the way of the world. But the kind of changes people are worried about will not happen over night. Make hay whilst the sun shines!! Technology is a fast paced area and waiting around to see what happens really isn't an option.

Robin Sullivan said...
This comment has been removed by the author.
Robin Sullivan said...

Since this author already has "nearly hit" the NYT she has a following and there is no question in my mind that she would sell more self published.

As for the 1,000 books a month - Michael does that on 5 titles (4 at $4.95 one at $6.95) and Nathan Lowell does that on two titles (both $4.95) and these are "new authors" from a small press.

All that being said...I think a year from now we'll look back at these times as the "Golden Age" of ebook publishing. The one thing we can be certain of is change. And to project sales out 3 or 7 years is folly as so much could change.

It doesn't change the equation for this author's situation but let's not kid ourselves that the great money that is being made by everyone right now is going to continue. I see a terrible trend with many people racing for the bottom and if we see all "indie" books at $0.99 the math looks a lot uglier.

Robin | Write2Publish | Michael J. Sullivan's Writings

Robin Sullivan said...

I think the ebook %'s will eventually change unfortunately it will take several authors "turning down" contracts based on that fact before the publishers adjust.

Robin | Write2Publish | Michael J. Sullivan's Writings

Melissa F. Miller said...

While I agree with the logic, I think there are just certain people who view being responsible for one's own career as somehow riskier than leaving it the hands of a traditional publisher/agent. I happen to think the exact opposite is true. I also think, though, that unless an author also has an entrepreneurial mindset, indie publishing won't be a great fit.

I just blogged about it today, in fact.

http://melissafmiller.blogspot.com/2011/02/why-indie-publishing-is-right-for-me.html

Melissa

Christopher Wills said...

I agree with everything you say; however it's easy to agree when it's not my $200k on the line. If I was offered $200k now it would be very tempting even though it is in 3 instalments, because for me it would be enough to give up full time work and write full time for a few years to see if I can support myself.
The one thing you didn't mention which strengthens your argument is the contract. Would she be signing away her ebook rights in the contract for ever, so that 5 years in the future she will be lumbered with a small % from what might become a bestselling book? She could regret that decision for a very long time.
Keep up the good work.

Robin Sullivan said...

@Chris - I don't know of any publishing house that will return them after a certain amount of time. Reversion clauses are almost always based on a certain level of sales - and that number is so low that it will make it so they will "tie up" those rights basically in perpetuity.

Robin | Write2Publish | Michael J. Sullivan's Writings

Sam said...

Justin Alexander: "At some point, an author is going to counter-offer the publisher: Sure, I'll sell you the print rights for that advance. But I'm keeping the digital rights."

That's exactly what I would recommend: sell the hardcover/pb rights only. Because CreateSpace gives you zero store distribution, missing out on a big market (even though e-books are fast becoming a bigger market).

With the high prices they charge, big publishers aren't even selling very many copies of their ebooks right now (yes, there are some $10/$14 ebooks in the top 100, but most languish at that price). So what percentage of the 2K advance actually pertains to the ebook rights?

A publisher might object: we're going to edit your book and design the cover, which counts for a lot. So something would need to be worked out there... And, you would have the issue of whether they'd let you publish the e-book months before the hardcopies came out.

Since the publisher has already put an offer on the table, it's definitely worth asking what their offer would be for hardcopy rights only...

S.J. Harris said...

But when there's a whole buffet spread waiting for you to dive in, and someone comes along and offers you that moldy tuna sandwich, you should go for the buffet.

But what if the buffet is 1000 miles away? You said something in a previous post about a bird in the hand. ;)

I hear what you're saying, though, and most of it makes sense. But at what price would you accept a traditional contract today? Low seven on a two book deal? You'd have to at least think about that, eh?

I know of some writers who are between contracts and have submissions out through agents. Are all of them just wrong? Is signing with a publisher strictly a bad business decision at this stage of the game?

Joe Konrath said...

Low seven on a two book deal? You'd have to at least think about that, eh?

No.

My book, Trapped, has earned $14k in the last six weeks.

In ten years, that's $1,200,000 at the current rate.

If a publisher gave me $1 million a book, I'd never get the rights back.

Since I expect to live longer than ten years, I've be losing money on the deal.

2 mil, upfront, I'd consider it. But I'm still hoping to find a nice place in the Top 100 to hang out for a while, and will make several attempts to do so this year. If that happens, I'd also walk away from 2 million.

Michael Allen said...

Fascinating. And, as usual, very valuable. Thanks, Joe.

It occurs to me that many newbies must be scratching their heads a bit. At least, they are if they’re paying attention. Joe tells us that this lady has had several previous contracts (with a traditional print publisher) for $200K a book, but so far none of her books have earned out their advance, even six years later. And Joe comments that ‘This is common, by the way.’ Which is true.

And newbies may be wondering why this lady is now being offered a new contract for $200K, if the publisher was apparently out of pocket on the earlier ones. (Because he was paying her more than was called for by the royalty rates set out in the contract.)

The answer is that the publisher has been doing very nicely out of this lady, in the pre-digital age, and would like to continue doing very nicely by underpaying her on digital books.

A few years ago I did an article about advances for the UK Society of Authors journal, The Author. The article was based on the data provided via a number of reports on the UK book business.

What these reports demonstrated was that royalty rates are more or less meaningless, at least for any author other than a first-timer. Once regarded as ‘fair’, the standard print-book royalties now only apply to complete suckers and beginners. UK publishers can be shown, by the data, to have been systematically paying authors sums which far exceed the nominally due royalties, AND (and this is the point) the publishers can be shown to have been making handsome profits despite that. Indeed, I personally found it difficult to avoid the conclusion that most firms, in respect of most authors, were systematically stealing money from the little guys and the financially naive. But then, we’re getting used to this kind of concept now, aren’t we? What with the banks and all.

I hesitate to advise any author in this lady’s position. But one possible solution might be for her agent to negotiate a separate (substantial) advance for ebooks income, which represents a decent nominal royalty rate, and with an agreement that that royalty rate will continue to apply if the ebook advance is ever earned out. And, most important, this arrangement should be for a limited term, extendible only by mutual agreement.

An ‘advance’ by the way, is seldom an advance at all. In the case of a first book it’s a actually a retrospective, because all the hard work has been done. And even for a book that is yet to be written, the payment merely reflects the years of unpaid toil and the hard-won experience, not to mention the work yet to be done.

Belinda said...

Brilliant, Joe. I love your blog.

gniz said...

All due respect,

But I take the 200k advance and then write another book and self-pub that. If this author is even remotely prolific, she's got another novel or two lying around that could be put up there. If she's not comfortable using a "drawer" novel, then write something else fast--even a novella--and get it up there.

I don't subscribe to this kind of feeding frenzy that I see happening in the comments section here. Some have gone so far as to say she's being motivated purely by fear, etc. Easy to say when you don't have 200k per book staring you in the face.

I reckon most of you would in fact take it--excluding Joe and a very few others. And I think you'd be right to do so.

This industry is in a very uncertain time period. We don't yet know where things are going to settle and predicting ANYTHING out two or three years is a bit presumptuous. I hope to god the ebook royalty scheme continues but I notice that joe shies away from this conversation because I think he knows its not a very comfortable line of conversation to follow.

As long as the royalty and pricing structure is as uncertain as it is, and things are so new and changing so rapidly--we're fools to try and tell someone else what to do when it comes to this kind of payday.

Why not do BOTH? We're writers. It's what we do. If you can't write fast enough, I won't shed any tears for you. Write faster. Get some balls. Put up a novella or two on kindle and nook and also take the 200k deal and smile all the way to the bank.

Aaron
epubmanifesto.blogspot.com

Joe Konrath said...

But one possible solution might be for her agent to negotiate a separate (substantial) advance for ebooks income,

Won't happen. Unless you're a huge bestseller, I've heard that publishers are iron clad on ebook rights.

Maybe, when enough authors jump ship, this will change. But by that time, publishers aren't going to have anything left to offer, other than an advance.

An advance with poor royalties is like a balloon loan, which costs you more and more over time. Or a life insurance policy, that pays out less and less as you age. In either case, it's a bad deal.

Selena Kitt said...

I reckon most of you would in fact take it--excluding Joe and a very few others. And I think you'd be right to do so.

I wouldn't. But I'm not Joe or Amanda Hocking writing in a popular mainstream genre either. Still I'm doing just fine self-publishing in a niche market, and if someone DID come knocking for $200,000 for two books... I'd turn it down at this point. I've made that much already this year, so what's in it for me? And on principal... big publishing leaves a bad taste in my mouth just thinking about it, regardless of their marketing power. It would very much feel like selling out at this point. As Joe says, all writers are whores - so sure, I'd probably sell out at a certain price. But $200,000 isn't it right now.

Joe Konrath said...

Some have gone so far as to say she's being motivated purely by fear, etc.

She is being motivated by fear. She told me so.

We don't yet know where things are going to settle and predicting ANYTHING out two or three years is a bit presumptuous.

I dunno. If anything, my predictions from two years ago weren't bold enough. Lots of what I said would happen did happen, but it happened bigger and faster than I could have guessed.

The Kindle is selling in the same bell-shaped pattern as the iPod did when it started out. I'm comfortable in stating that ebooks are soon going to be the preferred method of reading. And we haven't come close to hitting a saturation point yet. We're still with the early adopters.

I hope to god the ebook royalty scheme continues but I notice that joe shies away from this conversation because I think he knows its not a very comfortable line of conversation to follow.

Not at all. I just find it silly to speculate on something that has no precedent.

I've seen how new, digital tech changes industries.

I've never seen royalty rates drop in the publishing industry. The only change that has happened in 50 years is agent's going from 10% to 15% commission.

Besides, if royalty rates drop, self-pubbing is still the better option. Let's pretend Amazon cuts it back to 35%. That means you'd be getting 7% ebook royalties through a publisher. Self-pubbing is still the much better deal.

Why not do BOTH?

Right now, I'm looking at all the money I could be earning on my Jack Daniels series but aren't, and it is eating me alive. I'm hemorrhaging hundreds of thousands of dollars because my publisher has those rights and is charging too much/paying me too little.

The advance money I got from those is long gone, and the royalties I receive are pathetic compared to what I could make on my own.

Doing both means getting screwed. Worse, it means getting screwed forever.

As long as my publisher is still in business, I won't ever get those rights back.

It's like being trapped in a bad marriage with no possibility of divorce.

Doing both isn't good advice.

Kathleen Valentine said...

Those are some very impressive numbers. I was just discussing this on Anne Rice's discussion group yesterday. Ms. Rice, the distinguished writer of vampire tales, claims authors are struggling to stay afloat because people aren't reading any more. I claim it is the trad-publishers that are killing writers. I'm going to refer he to this column to see your numbers.

Stitch said...

Joe said:

"Now a publisher offers more than just creating and distributing books. They also edit, do the cover art, do the printing, shipping, and uploading.

But do you want to pay them 52.5% forever for those services?"


This is something I, and others, have said before in the comments on earlier posts.

And yet, there are still people who want to go the "traditional route" partly because they would get editing, cover art, etc, "for free".

Remember, people, just because you don't pay anything up front, out of your own pocket, it doesn't mean it's free. Nothing, nothing, comes free of charge.

Christy Pinheiro said...

Some have gone so far as to say she's being motivated purely by fear, etc. Easy to say when you don't have 200k per book staring you in the face.

I said she was motivated by fear because she is being motivated by fear. It's the same reason why I stayed at a painfully boring job for years (where I had to put my son in daycare) when I could have been writing.

I'm a nobody. A no-name author with no platform, no bestseller, and no books that have ever been in the top 100. Last year, my little dog and pony show grossed 170K. I had expenses, of course, but I made a very nice income writing.

Joe's friend, on the other hand, is a powerhouse. She's not a mid-lister. The 200K advance tells you that.

Maybe she can only produce 1-2 books a year. Some authors are like that. But even so, it's not a race-- it's a marathon. She could produce 2 books a year forever and be rich if she just had the gumption to self-release the first one.

McDermott said...

I'll preface this post with the warning I'm a complete newbie here. I'm unpublished and currently on the query go round with my first book. I discovered this blog some weeks and have been lurking since. It's been an eye opener.

What strikes me most about Joe's friend's situation is that for the first time (probably ever), she has a choice. One of the ways traditional publishing has kept the Genie in the bottle is by ownership of the distribution channel. Those daring to self publish faced the stigma of being declared 'unclean' and forever banned from the world of 'real' writers. Thanks to Joe and folks like him, that's no longer true.

Suppose his friend does elect to self publish and it doesn't work out as she hopes? That's the breaks, but I think the important thing is that she's is no longer necessarily risking her entire career by that decision.

I think we all have Joe (and the rest of The Mid List That Roared) to thank for that situation. Along those lines, last week I realized that I'd been lurking here and sucking up info like a sponge while contributing nothing.

I decided to remedy that by buying a copy of Shot of Tequila in paperback. I wanted to read the book and also to see a Create Space book. I wasn't disappointed! I devoured it in one sitting and will be ordering more.

So! To any of you who are lurking out there who haven't yet tried Joe's stuff, I suggest the following:

Support the guy! Buy some freakin' books!

chris said...

A crazy thought just occurred to me. I think Joe believes in the future of eBooks - but is he a gamblin' man? Why not make a deal with your bestseller friend. If she goes self-pub and makes more than the 200k, then she'll split the extra with you 50/50. But if she makes less than the 200k, you make up the difference to her.

I don't expect you to take that seriously but what do you figure are the odds you'd pay out vs. take some free cash home?

Selena Kitt said...

A crazy thought just occurred to me. I think Joe believes in the future of eBooks - but is he a gamblin' man? Why not make a deal with your bestseller friend.

Bwah! I love how easy it is to spend someone else's money :)

Joe Konrath said...

I don't expect you to take that seriously but what do you figure are the odds you'd pay out vs. take some free cash home?

Won't work. She will make $200k.

It may take a while, but it will happen.

Steve Umstead said...

Excellent article, Joe - I love seeing all aspects of self-publishing, whether it's absurdly-successful authors making money hand over fist, or authors like Guido struggling to get started, or your friend here who has a big choice to make.

S.J. Harris said...
This comment has been removed by the author.
gniz said...

Look, I admit that I believe ebooks are the future. I have been self-publishing everything I've got, and I'm actually starting to sell some in my second full month (on track to do close to 1k copies this month).

That being said, I still have a book out with an agent and if I'm offered a traditional publishing deal, for a lot less than 200k, I will take it. I write a lot. I don't think having 1 book with a publisher would kill me.

I think hedging your bets to some degree can still be a smart move. Not for everyone. If you're like Selena and Joe and some others, the money potentially lost by going the traditional route is not worth it and even in just the next few months your sales figures and income will eclipse a regular book deal.

But not everyone fits in that camp.

And everyone has different levels of comfort with risk. Sure, there's risk either way. And most likely, self-pubbing is going to be the way to go. But some of us like to play it safe and I don't think there's anything wrong with that.

You can say it's fear, but sometimes it's smart to be cautious around things we don't totally understand.

Joe Konrath said...

I don't think having 1 book with a publisher would kill me.

I believe that everyone had a different path to follow, and different goals to pursue.

But if you do get that book deal, a few years down the road you're going to want to hang yourself.

Or worse--you'll wait a year for a book deal that doesn't come, when you could have been building an audience and making money this whole time.

I do hope you get your wish. I also gotta say be careful what you wish for...

Robin Sullivan said...

@Sam said...Since the publisher has already put an offer on the table, it's definitely worth asking what their offer would be for hardcopy rights only...

I think there is ZERO chance of that happeneing.

Robin | Write2Publish | Michael J. Sullivan's Writings

Christy Pinheiro said...

Since the publisher has already put an offer on the table, it's definitely worth asking what their offer would be for hardcopy rights only

I agree with Joe and Robin. A publisher would never agree to sever the ebook rights.

I've had a few people ask me (via e-mail) who I use to produce my own books, and I use CreateSpace, Pubit! and the Amazon DTP program for distribution.

As for the formatting, legal, and other issues, I use These People.

Most of them are my friends (or acquaintances), and one, Lynn O'Dell, is actually the very well-known book reviewer Red Adept.

Nellie Jacobs said...

It's one thing to write it. It's another to post it. The BIG thing is getting people to find out about it and want it. How to market effectively is the question....

gniz said...

"How to market effectively is the question..."

It's funny though. My book that's currently selling the best is something I put under a totally different name from all my other work and did literally ZERO promotion for it.

Not that its paying my mortgage, but still. The stuff I link through my blog and twitter is doing okay but not nearly as well...

evilphilip said...

"evilphilip, I guess I must be illiterate."

No, but you might need to start being clever.

Amazon is NOT a subscription service.

The change in policy is toward subscription services -- things like Netflix that offer a recurring monthly payment to the service and Apple doesn't get a cut of that.

The Macworld article you quoted isn't even talking about the Subscription policy change, they are talking about the previous "the sky is falling" moment when Apple refused to allow Sony's eBook App approval because Sony's App DID include an option to purchase books in-App and Apple wasn't getting a cut.

Amazon's Kindle App avoided this problem a long time ago -- it doesn't allow you to purchase your books in-App and thus doesn't voilate any of Apple's policies.

Remember the part about learning to read?

Again, I appreciate that you did a ton of research, but you can't trust high tech bloggers who go around saying that the sky is falling any time anything happens. Until you see a real announcement from Apple or Amazon then it is business as usual.

Both of the recent articles you quoted don't even apply to Amazon or the Amazon Kindle App.

evilphilip said...

I should also mention that my Science Fiction alter-ego was happy to get those two sales at $2.99.

That is $4.08 that I didn't have last week.

Everyone has different goals and despite what I see as a pretty slow beginning (my novel has a professional cover and razor tight editing... the description could use a little work) I don't expect it to sell 2 copies a month forever and that $4.08 is in addition to the 200 copies of my zombie novella that I sold (under my own name) so far this month.

And the month isn't over. At the end of the month I imagine I'll end up with a modest $100.00 check from Amazon. That is $100 I didn't have before and I still own the rights to my novella and my novel and the short story I have up on the Kindle.

In late May I'll have another Zombie novel up on the Kindle and in September another one.

At that rate, it will not be long before I'm outselling any advance a big publisher would offer for a zombie novel from an unkown author.

More food for thought.

S.J. Harris said...

Four of those copies were to me when I found an error in the formatting and had to download it multiple times to get it fixed.

How did you buy multiple copies?

Also, you can just email the file to your Kindle to check formatting.

evilphilip said...

Not to spam posts, but I did want to add that I think Amazon's Kindle App is also the horse of a different color.

Apple might have their own book store, but I think even a corporation as greedy and self-centered as Apple can see how much value the Kindle App brings to their product. They know Amazon is the #1 source for books and they know that isn't going to change.

Doing anything that would force buyers to move away from the iPad and start reading their books on a real Kindle is a bad move for Apple.

SuburbanSurvivors said...

Those are impressive figures!

Self-publishing is less about how much money an author can make on a book and more about career or how much money can be made by using the book to build a platform for other books, credibility, or a business. Rick
http://www.selfpublishinghouse.com

Tara Maya said...

If you don't mind my tossing out a slightly off-topic question, does anyone know if there's a way to post a different book or the same book with a different cover to Amazon UK? Also, why does the Amazon UK site tell visitors that they have no pricing information about my book...when I've separately set the price in pounds?

Tara Maya
The Unfinished Song: Initiate

wannabuy said...

AT&T's CEO notes that the median Kindle reader reads books on three devices!:
http://www.businessrevieweurope.eu/tags/ipad/kindle-app-greatest-cloud-based-business-decision-decade

Neil

Anonymous said...

@Selena:

"Still I'm doing just fine self-publishing in a niche market, and if someone DID come knocking for $200,000 for two books... I'd turn it down at this point. I've made that much already this year...."

Ok, you surely mean in some kind of fiscal year that is almost over. You haven't made $200,000 in 2011 already have you?

If so, I'm getting out my thesaurus and compiling a list of synonyms for penis and vagina and getting started on that erotica.... :)

Jamie said...

@evilphillip: Apple's new policies disallows the browser switcheroo that the Kindle app currently uses. If an app allows out-of-app purchases, it MUST allow in-app purchases and the price point for the books/subscription MUST be equal whether purchased in-app or out. Apple isn't run by idiots. They've probably had their lawyers on this for months. There are no loopholes.

Jamie said...

@RobinSullivan
I think the future of e-book pricing is already out of writers's hands.

Amazon wants it as low as possible (enough so that they are willing to eat the cost to keep hundreds of trad e-books at a low price) and readers want it as low as possible. The rallying cry of indie authors has been that e-books should not be priced as high as they are now by traditional publishers.

To my mind the Itunes store is a case study. The artists and record companies wanted to offer variable prices, but they lost in the end. Apple said it's our platform (Itunes) and our hardware (Ipod) and you'll just have to fall in line. They did. The addition of the Beatles catalog a little while ago marked the end of an era.

I believe moving forward that content providers will have to start selling on volume. Telling authors to hold the line is useless when the platform owners and the consumers are aligned on this point.

Will there always be a few people who march to the beat of their own drum? Yes. They exist in every industry. But the dominant market (Kindle, Itunes)is too important for most people to ignore.

Anonymous said...

"Apple's new policies disallows the browser switcheroo that the Kindle app currently uses. If an app allows out-of-app purchases, it MUST allow in-app purchases and the price point for the books/subscription MUST be equal whether purchased in-app or out. Apple isn't run by idiots. They've probably had their lawyers on this for months. There are no loopholes."

Actually, it's possible (though not likely IMO), that Apple is talking only about subscription services. Buying a book is not buying a subscription.

I think they will include all sales made through apps eventually, if not by the June deadline they set. And they will boot apps that don't comply.

Users should still be able to open Safari and browse to Amazon, and Amazon will have a web-based Kindle reader ready, so there will be a workaround. It will still probably end up pushing some people to iBooks.

And iBooks is an interesting topic for self-publishing writers. How do you get on it? Two ways I know of. 1) Let Smashwords push your book onto iBooks. You get 60% of the sale. 2) Do it yourself. You'll need an ISBN and a way of uploading your book from a Mac. That part sort of sucks for us PC users.

I've also heard that Apple is stricter about policing content and doesn't like erotica.

Selena Kitt said...

Ok, you surely mean in some kind of fiscal year that is almost over. You haven't made $200,000 in 2011 already have you?

That includes Q4 sales (which are counted in 2011 because they aren't paid out until 2011). So that's Q4 + January and part of February. So that means I've made (actually over) $200,000 in four and a half months.

I've also heard that Apple is stricter about policing content and doesn't like erotica.

Ha. That's funny. It was Amazon who pulled my books and not Apple. They're still up and selling happily over at Apple.

Ruth Harris said...

"The only change that has happened in 50 years is agent's going from 10% to 15% commission."

Plus charging for stamps, postage, messengers, Xeroxing, etc. They didn't used to do that. Came out of their 10%. But that was the good old days.

Linda Pendleton said...

Obviously, she has a difficult decision to make. I would imagine the only thing she may be giving up by self-publishing is promotion. But if she is a big enough name, as it sounds she is, she may be able to generate all the promotion she needs.

The one thing I love about ebooks at Kindle, Smashwords, and POD through Createspace (at $39, not their expanisve program) is the joy of freedom and not having to ask "permission" to share my work, and that of my late husband, Don Pendleton.

And I have a great cover artist, Judy at http://www.jaebeecreations.com/,
and we've worked together for tne years.

I'm pleased with the changes that have taken place in publishing, including the lifting of the stigma against self-publishing.

Walter Golden said...

There is one thing to remember. Nothing stays the same. Right now if you are in e-publishing you are at the right place at the right time. However fifteen months from now that might not be true.
Everyone who is a writer have friends who have a manuscript that is junk.
Now they can publish it. Will the Kindle have the reputation that some of the self publish print houses have?
Can Amazon, Smashwords or Nook live with the reputation of pushing junk, or will they make changes that will affect us? What will Amazon and Apple look like fifteen months from now?
I think she should grab the money now and see if she couldn’t E-publish four new books in the fifteen months in the fifteen months before her book is in the book stores

J. Noel said...

Being in sales, it's akin to either taking job with a safe base salary plus a little bit of commission. Or going to a 100% commission sales job.

If you're good, you'll end up up with more in your pocket if you leave the parachute behind. But it's still a risk if writing is your main source of income.

bowerbird said...

> Apple's new policies disallows
> the browser switcheroo that
> the Kindle app currently uses.

neither apple nor amazon has
said that, not publicly, anyway.

until they do, we do not know.
you don't know. no one knows.

and it doesn't matter anyway,
because amazon is capable of
doing an all-browser strategy,
and will if they are forced to...

and apple knows that too...

what we're seeing is posturing,
and it's best to remember that.

-bowerbird

Glenn McCreedy said...

Great analysis of the numbers, it appears that few are looking at these fiscal realities with the same clarity as Joe Konrath. It may be that looking back on this year, we will say, "that was the year that was like the Internet boom of 1998."

Regarding Joe's comments on CreateSpace and POD as part of the business analysis (to self pub or not to self pub), I heard an independent bookseller remark, "I order from Ingram and if you can get your book POD on Ingram it would be a heck of a lot easier for me to include your book in my weekly order."

Turns out that Lightning Source does precisely that--offers POD and distribution through Ingram. Of course, CreateSpace and Amazon have a powerful distribution system. We're publishing on Kindle. Anybody have experience with Lightning Source or have thoughts on that?.

We have a Kindle-published horror novel, Darkscope, a ghost story set in Bisbee Arizona, first published by Kensington, that was hand sold big-time by this same bookseller in Bisbee. When the book went out of print, the sales dried up necessarily-no product. Now with POD, she can hand sell this book to the tourists again, she's just looking to have some efficiency in her business instead of dealing with multiple ordering scenarios, including authors self-publishing POD and through other channels like iUniverse. Understandable, yes?

Selena Kitt said...

"I order from Ingram and if you can get your book POD on Ingram it would be a heck of a lot easier for me to include your book in my weekly order."

I believe if you opt for "expanded distribution" with CreateSpace (it costs a one-time fee of $39 and then $5 a year after that, although they've waived the yearly $5 fee the past 2 years in a row) you are also distributed through Lightning Source and hence Ingram.

You make less money through those channels. But you can still get there from here. :)

Christy Pinheiro said...

Turns out that Lightning Source does precisely that--offers POD and distribution through Ingram. Of course, CreateSpace and Amazon have a powerful distribution system.

If you publish with Createspace, then you can opt in to expanded distribution, and LightningSource does the fullfillment. You can also use CreateSpace and LightningSource together as long as you own the ISBNs.

CreateSpace is easy, and wholesale copies are very cheap. LSI is a little less user friendly but you can choose your own discount percentage.

I've used CreateSpace with great success for years, but this year I will be using CS and LSI and I will post my experience in a few months.

If you plan to sell most of your copies as ebooks, (say, 80%) then CreateSpace is really the only way to go-- it's so easy and the title set up only costs %39 per title, plus the cost of the proof (about $15).

evilphilip said...

"It may be that looking back on this year, we will say, "that was the year that was like the Internet boom of 1998."

The Dot-com (Dot-bomb) crash was in March of 2000. Only two years later.

Bad example.

evilphilip said...

"what we're seeing is posturing,
and it's best to remember that."


I would say that what we are seeing is rampant paranoia and mindless speculation by tech bloggers who get hits based on how much traffic they can drum up for their articles.

Tech bloggers telling you that Amazon is going to have to change how the Kindle App works is essentially big tobacco telling you that smoking is good for you.

Sideburns said...

I see a lot of posters here asking "What if..." and always describing terrible outcomes. It's almost as though they either can't imagine things going well for a self-pubber or they want to discourage people from doing it. In the computer field, we have a term for that, FUD: Fear, Uncertainty, Doubt. It's exactly the same thing Microsoft does to frighten big customers out of any ideas they might have of moving to Linux, Firefox or OpenOffice.

Yes, people, we all know that not everybody succeeds, but with 40,000,000 ebook readers in the US alone, and more sold every day, there's a vast demand for reading material and story tellers always do well when the economy's bad. I don't know about the rest of you, but I'm getting my first novel ready as fast as I can before the window of opportunity closes.

Robin Sullivan said...

Joe Konrath said....My book, Trapped, has earned $14k in the last six weeks.

In ten years, that's $1,200,000 at the current rate


To think that Trapped, or any book for that matter, would maintain good sales for 10 years is unrealistic. How many books of 10 years ago still sell more than 1,000 a month? I agree that sales of ebooks have a longer tail then those promoted by a NY firm but 10 years? I think this is a bit optimistic.

Robin | Write2Publish | Michael J. Sullivan's Writings

Robin Sullivan said...

evilphilip said...
"It may be that looking back on this year, we will say, "that was the year that was like the Internet boom of 1998."

The Dot-com (Dot-bomb) crash was in March of 2000. Only two years later.

Bad example.


Actually I think it is a very good example. What we are feeling right now has all the earmarks of the roaring 20's before the crash, the pre-dot com bubble burst, and real estate before it went belly up.

Times are good, and I feel fortunte to be in the right place at the right time...but to think it will continue indefinitely...What we know is things change and someone here mentioned no one knows what the future is - I agree.

The biggest issue with ebooks is you are putting virtually all your eggs in one basket - well maybe 1 1/2 because B&N (I know a lot of people sell as well or better there but most are making the lion's share of profits on Amazon)

With traditional publishing comes bookstore, library, and more opportunties for foreign rights. A bit of diversification if you will. I lost hundreds of thosands of dollars when the tech bubble burst. I'm all for making hay while the sun shines - but I'm not foolish enough to think that it might all disappear one day.

Robin | Write2Publish | Michael J. Sullivan's Writings

Nicholas La Salla said...

Insightful post as always J.A. I think it is definitely in the author's best interests to consider the options before signing any kind of contract in today's market.

If a publisher offered me a $200,000 advance, it would be REALLY REALLY hard to turn that down, coming from living on under $30,000 a year with a wife and two kids. The trouble in my eyes would be that the publishing industry may capsize before the year to a year and a half it takes to actually get a book on the shelf.

And then what if there are no bookstores, hence no bookshelves? If I'm going to be an e-book exclusively, I may as well publish it myself. I may not make $200,000, but at least I'll have the ability to do what I want when I want and not have to worry about getting a month or so of shelf time, and then getting tossed into the bargain bin.

I don't think there's any reason to think an e-book won't sell well ten years after its release. There's an eternal shelf life on e-books, word of mouth about newer titles will prompt interest in the back catalogs.

I'm excited to get started on this publishing game. I recently put together the cover of my first e-book, which I'm hoping to release by the end of the month.

No time like the present, like the saying goes -- this book is one that is very personal to me, and I'm looking forward to seeing it get its legs and start walking.

Ten years from now...well...who knows?

- Nick

Archangel said...

"A publisher would never agree to sever the ebook rights. "

I think that's correct much of the time. And... There are competent print on paper publishers that will agree to not take e-rights... or audio... or foreign. Depends on their vision of relationship with author for future, I think. I've signed two such in the last six months/ keeping erights. It does exist.

And, I sense, knowing the inside shenanigans over many decades now in big ny pub, that depending on agent, not just skill, but I O U's in the business (such as, funneled two blockbusters to certain editor... who now will try to rock and roll with crossing out contract clauses favorably for a third author (logrolling happens a good deal, publishing-agenting seems anything but cut and dried)

My sense is it never ever hurts to ask. Be bold, be bold.

Also know authors who have broken big 6 contracts for various reasons and same company, even same editor, negotiated payback of advance at 25% for one author, 100% for the other author. Dont know if had anything to do with outcomes, but literally one author had a talkative/flirty female agent negotiating breaking contract/taking back rights with a rather charming male corp lawyer. The second one had an 'all busines's male agent negotiating with a hard-head male lawyer. I watch in wonder how different outcomes can be based on any number of random factors.

All the more reason to ask whomever, for whatever. The worst is a no. The best might surprise.

dr.cpe

Sheri Leigh said...

I was at a Borders liquidation yesterday. It's truly the end of an era. It really may be the beginning of the end for publishing as we know it.

Jude Hardin said...

If you sell your book for $.99, you'll have to sell 571,428 copies to make $200K. If you sell your book for $2.99, you'll have to sell 98,039 copies to make $200K.

If you consistently sell 1000 copies a month (and that's a BIG if) at $2.99, it will take you a little over eight years to make $200K. If you consistently sell 1000 copies a month a $.99 (again, a BIG if), it will take you over forty-seven years to make $200K.

Plus you have to pay for a book cover, editing, formatting, and all your own marketing.

I say take the money and run.

Robin Sullivan said...

Archangel said...
I've signed two such in the last six months/ keeping erights. It does exist.


I'm curious - can you tell me who the publisher(s) were?

Robin | Write2Publish | Michael J. Sullivan's Writings

EB said...

Excellent post! Very useful to see real world number crunching scenarios.

Also, the discussion on fear is very real. As Borders just shut down 200 stores, many more brick and mortar stores will be closing in the next couple of years. Digital will win out and there won't even be a discussion as to which way to go because there won't be any advances from beat down publishers other than to people with massive built-in audiences like Justin Bieber and Cher. The real problem writers should fear is the dreaded "p" word....piracy.

Anonymous said...

The DearAuthor blog has a write up on last week's Tools of Change. Among all the other information there is a reference to publishers needing to have a conversation with their authors who might go independent about what the publishers could do for them. I think it's Carina Press-- Harlequin's digital only imprint.

Helen Ginger said...

Thanks Joe. I know you keep repeating yourself (in different ways), but it's beginning to sink in. Perhaps a year ago or even a month ago, your friend wouldn't have even called you.

The numbers are almost overwhelming to a non-math person, but that just means we have to study them longer. Whether you're getting published by a house or on your own, you have to do and understand the numbers.

wannabuy said...

Interesting thought.

$200k isn't a good offer with ebooks at 10% of the market. This implies that once ebooks are 20% of the market, my prediction of the 'tipping point,' there won't be any turning back. Of course, with the 15 month time lag, it will take a while for the pipeline to dry up...

Just imagine what this discussion's numbers will look like in a year...

Neil

Stitch said...

EB said:
"The real problem writers should fear is the dreaded "p" word....piracy."

Please explain why writers need to fear piracy.

You make money by offering a product that people want, in a format that people want, at a price that people are willing to pay.

The only people actually losing money because of piracy are the ones that refuse to adapt to the formula above. Like publishers charging too high prices for files locked with DRM. And stubborn self publishing writers talking about "devaluing" their work.

Piracy is the best thing that can happen to you as a writer! It means people are interested in your work!

If no-one wants to read your work for free, how do you expect to make money from it?

Stitch said...

Piracy is killing the music industry, piracy is killing the movie business, piracy is killing computer games, piracy is killing book publishing. Doom, doooom, DOOOOOM!

And yet, new music is still being produced, despite the music cassette, despite the recordable CD, and despite the net.

New movies are still being produced, despite the VCR, despite the recordable CD, despite the recordable DVD, and despite the net.

New computer games are still being produced, despite the cheap cassettes, despite the cheap floppy disks, despite the CD and the DVD, and despite the net.

Tons of new books are being published, despite the photocopier, despite the scanner, despite libraries, and despite the net.

KevinMc said...

"To think that Trapped, or any book for that matter, would maintain good sales for 10 years is unrealistic. How many books of 10 years ago still sell more than 1,000 a month?"

I think we don't have enough data on this to know how things will go.

Right now, people are still seeing steady sales growth. How much of that is because books will actually have a years-long tail, and how much is because the ebook growth rate is faster right now than the ebook publication rate?

What happens when the ebook growth rate slows down in a couple/few years, and the rate of book publication continues as is?

I don't know. Don't think any of us do. I do think that having a large body of work at that point will be a big advantage...but beyond that, I don't think we have enough data. It's a new world, and we're only on the threshold, the changeover point. Predicting what it will look like as a mature industry is tough.

Moses Siregar III said...

A good post on the race to the bottom in ebook prices from ireaderreview.

And I quote:

"1. Percentage of books at or below $5 out of the Top 100: 5% in 2008, 22% in 2010, 48% in 2011.
2. Percentage of books at $1 out of the Top 100: 0% in 2008, 4% in 2010, 21% in 2011.

The best way to put it would be -
In 2008 there were zero books priced at $1 out of the Top 100 bestsellers of the year.
In 2011 there are 21.
In 2008 there were only 5 books priced at $5 or below out of the Top 100 bestsellers of the year. In 2011 there are 48.

We have gone from 5% of the Top 100 books being at or below $5 to 48%. It’s an incredible change."

_____

Btw, the main reason for this is simply the rise of the indie. But it's also definitely a trend.

For the record, I think the race to $1 is a bad thing for authors and in many ways a bad thing for readers, too, because it's bad for traditional publishing and because with less profit to be made by indie authors at 99 cents, less time and energy will go into the production of indie books, as well.

Moses Siregar III said...

Most authors will simply make less money at these prices, while relatively few will make more.

And again, I think pricing a book or two at 99 cents is smart from a promotional standpoint.

Coral Russell said...

It will be interesting to watch the Apple/Amazon thingy, but there is a quiet investigation going on as to ebook price fixing and they're both named in the investigation, along with others.

As for the $.99 - I've read a lot of unknown Indie authors. They're good, but still have more edit problems then the mainstream authors and they're unknown to me. If I'm not sure whether I'll like an author, I get a copy of their book cheap or free at the library.

bowerbird said...

lots of authors are now
seeing that they benefit
_greatly_ from low prices,
regardless of how loudly
some people try to deny it.

many writers are now
making great money
from the new system,
when they made little or
no money from the old.

readers, of course, do
not need to be persuaded
that low prices are good.

both writers and readers
are very happy to observe
that authors now can get
a bigger percentage of
the money readers pay...

it's quite sad that the
bald vast greediness of
the corporate publishers
ruined their industry and
took down bookstores
in the process, but we
warned them all along
that they had to change,
and they did not listen...

-bowerbird

Marcel said...

Moses: with less profit to be made by indie authors at 99 cents, less time and energy will go into the production of indie books

You mean more right? I mean, if the writer makes less profit on a single book, he will have to write more books. How would writing less books help?

Moses Siregar III said...

You mean more right? I mean, if the writer makes less profit on a single book, he will have to write more books. How would writing less books help?

In other words, if you think you're going to make $10K on a book, you'll spend less time and energy to create that book. If you think you're going to make $100K on a book, you can spend more time and energy on editing, advertising, cover design, writing, etc.

Cheaper prices will lead to less polished books.

Tara Maya said...

But Moses, the previous statistics had no way to count people who bought used books, did it? Are the used books sold on Amazon counted toward the book's rank? (Shouldn't be, since the author and publisher get no money)... It certainly doesn't count the $1 books people bought at yard sales and such. Speaking for myself, I've been buying more of "cheap reads" online than used, but actually buying more new books overall.

I do think that it's going to get a lot more competitive in the top 100. That's going to make it harder to garner that "Bestseller" label boost. Butat the same time that's because books are selling in higher volume. So, whereas before it might have been possible to get into the Top 100 with sales of 100 books a month, then 1000 a month, in the future, it might take 10,000 sales month to make that list.

But that means that lots of authors must be selling more than 1000 books a month. Is that bad?

I'm not saying authors should "rush" to .99. As I said before, I think genre plays a huge roll in price. But nobody is going to rush to lower prices unless it makes sense in terms of increased sales. I myself would be glad to charge that, but so far, it doesn't seem to make sense in terms of how it effects my sales. We'll see.

Tara Maya
The Unfinished Song: Initiate

Marcel said...

Moses - ah, I see, you have the crystal ball that has so far eluded Joe and pretty much everyone else. You know that this book is only going to make $10K, while that book is going to make $100K. Hmm. If I had that crystal ball myself, I think I would invest more in the first book, in the hope that I would improve its saleability, and less in the second... after all, I know it's going to make $100K.

(Yes, I'm taking the idea to a ridiculous extreme, but that's because I believe it deserves to be there :))

In reality, authors should do their best for each book they put out, otherwise they risk to sell 5 copies total, even on a book that was only supposed to make you a $10K profit...

Littlewillow said...

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Archangel said...

@ Robin asked about press contracts.

Sure, one is Texas A & M University

Kendall Swan said...

To me the numbers are obvious, don't take the deal. But I'm an entrepreneur and established indie.

I think being an entrepreneur is important bc it gets at the Fear thing. An entrepreneur sees the list of things needed to self publish as a todo (or get done) list. The non-entrepreneur sees it as a huge hurdle that can never be overcome (at worst) or a long list of activities that they might be able to do, but they'd rather be writing (at best). The non-entrepreneur never thinks beyond that list, never problem solves.


I'm off to a Borders Store Closing Sale. (My husband still reads paper.)

Happy Writing, Y'all!

Kendall Swan
NAKED Cheerleader and Other Stories

wannabuy said...

@Tara: Speaking for myself, I've been buying more of "cheap reads" online than used, but actually buying more new books overall."

Ditto.

I also disagree about the worse editing. Then again, I now wait until there are a few reviews. ;)

Again, how are the big publishers going to attract authors in year when the math is even more in favor of self publishing?

To others:
A tipping point is not due to one reason. It is a mixture of:
1. The new technology gaining economy of scale.
2. The old techology losing economy of scale.
3. Vendors defecting to the new technology.

I've found with all the excellent Indie books, I'm now waiting for some of my favorite authors to drop their prices below $7.

Neil

Coral Russell said...

http://bookbee.net/apple-in-app-subs-crackdown-starts-fights-%E2%80%93-with-everyone/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BookbeeAU+%28Bookbee+ebooks%29

I just don't see everyone taking it in the butt by Apple...

As for genre, true, especially if it's erotica, there isn't $.99 deals.

wannabuy said...

Oh, Indie authors had better get on the ball and 'establish themselves.' The backlists are coming!

My favorite pulp fiction is coming out in ebook form this summer! I hope in collections... It is a series of 35 novels! Well, 34 today and 35 by the time the ebooks come out.

I do not have room in my suitcase for 35 novels. But the Kindle always travels with me...
Neil

Moses Siregar III said...

Moses - ah, I see, you have the crystal ball that has so far eluded Joe and pretty much everyone else. You know that this book is only going to make $10K, while that book is going to make $100K.

We can have a good talk without talking down to each other, right? If not, I'll bow out.

It's not about a crystal ball. It's that across the board authors will make a much smaller royalty at 99 cents than they will at $2.99 and up.

My point was that IMO a dramatic, widespread move toward 99 cents wouldn't only bad for authors collectively (most of whom will make less money in a marketplace where prices are much lower across the board), but it would also bad for readers because traditional publishing will take a huge hit and even most indie authors won't be able to put as much time and energy into their works if the royalties are much smaller.

I don't think the sky is falling, btw. I just don't think a world dominated by 99 cent ebooks would be a good thing for authors or readers.

More realistically, what will probably continue to happen is more 99 cent books used as promotional vehicles. I don't see that as a problem. I have a 99 cent item, myself, and I intend to keep it there. Overall, we still have MUCH greater access as writers to readers and as readers to writers.

It will become harder for authors to succeed as the ebook world becomes flooded and it will to some degree become harder for readers to find good stuff to read, but there are real problems in the world and IMO these aren't two of them.

Moses Siregar III said...

Speaking for myself, I've been buying more of "cheap reads" online than used, but actually buying more new books overall.

That's a good point. I spend a lot more money on cheap ebooks and hardly ever buy a used paperback or hardcover anymore.

I think people will definitely read more because ebooks are convenient and cheap, but how much more? There's still only so much time in a day and even that length of time seems to be shrinking :-)

Michael said...

I think we're all just making stuff up at this point because it's all brand new. In another year or two we should be able to have a better idea of what all of these things mean.

Somewhat off topic, but I bought Moses's book The Black God's War yesterday, and while I haven't had a chance to read it yet, that's largely because my son has seized control of my Kindle and hasn't relinquished it. He says it's one of the best fantasy books he's read in a long time and he chews through fantasy novels.

Moses Siregar III said...

Well that's very cool, Michael! Thanks.

Marcel said...

We can have a good talk without talking down to each other, right? If not, I'll bow out.

I realized that after I sent it. I apologize.

across the board authors will make a much smaller royalty at 99 cents than they will at $2.99 and up.

Agreed.

My point was that IMO a dramatic, widespread move toward 99 cents wouldn't only bad for authors collectively (most of whom will make less money in a marketplace where prices are much lower across the board),

I understand, but you made it badly, IMO. I believe - it's a guess, as Michael says above, but I would say it's a reasonable guess - that less money per book would make the writers write more books, not less.

but it would also bad for readers because traditional publishing will take a huge hit

I'm afraid I'm with Joe here. Good riddance.

and even most indie authors won't be able to put as much time and energy into their works if the royalties are much smaller.

I do not believe that the tendency towards $0.99 (which will eventually become $0.00) has any significance for anything but the first book - maybe the first in a series. I routinely pay $15 for ARCs from my favorite writers that Baen publisher - a new Weber or Ringo is pretty much an automatic buy from me. I don't even find $15 to be that high. But I only bought B.V.Larson (to use someone who was a guest here) because he was at $1... and I probably wouldn't buy others from him. I would have been more upset (and inclined to leave a nasty review) if I had to pay $10 for the Swarm book.

More realistically, what will probably continue to happen is more 99 cent books used as promotional vehicles.

Yes, this is what I believe too. I think the move will be to have the first book discounted, to draw readers to a new author (or series). I honestly believe that to be good for authors, not bad. Time will tell, I guess - I'm a reader, not a writer, so I'm an outsider in the whole thing.

bowerbird said...

moses said:
> My point was that IMO
> a dramatic, widespread
> move toward 99 cents
> wouldn't only bad for
> authors collectively

you repeat this like it is an
established fact, and it's not.

there are a good many authors
who are being _helped_ by a
move to lower prices, and
_that_ is an established fact.


> wouldn't only bad for
> authors collectively

i think you left out a word.


> most of whom will
> make less money
> in a marketplace where
> prices are much lower
> across the board

again, the actual _facts_
do not support you here.


> but it would also
> bad for readers

i think you left out a word.


> but it would also
> bad for readers
> because traditional
> publishing will take
> a huge hit

so what? good riddance!

we have seen that they are
unwilling to meet the needs
of readers, so amazon and
the self-publishers have now
stepped in to fill those needs.

by their own capitalist rules,
their business deserves to die.


> even most indie authors
> won't be able to put
> as much time and energy
> into their works if the
> royalties are much smaller.

you do not have your eye
on the ball, moses... you
keep looking at the price,
and the royalty rate, when
what you really _need_ to
look at is the bottom-line.

lower prices for books mean
_more_sales_... lots more...

and the profit accumulates.

the proof is abundant...

it's really that simple. it is.

-bowerbird

Joe Konrath said...

How many books of 10 years ago still sell more than 1,000 a month?

Lots. The bestseller lists are full of backlist titles.

I've sold 1000 or more a month of several of my titles for 23 straight months. And these are selling better now than they were then.

Moses Siregar III said...

This is funny. Here's a comment a customer just left on the Amazon Kindle Facebook page:

"these 0.99 and free books make me think that a book that costs 9.99 is a little expensive! lol"

EB said...

" Piracy is killing the music industry, piracy is killing the movie business, piracy is killing computer games, piracy is killing book publishing. Doom, doooom, DOOOOOM! "

Piracy HAS killed the music industry as we know it.

Piracy is the number one concern of the movie industry.

Large gaming companies are being completely overhauled as the shift to "free to play" social and mobile games skyrocket. As I have mentioned before, books in their virtual form (ebooks) are essentially virtual goods. Book values in new digital form are completely subjective as their is no clear pricing standard. I predict a race to a range of between 99 cents and $2.99. Otherwise people will flock to BiTorrent and other sites (which is happening right now).

" And yet, new music is still being produced, despite the music cassette, despite the recordable CD, and despite the net."

Musicians will always make music. The financial model that supported many in the industry is extinct in its traditional form. "Most" musicians now make the majority of their revenue off of touring/playing live gigs. Apple's iTunes is not a savior but can provide a decent income, provided you have complete control of your label.

" New movies are still being produced, despite the VCR, despite the recordable CD, despite the recordable DVD, and despite the net."

Movies are being increasingly pirated, particularly in international markets.

" Tons of new books are being published, despite the photocopier, despite the scanner, despite libraries, and despite the net."

This was all before the ereader revolution. Once the majority of heavy book readers/buyers have migrated to reading ebooks on ereaders then the publishing houses will begin ceasing print runs for all but their most prolific titles. The production costs as they relate to returns will be so prohibitive that almost all publishing will go exclusively digital. Not tomorrow, not next year, but probably within 5-10 years.

To my point about piracy, the migration to digital puts ebooks/epublishing at risk to the potential for massive piracy similar to music. And ebooks are small files in comparison to movies and games. They are similar to digital music libraries. So what is happening is huge batches of books (in the thousands) are downloaded via BitTorrent in the equivalent time it takes to download one ripped movie.

I'm not for or against ebooks and digital publishing. And maybe I'm way off base, but what is occurring right now seems eerily similar to the early days of Napster. And it begs the question, when faced with the question of paying $1000 for 1000 ebooks vs simply downloading a batch file from pirate sites for free, what will many people do behind closed doors? I don't think you'll have more than 100 college students in America actually purchase an ebook once they know where to get a free pirated version. It is not hard to see where the market could potentially go.

Consider, anything digital is at risk for piracy.

Music was ravaged by Napster and many other pirate sites.

Films have been pirated via VCR, DVD and now downloading to massive storage drives.

Games have experienced massive piracy overseas and new forms of free gaming such as social and mobile games are drastically altering the economics of the gaming industry.

All forms of software have experienced astronomical losses from piracy.

The first thing anyone younger than twenty one does when they get their iPhone is to "crack" it so they can download free apps.

Digital distribution via the internet has completely transformed the way we do business, conduct our daily lives and consume entertainment. unfortunately digital piracy is baked in. Why would the publishing business be any different? I would argue, piracy is really part of our digital culture and lifestyle.

Stitch said...

@EB:

"Piracy HAS killed the music industry as we know it."

Yes, and remind me again, please. How is this bad for the actual musicians? It's bad for the record companies, certainly, but that's not really a problem for anyone making music, is it? That's a problem for people who own music written by someone else.

"Piracy is the number one concern of the movie industry."

And yet, Hollywood is breaking records in profits. By the way, how is piracy a bigger problem to profits than paying the cast of "Friends" a million dollars per head per episode?

"Musicians will always make music."

Exactly...

"The financial model that supported many in the industry is extinct in its traditional form. Most musicians now make the majority of their revenue off of touring/playing live gigs."

And how is this bad and/or unfair? That people are actually asked to keep working to keep earning money?

"Movies are being increasingly pirated, particularly in international markets."
"Films have been pirated via VCR, DVD and now downloading to massive storage drives."


I never said movies weren't being pirated. I said movies are still being produced, despite piracy. Ergo, the doom-mongering is false.

"This was all before the ereader revolution. Once the majority of heavy book readers/buyers have migrated to reading ebooks on ereaders then the publishing houses will begin ceasing print runs for all but their most prolific titles. The production costs as they relate to returns will be so prohibitive that almost all publishing will go exclusively digital. Not tomorrow, not next year, but probably within 5-10 years."

And again, why is this bad?

"Consider, anything digital is at risk for piracy."

I'm fully aware of this, thank you.

"Music was ravaged by Napster and many other pirate sites."

Bullcrap. Lars Ulrich got his panties in a twist. For good reason. Well, for a then apparently good reason. No-one could really blame him, back then, for being scared. I don't seem to remember hearing about Metallica going out of business and the guys living on the street because of piracy.

"Games have experienced massive piracy overseas and new forms of free gaming such as social and mobile games are drastically altering the economics of the gaming industry."

Yes, and your point being? The widespread use of refrigerators drastically altered the economics of the ice delivery business.

"All forms of software have experienced astronomical losses from piracy."

Really? I'd sure like to see some scientific reports to back that up.

"Digital distribution via the internet has completely transformed the way we do business, conduct our daily lives and consume entertainment. unfortunately digital piracy is baked in. Why would the publishing business be any different? I would argue, piracy is really part of our digital culture and lifestyle."

Of course it is. But you still haven't presented any evidence that this is a bad thing for anyone else than the executives who've been earning money on other people's work, while creating nothing themselves.

Mark Terry said...

An awful lot of "ifs" in this analysis. That doesn't mean it's wrong, but it's predicated on an awful lot of estimates and a relatively short trend-line to base estimates on, as well as a fairly small percentage of "indie" writers' experiences. That is to say, you're pretty good about bringing in support of your own experiences, but don't actually include the numbers of writers that don't come anywhere near those; in other words, you're ignoring negative indicators.

D.R. Marvello said...

Great info, as always, Joe.

One thing I'd like to point out regarding the "uncertainty" of the future of publishing: wouldn't you rather be in control of the rights to your work, given a changing environment?

If you are uncertain about where the publishing industry will be in two years, why tie up your work with a bureaucracy that is already struggling with the changes it is facing?

Don't you think YOU have a more vested interest in your work and are more able to react to a changing marketplace?

Sure, times are changing and they will continue to do so. But you can wake up tomorrow and move your book in a new direction that takes advantages of those changes. To a publisher, your title is a line on a sales report. That's all!

One last thing about the $200K advance. That's a problem very few authors have to face. As an unknown, your dilemma is more like $5,000 (or less). It's no contest! A new author would be an idiot to take publishing deal from one of the Big 6. If you are that good, you'll be much better on your own.

Sheesh. How many times do you have to say this stuff, Joe?

Merrill Heath said...

Someone asked how many books sell 1,000 per month for 10 years. I don't think that's a very realistic scenario. I don't know of many books that sell like that.

But when you do the math that's 120,000 books. More likely than not, a book that strikes a chord with the readers will sell a lot of copies...possibly even 120,000...but that will be within a few months of its release, or in the first year, not spread out over 10 years.

So the key is writing more books and building a following. Then you can sell a reasonable number of copies of each book you write to be able to make a living from your efforts, or bank some extra dough, or whatever you goals are.

I think anyone looking for a one-book-career from writing...with either ebook or traditional publishing...is facing a long-shot.

bowerbird said...

some people are still
worried about piracy?

goodness gracious...

what a quaint concern.

it almost makes me
feel a bit nostalgic for
"the good old days"...
weren't they grand?

-bowerbird

Coolkayaker1 said...

Another way to look at it, with fin calc and Time Value of Money:

200k now with very reasonable 5% interest over 5 short years is worth 255k.

200k now with very reasonable 5% interest over 10 years is worth 326k.

There is something to be said for the bird in the hand, particularly when it comes to three things:

(1) the possible reduction in Amazon author royalties within those 10 years.

(2) the power of compounding of money invested now.

(3) the slim but possible chance to become a megamillionaire, household name brand author via the traditional publishing route (not yet in e-pubbing, although Amanda Hocking may be the first breakout multimillionaire e-pubber).

Still plenty to be said for the traditional route and cash in hand.

Tara Maya said...

The cash in hand seems like a better argument for ebooks to me, because she can start selling them next week, rather than waiting nearly two years.

Sure, if she were a newbie author who still needs to count of two years to build up her following, that argument would make sense, but she already has waiting fans.

And for those advising, "Why not do both?" this is also an argument for epublishing (in THIS person's case) because she's already had the big advance from NY and ALREADY had books published the trad way.

Tara Maya
The Unfinished Song: Initiate

amsterdamassassin said...

I find a lot of focus is on making money and having security, but both are illusions. I come across writers who hope to strike it rich. It doesn't work that way, you have to love what you're doing and damn the consequences - if they outlawed writing tomorrow, would you still write in secret? If you are passionate about your work and you present yourself in the best possible way, the best way to present yourself now is indie self-publishing on e-book, keeping full control. Sure, you might be making less money immediately, but what's more important: creative control or money?

Robin Sullivan said...

Birds of a feather ... you know the rest. Most of the people who come here and especially those that post are more "independent" minded and love having more control. But the vast majority of people LIKE having others do "all that other stuff" for them. That's why most people work for soemone else then start their own companies. Just because we here see control as a value - doesn't mean that its the same for everyone - some people are willing to give up $'s to not worry about editing, formatting, cover design, marketing, etc etc etc. I'm not saying I'm one of them - I'm just saying that I can see things from their perspective -and just becuase their perspective is not mine doesn't make their's wrong.

Robin | Write2Publish | Michael J. Sullivan's Writings

Selena Blake said...

That's one thing I've been surprised by since I started my publishing journey...how much I enjoy the math side of this business. I've never enjoyed numbers before but with the help of my spreadsheet, I'm really learning to appreciate all the percents and possibilities. Thanks for another great post!

Nancy Beck said...

@Glenn McCreedy,

Zoe Winters posted on Lightning Source not long ago.

Matthew said...

I'm glad your here because numbers and I don't get along that well. That aside, this is a fantastic read. E-publishing also eliminates the querying process which I find to be one of the most stressful parts of the process. At least for unpublished authors, or more specifically: me. Waiting for someone else to approve or disapporve of my material is hard enough, but if they approve...more waiting. The idea of being in full control of my product is great. Will I reach as many readers? Who knows, but I hope so. Either way I'll be e-publishing my first novel "Exiled" later this year. Thanks for all the information, this blog has made the decision easy.

MRM
www.matthewmerrick.wordpress.com

j.A. Marlow said...

>>First, authoring a book is never just a money issue.
 
On this I agree. It isn't only a money issue, which is why a lot of newbie authors will take contracts that hamstring them for years (and now for the life of the book, and perhaps their own full career, according to some of the new contracts out there) just for the external validation, the physical book space, and hoping to find readers. I've talked to some who would give their books away and never make a dime.
 
And I shake my head in sadness that they are so internally insecure and needy and have no self-value for what they have worked so hard on.
 
>>What's it worth to walk into your local B&N and see your book sitting there in hardcover or mass market next to the biggest and brightest names in the business?
 
How many bookstores will still be open then? Although, if she's a bestseller (extended list) her books might still get into Walmart, Target, the airport and so on.
 
The thing to remember is that she still has books out there already, traditionally published (I assume) and getting her brand (name) out there. So her name is still there, still finding readers of paper books. Still getting the promotional 'push' provided by the traditional side. Her name is already out there. Why do it again if the number crunching doesn't come out favorably on her side?
 
If she has a website, all she has to do is announce the new ebook and POD book, and off the fans will go to buy or order. Meanwhile, she'll also be creating an online ebook presence that will help her in the future, all while gaining new fans if she prices her books reasonably.

To be continued...

J.A. Marlow said...

Continued...

>>What's it worth to make the NYT bestselling list? Or get a good review from PW or Kirkus (which don't review self-published books)? 
 
The NYT bestseller list is making itself irrelevant, as it is not a true bestseller list (although technically none of them are). So, that 'perk', in my mind, means nothing. Other lists DO pick up self-publishers such as the USA Today list. If they have the numbers, they go in. That's how it should be.
 
PW? Kirkus? They are quickly becoming irrelevant, too. PW has been losing money for a while and has now ventured into the pay-to-play side of publishing (pay for a useless listing, and we MIGHT review your book. Want to enter our lottery?). As a reader, the last place I would go is PW to find new books to read.
 
Kirkus has been doing the same thing for a while with their Discoveries paid reviews of self-published books, if an author wants to spend that kind of money.
 
>>What's it worth to hand over all the editing, production, distribution and accounting to someone else and not have to be bothered with it?
 
First, NO author should be handing all accounting to someone else to take care of. That's a good way for embezzlement to happen. Yes, it's even happened with publishing houses, but good luck in getting an audit done. The author needs to be involved in as much of it as possible. Besides, once the money gets to the author, they still have to do accounting: withholding, various state and federal taxes, royalty statements, household budgeting to make the advance last until the next one hopefully comes in (the last one is a really big issue if you want to keep eating after the first few months).
 
No one can just 'let someone take care of me" anymore, not in traditional publishing or in indie publishing. That's a quick trip to a short career.
 
How about simply contracting out the other steps like the big guys do on most stuff? She can spend the time once to do the research to set up her own contracted 'team' to do all of it for her. The initial time investment would be dramatically cut down with subsequent books. Even the first need not be a huge time-sink. For a flat fee. Not lifetime small royalties. Heck, Joe can fix her right up with the people he uses!
 
Yes, time is money, and she should be considering the time element. The advance won't come in one big chunk, it will be divided up. As Joe said, it will be 15-18 months before the book hits shelves. There is no way it should take 15-18 months to contract the work out, do a bit of research, and get the books up and selling on her own.
 
Oh, and with ebooks and POD there is more regular income. Good luck in finding that with traditional publishing.
 
That said, many are dipping toes into both sides: traditional and indie. It's a choice all writers need to make for themselves and their personal wants, needs, goals, and desires.
 
But the Borders bankruptcy and the ripple effect make me worry about going traditional. Changes are happening and happening fast, and it will not be fun for the writers involved with any publishing company that go down. By the way, the bankruptcy clauses in publishing contracts are worthless. The bankruptcy judge/trustee doesn't have to pay any attention to it, and can easily order the contract for that book auctioned off as an 'asset'. Problem is, you can't tell which company might have problems and fail until it happens. The authors will certainly be some of the last to know. (Kristine Kathryn Rusch and Dean Wesley Smith are doing great blog series on some of the above. Well worth reading)

Dawn said...

Oooh, numbers make my head hurt [liberal arts major speaking]. Thanks for crunching them.

I confess, the 200k up front would be tempting, but as stated, the 200k does NOT come upfront.

But I think what would convince me more NOT to take the deal isn't so much the long-term earnings [raised by Scots-irish parents with a "bird in the hand philosophy] but that what happens if the publisher goes bankrupt or gets into some other major financial brou-ha-ha. Yes, the chances of a Big 6 going belly up is probably remote, but then five years ago I wouldn't have thought Kindle would be the force that it is.
--So what if your novel gets caught inbetween a company "reorganizing."

I've put my first published (but now out of print) 2001 novel "Saint Jude" on Kindle. Sales are incredibly slow, but I've still earned more in 2011 thus far than I did for all of 2009 and 2010--- I think what I'm trying to say is the self-pub risk seems lower, even if it means turning down a large advance,and as someone posted, do 200k advances even happen these days?

Refill my Kool-Aid, I'd like another, please.
D

Anonymous said...

"Ms. Rice, the distinguished writer of vampire tales, claims authors are struggling to stay afloat because people aren't reading any more."

If I had a dime for every time I heard a successful author put out that kinda claptrap I'd be rich. Nobody reads! (except my readers, of course) Nobody publishes fiction anymore! (except my books, of course) There's like 100 writers in the whole of history who ever made any money! (and ain't it something that I'm one of them?) Just nod and smile...like you do for crazy people.

Austin L. Church said...

Wow. Unbelievably well-articulated and reassuring. I'm still on the other side, with only one “slim” eBook on Amazon under my belt. I've sold—ahem—three, and felt bad about those because the book is available for free on my website. But your article is heartening for a wet-behind-the-ears author because the allure of publishing with a “name brand” would be difficult to resist. Social media make building a readership easier than ever before, and now the monetary incentives, not to mention the creative control, clinch the deal. At the very least, I could bring this kind of data into a conversation about advances. What's the word? Leverage. Yes, that's it. Leverage.

agyw said...

As to the comment of how many books are selling ten years later, it's speculation. The model of publishing with books having a short shelf life is self-defeating. If you write well enough, plot, character, etc. If a reader likes your work, they are more likely to go looking for you. But at present, it's rare for a book to truly take off. I have a friend who's print journey took an unforseen zag. When a book would normally take eight months to come out, because of pregnancies and bumps along the way it took nearly four years. She didn't sit idly by, instead networking and blogging about not only her publication experience, but also writing and parenting. She wrote a great book that filled a niche which had precious little perspective. The biggest surprise, it became a quick bestseller, and garnered many awards, including the Newbery Honor. If not for the bumps, there would have been no slow build and perhaps her wonderful book would have been overlooked, instead of embraced, for lack of advertising/promotional dollars. With ebooks, a book can take as long as it takes and if there's more books in that authorial library, many readers will be driven to them. It's a brave new world. I simply hope the have nots won't lose on the literacy end.

Robin Sullivan said...

The 15-18 month cycle for trad books to hit the street is definitely changing. D.B. Henson's Deed to Death has gone from no agent at all (at the end of December) to a July 2011 release even though she didn't even sign with your agent until January.

Michael doesn't even have contracts yet (although Orbit (imprint of Hachette books)) made the announcement yesterday that his books will be released Nov 2011, Dec 2011, and Jan 2012.

In the "old days" three books would take years to be on the street. With fast tracking they will all be available about 8 months after contract signing.

Under such accellerated release cycles the money comes faster too. Michael will get 70% of advance on signing 80% in Nov 2011, 90% Dec 2011 and 100% in Jan 2012.

NY changes slowly but they are showing signs of being able to react much more quickly then they have in the past.

Robin | Write2Publish | Michael J. Sullivan's Writings

Glenn McCreedy said...

"Times are good, and I feel fortunte to be in the right place at the right time...but to think it will continue indefinitely...What we know is things change and someone here mentioned no one knows what the future is - I agree."

Yes, as the Internet revolution of the late 90's showed us the winners and losers with the Dot Com crash, and new winners emerged (can you say Facebook?), we will see an evolution with digital publishing that will reveal new winners who move with the times and technological development. What that will look like is unclear, although social media will likely play a huge role as a "sifter" of titles in the choice-making of the reader. Beyond that, new forms of media that include eBooks on multiple types of platforms is coming, for sure.

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Steve said...

You have made a whopper of an assumption here, that being that this $200K author only publishes one book every three years. By my experience, I'd guess that would be more like one book a year at $200K. So, following your advice would COST this author about 75% of their income. You can't walk away from 85% of the market (print) and expect to increase your income, even if you make 4-5 times as much per book. Also, no publisher marketing and publicity over time is going to cost the author new readers.

Nicki said...

Um...wow? I think I love your numbers! Keep crunching, because they mean nothing to me until someone explains them as well as you have!

the-time-capsule.com said...

Awesome information. Now I just need to get my stuff out there consistently, and maybe in the next few years I'll start actually making money.

Gerard de Marigny said...

Thanks Joe, inspiration for this new self-pubbed writer! Peace... g

Terry Kepner said...

A very interesting discussion. I have to point out, though, that royalty levels being paid through ebooks don't necessarily have to remain where they are. For example, I have a store at CafePress selling tshirts, cups, posters, etc., of artwok I have created. When I started this shop I got to set the Price and Profit level I wanted from each item. I set my levels at an average of $9.00 per item, thus a shirt with my artwork that cost CafePress $10.99 to create, package, and ship for me (that was what they charged me for the shirt) I priced and sold for $19.99. (People wanting a particular piece of artwork don't really care what it costs, they'll buy it whether its $12.99 or $19.99).

CafePress arbitrarily changed the pricing structure. Now THEY set the finished price and pay me a flat 10% (my t-shirts are still priced at $19.99 only now I get $1.99 instead of $9.00). My income dropped from $1,000 a month to $75 (I felt sorry for the ones who saw six-digit incomes get a similar drop). I no longer do anything there in adding work.

What's to prevent that from happening with Apple, Amazon, or B&N? Suddenly your "I'm making $3,000 a month at a $3.00 profit per book" could fall to $300.

Terry Kepner
www.FlyingChipmunkPublishing.com
www.tkepner.com

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