Sunday, January 19, 2014

Questions From Steve Zacharius, CEO and President of Kensington

This blog entry has been updated FOUR times with responses from Steve. If you believe you've read the whole thing, scroll down to make sure.

To sum up, a legacy author recently posted her sales figures, Lexi Revellian blogged about it, Passive Guy mentioned it, and the CEO of Kensington, in a brave and bold move, began to respond in the comments on Passive Guy's blog.

Kudos to Steve. I admire that.

At one point, Steve asked some questions of indie authors. He seemed sincere in wanting answers, so I'm happy to supply them.

Steve: I’d like to ask some questions of all of you self-published authors. For those of you that are starting out and even those that have a few books under their belt….how do you promote your book online? How do you distinguish it from the other 1,000,000 books on Amazon and other ebook retailers? Do you sell your books on all of the ebook stores or only Kindle?

Joe: I'm not starting out, Steve. I signed my first book deal in 2001, and had eight novels published by large legacy publishers.

My advances for those eight books were $265,000 combined, and they earned out and I made an additional $300,000 in royalties. Not bad, right? But over the course of 11 years it resulted in roughly $43k a year. And considering all the travelling I did (I signed at 1200 bookstores in 42 states and attended dozens of conventions, book fairs, and events) there was very little left over to live on.

In January of 2013, I was able to get my rights reverted back to me.

In the past 12 months, those titles have earned me $600,000.

Consider that carefully, as the CEO of a large publisher. Once I was no longer under contract, I was able to make over 10x what I was making with big NY publishers.


Many reasons. Better royalties, for one. Having the ability to control my prices and put my books on sale. Advertising through companies such as BookBub. Bundling titles together. Tweaking my product descriptions and keywords. Getting new covers. 

Once I was in charge, I turned midlist titles into a cash cows.

Remember that these were old backlist titles, so it wasn't my legacy fanbase buying them (they had already bought them). I wasn't selling because I had a platform from my legacy days. These sales were from people who hadn't heard of me before, and discovered me via Amazon's many paths to ebook visibility (bestseller lists, rankings, also-boughts, email campaigns.)

I'm in KDP Select on Amazon, forsaking other platforms, because I can make more money on KOLLs in a month than I made on all other etailers combined. Now, with Amazon Countdown, I can earn 70% on $0.99 ebook promotions. On a great sales day, I can make between $5 and $15k. On a normal day, I make between $1k and $2k.

I have never been on the NYT bestseller list or the USA Today Bestseller list, yet I have sold over 1 million self-pubbed ebooks. 

How many #1 Kindle Bestsellers has Kensington had? I've had three, and dozens more in the Top 100. And I don't have the experience, reach, deep pockets, and 90 employees that Kensington has.

I'm not the only one doing this. There were over 150 self-pubbed authors who sold more than 100,000 ebooks on Amazon in 2013. 

How many Kensington titles have sold 100,000 ebooks in 2012?

The magic word here is ebooks.

You mentioned Kensington is the "last large independent publishing company in this country that is still in the mass market business."

Hmm, could that last part be the reason? You consider yourself first and foremost a mass market publisher?

Did you know Kodak invented the digital camera? They didn't pursue it because they had a lock on film sales, and didn't want to change their business plan. 

It didn't turn out well for them.

But for Kensington, you really don't have a choice. Mass market is your market. That's something you can do that I can't--get paper books into brick and mortar stores.

For the entire history of Kensington, up until very recently, that meant you were in a position of power. Authors needed you.

But now we don't. 

I made a million dollars in 2013, and my books weren't in any brick and mortar stores. Why would I need Kensington? Why would any author?

And what does my ability to do this say about the future of books (both ebooks and paper books)? And of publishers such as Kensington?

Steve: Now maybe you can answer this question without jumping down my throat….if indie publishing is as good as you’re all making it sound…..why do you think that the biggest and most successful authors in publishing don’t go this route? Why isn’t Nora Roberts, Patterson, Lee Child, etc….going this route? Do you think it’s just the large advances they get? And even if you go down a notch from the megastars….those that are getting above a $50,000 advance for example….why do they stay with publishing houses?

Joe: Do people in happy marriages have affairs? Or do they stick with their spouse?

If I had been making great money with my publishers, I would have stayed with them. What impetus would there have been to leave? And if I'd been given sweeteners like escalators, cover approval, expensive promotional campaigns, widespread print distribution, and large launches at BEA with massive media attention, I'd be defending legacy publishers right now instead of being on the other side of the fence.

But very few authors get that kind of treatment. The vast majority don't. In fact, a lot of them sign unconscionable contracts, are treated poorly, and make very little money (as referenced by the deleted blog post that started this line of inquiry.)

In the past, authors needed advances to live on, and if they were fortunate enough to earn out their advance and get royalties, they were paid twice a year.

It isn't easy to budget for your family when paid semiannually. And why does it have to be that way? It's kind of silly because in PG's thread you said: "Royalty programs are extremely sophisticated and the data is pulled in from sales systems from the biggest magnitude…generally SAP." 

If that's the case, why not pay more often? How about quarterly? Bi-monthly?

Amazon pays monthly. I can track my sales in real time, not 18 months after the sale when reserves against returns are finally counted on a statement. 

But we both know that a book can be profitable for a publisher even if the author hasn't earned out their advance. Which is why a publisher can offer Lisa Jackson big advances and not be too concerned if the book earns out.

BTW, you have heard of, right? Rowling won't be the first to exploit her own ebooks rights. Other name authors will follow.

Here's how it will happen:

1. Huge names will look at their royalty statements and see the eventual transition from paper to ebook sales. They may not be seeing them now, but when B&N closes, and as ereaders continue to become widely adopted, they will. Because once B&N is gone, it will cause more people to adopt ereaders because they can't get books otherwise, which will mean airports, drug stores, and department stores won't stock mass market because no one is buying them. 

2. Huge names will then demand better ebook royalty rates since ebooks are their new main income source. But with the income from paper diminishing, publishers won't be able to justify huge advances and 70% ebook royalties.

3. So huge names will self-publish, banking on their brand to bring in 70% royalties. 

I'm skipping steps, and it may take a few years, but this is how it all ends. 

How is Kensington preparing for it?

Kensington has one invaluable thing to offer authors: paper distribution.

The rest of what Kensington offers is service-based: editing, cover art, formatting, proofing, marketing, advertising. But all of those are services authors can get without Kensington. And all of those are sunk costs for authors--they pay once, rather than pay forever.

Does it make sense for any author to give up the majority of their ebook royalties to Kensington, forever, in exchange for editing and cover art? Why would any informed author do that?

Right now Kensington can get an author's paper books into thousands of retail outlets. That's worth something.

At least, it's worth something to some authors. Other authors, like me, don't care, because we're doing fine without being in B&N or Walmart or Costco.

Blogs like mine are helping whole generations of authors decide they don't even want to bother submitting to Kensington because they see no advantage to it. There are tens of millions of ebooks being sold entirely outside of the publishing industry. That number will continue to rise.

Is your long-term business plan centered around hoping for writers to remain naive?

Steve: Lastly what do you all think about the power that Amazon has gotten in the marketplace? They currently sell books, both print and e, below cost quite often and are willing to take the loss to build marketshare; predatory pricing. 

Joe: AKA "being competitive."

Well, they did invent the ereader and ap everyone wants to read ebooks on, at huge cost and risk. And last I heard, the DOJ doesn't consider Amazon predatory. But if Kensington does, can't you fight Amazon's unfair practices by removing your titles from their store?

I know that would be risky and scary. When I didn't like my publishers' practices, I got my rights back, which was also risky and scary. But sometimes, when you believe in something, you take that risk.

Or do you see the end like I do? That ebooks will become the dominant choice for readers? If so, I'd worry less about Amazon being predatory and more about how to exploit the potential they're offering.

Steve: They can afford to do this because of the size of their bank accounts. What happens when the other companies go out of business because they can’t afford to match these ridiculous prices? 

Joe: I'm matching Amazon's ridiculous prices without difficulty. In fact, last I checked, I'm getting pretty wealthy.

As for other companies going out of business, I fail to see how that effects me. The system needs two groups to endure: readers and writers. Companies like publishers and bookstores once facilitated this relationship, and took a share of the profit. Now Amazon is doing that. One day it will be someone else in some other way.

My job isn't threatened.

Steve: Do you think they will suddenly change their terms? Are they suddenly going to change your royalty rate to 50% from 70% when there’s no other competition?

Joe: What are Kensington's ebook royalty rates? Are you 70%? Are you 50%? 

Are you suggesting that Amazon may lower their rates to something like (gasp!) what Kensington offers authors?

Should authors be concerned about what Amazon might do, or what Kensington is currently doing?

Can you point to ANY situation where a company or companies who had a commanding share of a media market raised prices? DVDs and Blu-Rays have either remained stagnant or gone down in price. So have music downloads. Cable TV and streaming video have gotten cheaper.

Wait, come to think of it, there were some instances in the past where industries dictated price. The music industry forced listeners to buy $16.99 CDs in 1986 to get just the one song they liked.

Sort of like the publishing industry currently charges $30 for hardcovers.

We know what happened with music. The industry fought change, lost its power, and now a computer company is the number one music retailer in the world, selling cheap digital downloads.

Steve: Do you see any new companies being able to come in and compete with the existing players in ebooks now? Will Apple continue to grow…what about Google…probably the one company that can afford to absorb losses even more than Amazon if they wanted to? Android is an enormous platform; why aren’t they pushing books harder?

Joe: Why is the future of the industry, and of Kensington, based on what others are doing? 

No one wins by playing catch up. No one wins by letting others call the shots.

When ebooks overtake paper in sales--and they will--what is Kensington's plan? Because it seems that your current plan is to continue to invest in a dying paper market, continue to treat authors as replaceable cogs, continue to whistle past the graveyard, continue to do business with the devil who will destroy you (Amazon), and take zero advantage of a backlist that could be making you tens of millions of dollars if you only paid a little bit of attention to authors like me and what we're doing.

I'm going to fisk a few more points you made during the discussion on Passive Guy's blog. I'll try my best to put them in context, because I hate it when I'm incorrectly quoted.

Steve: A contract is a private business transaction between the writer and the publisher and I don’t see why it needs to be shared. 

Joe: Steve, I'm the one to blame for the trend of sharing numbers and terms. I began doing so publicly in 2009, when I first self-published on the Kindle.

That was the first of many posts, and eventually I disclosed my advances and royalties from my legacy publishers and compared them to my self-pub numbers.

I did it to show authors what was possible. I also did it because authors never had the power that came with transparency. We didn't know what each other made, because we didn't discuss it. Any mechanical engineer or podiatrist knows what they can expect, salary-wise. Writers never did. Could be $5k a year. Could be $50m. 

So I showed other writers what a midlist writer earned, and other writers watched as my self-pubbed numbers began to catch up with, and surpass, what I made in the legacy system.

As a result, many authors treat transparency as the norm now. And because of that, we all have a much better idea of how we're all doing.

Steve: A legitimate publishing company works with the writer to improve the story.

Joe: I had an experience that disagrees with that statement. In a nutshell, my publisher, Hachette, rejected the second book in a two book contract, and when I wrote another one for them they wanted significant changes.

I self-pubbed those two books. They've earned me more than $300,000, and have gotten over 1000 Amazon reviews averaging 4 stars. 

My publisher didn't work with me to improve those stories. They worked against me, and I had to buy my way out of the contract, and I wound up making a lot more on my own than I did with them.

Steve: I don’t know of any publishing company CEO from a respectable firm that doesn’t think its editors are its most valuable resource. They are the ones who bring in the new authors and discover them and have a good part of relationship with the author.

Joe: Actually, your most valuable resource is your ability to get paper books onto shelves.

Editors are very important, but they can be hired directly by authors. For one-time costs.

Can Amazon KDP be considered a publisher? They don't buy rights, but they do call themselves Kindle Direct Publishing. 

If so, it is possible to publish without any editor bringing in new authors, having relationships with them, or even doing any editing.

Steve: We have artists that have been paid over $6000 for one time use of their art. I doubt there is one single self-published book where an author has spent anywhere near that amount.

Joe: Yikes.

In fairness, it was in response to the comment: "Better proofreaders can be found than those employed by the Big 6, and definitely better cover artists."

Now, we've all seen some terrible self-pubbed covers. But we've also seen some terrible legacy-pubbed covers. On average, I feel confident in saying that legacy covers are better than self-pubbed covers. But I've seen some knock-out self-pub covers, and I'm pretty sure they didn't cost $6000. I believe, for $6k, I can hire a necromancer to bring Picasso back from the dead and hire him to do a cover, with money left over for a lobster dinner.

So I have to call you out on this, Steve, because what you thought was an honest defense of Kensington's attention to quality came out more like a careless boast about how much money your company wastes on cover art. I'd love to see the $6k cover mentioned and compare it to some self-pubbed covers. It might, indeed, be worth it. But in a day and age where the average author advance is still $5k, is paying $6k for cover art really a wise business move? Especially when we all know that Kensington has offered author advances for much less than $6k?

Steve: If the publisher commits to the books they are required to pay for them even if the first book does poorly. That’s the risk the publisher takes.

Joe: I agree that the publisher takes the risks, and publishers do honor contracts even if the book doesn't succeed (this was in response to a commenter suggesting that "if the publisher wasn’t happy with sales of book 1 they could have cancelled 2 and 3")

But all publishing contracts have clauses that state a publisher can reject book 2 or 3 if they feel it isn't publishable. And, indeed, I know authors who have been dropped from contracts for this reason--a reason that is entirely arbitrary.

And who gets the blame if the book doesn't do well? The author.

The publisher can get out of a contract if it wants to. It won't cite "poor sales of book 1" but it can say "book 2 is unacceptable." Which is especially awful when the poor sales of book 1 were the publisher's fault.

I'm not going to get into detail about all the ways a publisher can hurt a book's sales, but it happens. And a bad sales record haunts an author forever, making changing publishers difficult if not impossible.

Steve: Did you see the recent posts from Writer’s Digest that 80% of self-published authors make less than $1000. That’s from a survey of 9500 writers.

Joe: And that's $1000 more than they would have made if they never were accepted by a legacy publisher.

BTW, why wasn't I surveyed? If I and a few choice friends were asked, we could have really bumped up that average.

The fact is, a lot of self-pubbed authors won't make much money, just like a lot of legacy pubbed authors won't make much money. But everyone has a chance to self-pub. Legacy publishing is an invite-only club. So, if given the chance to make some money over no money, I think most would choose some money.

And I have no idea how skewed the survey was. WD is infamous for advertising lots of predators; companies who charge authors fees for publishing assistance and reviews. A self-pub author who subscribes to Writer's Digest may believe they only way to self-pub is to use Authorhouse or Xlibris. That would put them far behind an author who reads my blog and understands how to self-pub on Kindle for free. If a lot of vanity press authors answered the survey, it's no wonder they're making so little.

Also, how much does the average legacy pubbed author make? Isn't that an important number, too? If we remove the Top 10 highest paid Kensington authors, what is the average advance of the remainder?

Finally, I don't understand the phrase "make less than $1000". Is this annual? Because ebooks are forever, and should theoretically earn forever, so there won't be a cap on how much a book earns.

Steve: With our digital first lines, eKensington and Lyrical Press now, we publish many first time authors as well as others, who do not earn huge royalties. It’s a building area for us….like a farm team. If the numbers get bigger and the authors have good reviews we’re going to try to eventually get them into print. We’ve had many authors published only in e who have gone on to get big publishing contracts from other publishing houses as well.

Joe: Okay, so this seems to be part of your plan for the future. I missed it on the first read-through.

I'm fine with the concept of this, but I'd have to review a contract to see if it's something I'd agree with. I have no problem with farm teams, and you also mentioned paying quarterly, which is a step in the right direction.

Years ago I made up a term called estribution. Essentially, someone would take on all of the jobs of a ebook publisher--editor, cover art, formatting, proofing, accounting, etc--for a royalty percentage (10%-15%). But the rights remain with the author.

I fully understand authors not wanting to self-pub all on their own. And I can understand them willingly giving up royalties to have these things done for them.

But at what cost? 

Amazon KDP offers 70% royalties. No publisher can offer more (because Amazon has to take their cut). So eKensington and Lyrical are obviously offering less than an author could get by self-publishing. If it's a small percentage, that might be worth it to the author--depending on the contract.

Giving up your rights for something you can do yourself (or pay someone a flat fee or a royalty percentage to do for you) makes no sense... until you bring up the farm team analogy.

It's a seductive concept. Play for us, and maybe you'll play in the big show.

I can see how that would temp authors. Sign with a known publisher, let them do all the heavy lifting, and maybe get a shot at seeing your book on the rack at Walgreens.

But farm teams aren't secretive. Scouts know all the names and stats. Everyone is aware of the top prospects. It's all out there in the public eye.

So, Steve, who are some eKensington and Lyrical authors who have gotten into print, or gone on to other publishing houses?

And anyone reading this who is an eKensington or Lyrical author, what are the contract terms (since Steve hasn't mentioned them and apparently seemed reluctant to do so in PG's thread)? You can post them in my comments, anonymously, or email me. I won't mention your name. I did read one author on PG's blog who got a $2500 advance from Kensington. 

I made that much last Saturday.

Of course, all writers have different paths to follow, and I've never said that my success is probable, or even possible, for anyone else. But I do encourage everyone to get informed before you sign away rights to a novel for the price of a flatscreen television. Learn about contracts, and royalties. Research all options.

Steve: What I said was that in MY perfect world that self-published books would be separated from books that were done by traditional publishing on websites so that the reader can make an informed choice as to what they’d like to buy.

Joe: I'm going to let my friend, bestselling author Barry Eisler handle this one, since we discussed it in length and I appreciated his response.

Barry: What I find most noteworthy (and amazing) about Zacharius’s notion that self-published books should be forced to wear some sort of weird scarlet letter is how anti-democratic and paternalistic it is. The philosophy behind it is that readers need to be protected from reading what they like — protected, presumably, by people like Zacharius, who know better than readers themselves what’s good for them.

Beyond its perniciousness, Zacharius’s notion is good for not much more than a chuckle. Because if there really were something “bad” about self-published books (actually, I love Guy Kawasaki’s nomenclature — “artisanally published”) from which readers needed to be protected, wouldn’t readers be able to tell the difference without divine guidance from Zacharius? I remember when I was first living in Japan, and the Japanese government was trying to justify similar protectionist measures and rhetoric to justify tariffs on California rice because consumers needed to be warned that “California rice is inferior to Japanese rice.” In fact, California rice is identical to Japanese rice, and it was precisely this sameness that the Japanese government was trying to protect against. If California rice really were inferior, consumers would have preferred and been willing to pay more for the Japanese variety, and no “protection” would have been necessary. After all, I’ve never heard of a government attempting to impose tariffs on foreign cow flops. The tariffs, and the accompanying rhetoric, are always about something consumers demonstrably want.

For similar such bullshit in still other contexts, see also the history of the dairy lobby’s war against margarine, the evils from which consumers also needed to be protected. Plus ca change and all that.

It’s fascinating how the same old self-interested bullshit just keeps popping up again and again in new venues. The manifestations vary, but the fundamental excrescence is always the same. There are, and I guess always will be, people in the world who don’t trust other people to know what’s best for themselves, and who can’t control the urge to try to decide for them. When I read proposals like Zacharius’s, the novelist part of me always wonders to what degree he senses how neatly his position dovetails with that of protectionists throughout history, and to what degree he’s blissfully ignorant of history and un-self-aware. Ultimately, wondering what’s really going on in the mind of someone like Zacharius is not much more than an amusing parlor game. Far more important is knowing that when someone pops up and says, “I’m from big publishing and I’m here to help!”, it’s a good idea to wonder who the “help" is really for.

Joe: I'd also ask, Steve, if you think debut novelists should be separated from seasoned pros? Maybe debuts could come with a mark on it that says "UNPROVEN AND UNKNOWN AUTHOR". And with pros, perhaps a disclaimer of "THIS BOOK SOLD HALF THE COPIES THE LAST ONE DID" in big letters on the front would be helpful to consumers.

Or we could have some sort of ranking system based on sales, maybe lists that show which ebooks are selling the most, and perhaps some way for readers to rate what they like and don't like.

Nah. Let's segregate. That's best.

Steve: I think the bigger and more successful an author gets, the more likely it is that they are going to want to be with a traditional publisher. I think the facts show that.

Joe: Though some of my blog readers might not believe it, I'd certainly entertain an offer from Kensington for my print-only rights. I've personally advised several successful self-pubbed authors who have gone on to sell print-only.

As far as the facts, I've seen several newbie authors get some self-pub success then sign with legacy publishers, but I haven't seen any former legacy author who has gone all-in with self-publishing go back to legacy. 

That's saying something, isn't it? No one re-enlists.

Steve: If you look at the printed NYT list, how many of the mega authors are self-published? 

Joe: How the NYT list works notwithstanding (hint: it isn't by actual sales figures), I'll ask how many legacy authors manage to get on it? Kensington publishes 450 books per year. How many crack the NYT top 20? How many books are legacy pubbed every year? A few hundred thousand? And how many make the bestseller lists? How many authors make the lists who have never been on them before?

I've sold tens of thousands of copies of a title in a week. But I'm invisible to the NYT and USA Today lists.

If your dream as a writer is to become Nora Roberts or Lee Child, I don't think it matters much which route you follow--you're deluding yourself. What you should do is set realistic, attainable goals, and work toward them while learning as much as you can.

Steve: It’s very hard to become a major author by self-publishing…sure you can make money and some of you obviously make a good living. But you’re leaving out 70% of the market by not being in print and POD just doesn’t cut it….it’s not the same thing as being in WalMart or Target or B&N. 

Joe: I agree that POD isn't the same as being in WalMart.

I do not agree that I'm leaving out 70% of the market. Perhaps that is what your company believes the market is, based on your sales figures, but it doesn't take into account the ebook sales you're missing by not positioning them correctly, and it isn't the market I'm catering to.

I wrote a book called The List which has sold 150,000 ebooks. If you believe that's only 30% of its possible sales, that means I should be able to move 500,000 paperbacks. Call my agent, and we'll sell you the mass market rights for cheap. Her name is Jane Dystel. Since 70% of the market is still untapped, you should be able to do well.

I also have half a dozen ebooks that have sold over 50,000 copies each. I'd be happy to let Kensington take the paper rights from me. As long as I earn more than the $1300 a month I currently make via POD, I'll entertain any offer.

I'm all about authors having choice, and making decisions based on logic, common sense, and facts. Self-publishing isn't an ideology for me. It's simply a means to reach readers.

If Kensington believes it can reach readers that I can't reach, I'll sign with you to reach those print readers.

Have you done print-only deals, Steve? If so, with whom? If not, why not? If you really believe there is money to be made in print, I'd be the perfect guinea pig.

I'll wait patiently by my phone until you call with an offer.

Steve: It’s not the same thing as being able to sell your books in different languages around the world or to sell the rights to large print or the book clubs. 

Joe: My agent has sold rights to my self-pubbed books in over a dozen countries. That doesn't require a legacy publisher.

Large print? Wasn't that a format that used to exist before you could adjust the font on your Kindle? ;)

One of my previous publishers sold book club rights to one of my titles. I still remember that bottle of scotch I bought with the royalty check. Ah, MacCallan. 12 years is far too young...

Steve: Self-publishing is primarily an ebook format and right now, that’s still only 30% of the marketplace and the growth has leveled off for the time being. And yes I am using AAP figures since that’s what’s available. 

Joe: Again, the AAP didn't poll me. Or any self-pubbed author. Or Amazon. 

Perhaps Kensington's growth has leveled off. Mine has not. 

Steve: I’ve been willing and have been having open dialog about self-publishing in my blog and I respond to all emails, probably more than any other CEO in publishing.

Joe: I'll email you a link to this blog and look forward to your response.

Happy new year. And good for you for engaging your critics. If you're smart and determined to take your company into the future successfully, you should be welcoming the opportunities presented to you, and closely monitoring those who are succeeding in this brave, new frontier. It's all about listening and learning and experimenting, not defending and reminiscing.

Failing that, you should sell your backlist to another publisher and get out while you still can.


Joe sez: Steve replied. And I replied to his reply. The ball is back in his court.

Steve: Good to make your acquaintance Joe and thank you for answering some of my questions.  I think there's way too many questions for me to reply to in a format like this but I'll try to reply to some of them.

Joe: Good on you for responding, Steve, and pleased to make your acquaintance as well.

Thanks for your time. I understand I asked a lot of questions, and at the end of this I'll repeat the ones you missed. I'll put them all in a row to make them easier to answer.

Steve: First of all I never saw the original post that started this entire conversation.  I wasn't able to see Lexi Revellian's post….somehow I got caught up in this conversation later on and was just willing to give my opinion about the market today.

On my blog I had talked about self-punishing and I guess that's how I ended up here somehow.  I think the overwhelming point of my blog has been missed.  My blog said the media hypes the huge success of authors like you and Hugh.  But my point was for every one of you, there are probably ten thousand that have sold only 100 copies.  That was it….that was the entire point of my blog and somehow the conversation got bigger than that.  But at least you're willing to have an open dialog and I appreciate it. 

Joe: Not sure if you meant self-publishing or self-punishing, but if that's a Freudian slip it's a funny one. ;)

I understand that the media talks about authors like me and Hugh, but that's because industries have celebrities, and success is measured in unit sales and dollars. Though I don't have access to the actual data, I can agree that for every Hugh Howey there are probably ten thousand who have sold only 100 copies.

But for every Lee Child there are probably a hundred thousand who were completely rejected by publishers like Kensington. And you're the one who brought up Lee and Nora and Jim. How is hyping their successes any different than hyping me or Hugh?

The point, as I see it, is that huge success is difficult, no matter which route you take.

But what does that have to do with why authors should sign with Kensington?

Keep that question in mind, because I'm going to repeat it several times, and my blog readers and I will want an answer.

Steve: Some of the replies on the other site were just nasty and there were a lot of misrepresentation of information which I tried to correct.  I've also had many emails from current Kensington authors and some former authors, and a few of them have replied on The Passive Guy blog. 

Joe: I'll try to head off any nastiness here. Commenters are only allowed to insult me on my blog. If they start insulting guest posters, or each other, I kick them out.

I have no doubt you're sure Kensington is a great company, with honorable employees, and you all try your best. I believe you.

But I know Kensington authors who are unhappy. I know this from emails and from this blog and from the years I went to dozens of conferences and bellied up to the bar, talking shop.

I'd rate Kensington's value to authors at 4 out of 10. That's the same as the Big 5, but not as unfavorable as Harlequin (they're a 1 out of 10). 

Amazon Publishing is 7 out of 10. They were once an 8, but their contracts are becoming more legacy-like. Still, their terms and royalties are much better than industry standards.

Amazon KDP is 9 out of 10. The two things that prevent a perfect 10 are exclusivity with KDP Select and their refusal to publish in Epub format. I've been trying to get them to change for years, and cited many reasons they should. So far, no luck. But I keep trying.

As a 4 out of 10, Kensington is not only competing with the Big 5 and Harlequin for authors' attention, along with many smaller publishers, but you're also now competing Amazon. Authors no longer need agents. Some agents are assisting authors in self-publishing (like mine). They realize (rightly so) that they can earn 15% dealing with a publish like Kensington, or dealing with KDP. Either way, the author gets their book in front of readers, and someone else does all the heavy lifting (the aforementioned estributor).

Steve: Kensington is in this for the long haul.  We've been in business for 40 years and hopefully we'll be around 40 more.  My point in stating that we were the last remaining privately owned mass market publisher wasn't to infer that we're not players in the ebook market, because we are….a big player.  We are a top Kindle vendor which is pretty amazing for a company our size and by top; I'm estimating top 10…although of course Kindle would never disclose this information since they're so secretive about everything.

Joe: As opposed to Kensington being secretive about everything, such as contract terms, royalties, advances, and average author earnings?

You're more than welcome to share numbers here. People do it all the time. :)

Steve: My main point again is that obviously self-publishing has been a huge success for you, but that is not necessarily the case for all the other people who have self-published.  Unfortunately the people who are blogging on the site that I was on are probably the more successful self-published authors, although there were some that said they were just getting started.  You're really not going to hear much from the people who don't sell many copies.

Joe: You don't normally hear from legacy pubbed authors who don't sell a lot, either. Not many people trumpet failure. They tend to keep that private, like herpes.

Also, I don't find it unfortunate that the people on PG's blog are among the more successful self-pubbed authors. I find it refreshing. But I can see how could view them as a bit of a hostile audience. 

The thing is, a lot of authors have been badly hurt by the industry you're a part of. Their anger is justified, and it isn't every day that a big publishing exec drops in.

We both understand that some writers are huge success, and some do poorly. Let's move away from that point, because it isn't helpful. The majority of authors wind up somewhere in between billionaire and $50 a year.

Those are the ones looking to publish. Those are the ones who will chose between the traditional route and self-publishing.

And those authors have instant access to information about both legacy publishing and self-publishing. When they Google "self-publishing" they find me and Hugh, talking about how legacy publishers don't measure up, among many other pro-indie blogs..

Steve: Kensington too has many ebooks that only sell under 1000 copies.  And if we have that happening, it's happening with tens of thousands of self-published authors as well.

Joe: If you have ebooks selling under 1000 copies, be a stand-up guy and revert the rights back to the author.

Of course, if they're selling well in paper, you shouldn't do that. That's Kensington's big advantage over Amazon; paper sales.

But do you think your paper sales are enough to lure authors away from Amazon KDP?

On Passive Guy's blog you mentioned Kensington has $100,000,000 in sales, and annually sells 450 titles.

As a thought experiment, let's pretend those are all mass market paper sales.

That means the average theoretical Kensington author (at 8% royalties—are you 8% or 6%?) will sell 25,000 mass market copies and earn roughly $18k (450 titles at $8.99 each paperback).

These are very loose numbers, because they don't take ebooks into account, or backlist sales into account. I'm simply and roughly calculating that 8% of $100m in sales of 450 individual titles works out to $18k earned by the author per book.

$18k is hardly a living wage. And because Kensington has a standard non-compete clause (you said in PG's thread: "Generally we do not want our authors writing in the same exact genre as we are publishing on their own or with another publishing house. We want to control how the books are released to the readers.") it means they likely won't release more than one book per year.

So not only is the money mediocre, but Kensington is preventing the author from earning more by publishing more.

You also mentioned Kensington has 90 employees.

Steve, how many of your full time employees earn more than annually than the average Kensington author?

I'd guess a lot. And if I'm right, I see a big problem. Because Kensington needs authors, but authors don't need Kensington.

Don't you think authors will negatively view Kensington taking the majority of the profit for books they wrote? Authors don't care about your overhead. They aren't considering your salaries or benefits or rent or utilities or all the costs to bring a book to market.

They only know their writing grossed $100m annually, and they only earned $8m. If they sold $100m worth of ebooks, they could have earned between $35m and $70m.

How long do you really think that business model can sustain itself?

Steve: You asked about bestsellers.  I think the Top Kindle list is really not the way lists should be prepared.  As I've said numerous times, the lists should be based on revenue, not unit sales because there is an enormous difference when people are selling books at $.99 versus a publishing house selling them for $9.99 or more.  (I'm not saying you did this by the way, I have no idea)….but most of the books that climb the Kindle list from self-published authors are very low priced. 

Joe: Steve, you're the CEO and President of the largest mass market publisher in the USA. If you see that ebooks are selling at lower prices, shouldn't you lower your prices?

Unless you're worried that ebook sales will cannibalize your paper sales, which you don't want to happen because Kensington's greatest asset and advantage over Amazon is their ability to sell paper books.

In that case, I probably shouldn't be waiting by the phone for you to call about acquiring print-only rights to my thriller The List, huh? Because I sold 150,000 ebooks, you might be thinking there won't be anyone who wants it in paper.

Hmm. I guess I'll have to be content with only catering to 30% of the market.

Wait… that no longer makes sense, does it?

Steve: We've acquired many books that were previously self-published and when we do, the author always talks about their Kindle ranking.  We always have to ask what was the price point?  How long was it for sale at $ .99 and how long at a higher price.

Joe: So you're acquiring self-pubbed titles that sold well at a certain price point, and then you raise that price point?

Steve, what sense does that make? Shouldn't you be responding to what the market is telling you it wants?

Steve: I'm jumping all over the place here because it's hard for me to look at the blog you posted and I'm doing most of this from glancing back and forth at your blog…so I'm sorry. 

You mentioned there are over 150 authors who sold more than 100,000 ebooks.  This is an amazing achievement, but once again were they at $.99 or $9.99?  I can do the math and I understand that you get 70% of the revenue so you come out further ahead even by selling the books at a low price…but my point is that the top 100 list is very misleading because it's counting units and not dollars sold.  No one banks units.  They bank dollars.

Joe: Authors don't care how much their publisher banks. They care about how much they bank.

If a Kensington author is ranked #52,345 in Police Procedural, priced at $6.99, and sees I'm ranked at #30 priced at $3.99, what is the first thing that is going to pop into their head? Could it be: "Why the hell is my publisher charging so much?"

Let's go back to those 150 authors who sold over 100,000 copies on KDP.

At $0.99 per copy, they banked $35k.

At $3.99 a copy, they banked $270k.

How do those numbers compare to the average Kensington author?

But those were just the 150 biggies. Amazon didn't mention those who only sold 90k ebooks. Or 80k. Or 70k…

At $3.99 a copy, 40k units sold earn an author $108k per year.

At $2.99 a copy, 10k units sold earns an author $21k a year—still more than the fast and dirty $18k Kensington average I calculated.

A self-pubbed author only needs to sell ten thousand ebooks—only 834 copies a month—at three bucks a pop to make more than one of your average authors.

Doesn't that scare you? It should. That's just 1.14 ebooks per hour sold.

Steve: Yes, we are a mass market publisher but we also do trade and hardcover as well and it's tradepaper that is the fastest growing segment of the business in print…not mass.  Ebook accounts for 30% of our sales, which is typical for most larger publishers. 

Joe: Where are you getting your data, Steve? From your own company?

I'd guess that different publishers and genres have different print/ebook ratios than 70/30. And to confirm my suspicion I talked to an industry insider.

She mentioned a bestselling author who sells 95% ebook, only 5% print. Others are 50/50. She mentioned a few mass market bestsellers where print outsold ebooks, but that seemed like the exception, not the rule.

Kensington may indeed be 70/30. But I wouldn't expect it to stay that way if I were you.

Steve: Although you made a million dollars, we have authors and other large publishers have authors, that are making more than that in advances alone.  That is not to disparage your accomplishments because they are amazing.  But there are many big authors who make a lot more than that.  I'm sure you saw the NYT article the other day about the deal that Sylvia Day signed for two books for an eight figure advance. 

Joe: How does that matter unless you're offering authors (or me) an eight figure advance?

Very few writers are going to get rich, let alone filthy rich. Many won't make peanuts. Somewhere in between are the rest of us.

Why should we sign with Kensington?

If you really expect to be in business another 40 years, you need to answer that question.

Steve: In terms of your questions about royalties, I mentioned that on our digital lines we pay royalties quarterly.  The reason we don't do it more often is because it's very time consuming.  Remember we're not doing one author, we're doing hundreds of them.  We're not dealing with one vendor, Kindle…..we're importing data probably in 15 different formats from 15 different ebook retailers.  It takes time to import the data, verify it and report it.  We don't do printed royalties more often because there are well over 1500 books that we're probably paying royalties on in any given royalty period.  Every one of those royalty statements has to be verified and because printed books are returnable, we have to look at the reserve for returns on each and every title to make sure we're paying the author the correct amount.

Joe: Steve, Amazon has tens of thousands of authors on KDP. And they pay monthly.

You expect sympathy from authors because you're a publisher? Paying royalties is one of the things that publishers are required to do. For authors, it may be the single most important thing.

Amazon understands that.

Steve: Your statement that you're matching Amazon's low prices without any harm isn't really an appropriate comparison in my opinion to them selling big author's books at a huge loss to them.  When you lower the price, you're not losing money on each sale.  You're only making less.  When Amazon actually cuts the price below their cost, they are losing large amounts of money on each sale and the other companies like B&N, OverDrive, Kobo, don't have the bank roll that Amazon has from its shareholders to absorb this loss. 

Joe: What exactly are you complaining about?

I'd kill to sell ebooks to Amazon for $12 , which they sell to readers for $5 while paying me the full $12. That sounds like a recipe for printing money. I'd be whistling zipideedoodaa all day long.

You do realize that is your complaint, right? The Marx Brothers used to do that. For fun, they would go out into the street and sell $5 bills for $1. Invariably, a policeman would come by and try to figure out how to arrest them, because he was sure it was a scam, even though they were losing $4 each transaction. There had to be a trick. Why else would they do it?

Steve: This is why I'm saying it's predatory pricing.  They are purely trying to drive the competition out of business and capture market share.  Once again, it's totally different than you just lowering your price and making less money on that sale.  Amazon is not losing money on your lower priced sale.

Joe: Actually, it's called competing. And capitalism allows companies to compete. That's kinda the point of capitalism.

That's why the Agency Model sucked. I was ahead of everyone on that, including the DOJ. But they caught up eventually.

My point: consumers benefit from lower prices, and authors and publishers are still paid on the wholesale price—which publishers set.

Wholesalers shouldn't be allowed to set retail prices. No business does this.

Well, except for books and magazines, which have the price printed on them.  Can you name five other products with prices printed on them?  Can you name one?

What's the reason for this, do you think?

As for predatory pricing, you may have a point. Once digital music downloads became the rage, iTunes lured more people to their platform by selling individual songs for $0.99 to $1.29 and entire albums for $9.99, and paying artists 70% royalties. But once Apple gained a huge market share and began to dominate the industry, they raised prices to $5 a song and slashed royalties to 25%.

Oh… wait. The royalties and prices haven't changed.


Steve: BTW, I give Amazon tremendous credit for what they’ve accomplished.  It’s an amazing success story and I’m a huge buyer from Amazon.  I buy books from many online retailers as well.  I own Kindles, iPads, Nooks but frankly, I still prefer to hold a book in my hands.  I don’t think it’s an age thing with me, it might be because my background is in printing.  I’m much more a techie than most people.

Joe: Steve, isn't it a teensy weensy bit hypocritical to have Kensington's entire catalog available on Amazon, and to be a "huge" Amazon buyer, and then treat them like they're the enemy?

As for holding a paper book, I debunked that one years ago.

Please follow my links and read them. It will save us both a lot of time in the long run, and will save me from repeating myself if we're both equally informed.

Steve: Talking about cover art….I mentioned that we paid large sums of money for cover art.  This is done for the print books because it's the cover that catches the consumer’s eye on racks and racks of books. Studies show you only have about six seconds to catch a buyers eye in a retail store.  We have a much larger space to design for when doing print books than we have with ebooks, so the art has to be catchier.  We do foiling and embossing and spend a lot of time and money on designing covers.  Ebooks are different.  When it comes to showing the book cover online, you're primarily dealing with a postage stamp area until the potential buyer clicks on a link to see more information about the book.  Artwork also shows up very differently online than it does under lights on a shelf.

Joe: I'm sure I could get my cover artist together with your cover artists to discuss the nuances of vectors and the rule of six and the variance in hue under incandescent vs. florescent, but all that would likely do is make my cover artist overcharge me like you're being overcharged.

I realize the difference between a postage sized jpg (you forgot to mention it also needs to look good in greyscale) vs. a full paper cover that is foiled and embossed, but $6k is too much to pay.

My point: the cover artist shouldn't be paid more than the author. For some reason, that just seems wrong to me. And with Kensington giving out advances under $6k, that's bound to irritate some people.

Know what else seems wrong to me? The publisher netting more than the author. Unless the publisher put in a few hundred man hours on a manuscript like the author did, I feel the author should make the lion's share of the profit.

You know who else feels that way? Amazon.

Steve: In terms of our new digital acquisition, Lyrical Press; that we just announced two weeks ago, I gave some of the terms of the contract.  We are paying quarterly royalty payments and we pay 40% of net receipts.  I imagine that most of these authors will be newer authors and we will not be paying advances, but there will definitely be some that will get an advance based on prior successful performance. 

Joe: I suggest you poll your authors, asking them if they'd prefer an advance or double the royalties.

I bet most of them take the double royalties. If they don't, send them my way and I'll explain why double royalties are much better.

There's a whole generation of authors coming up who don't care about advances. They care about percentages.

Please explain what 40% of net is. What are you selling these ebooks to Amazon for wholesale, and how much does the author earn for each one sold?

Steve: The reason I acquired Lyrical is for the expertise they had in working in a digital world.  It differs dramatically operationally from the way we work as traditional publishers.  Manuscripts are all submitted electronically and editors review the manuscripts online and comment to each other.  They then decide if it’s a book we’d like to acquire.  All the editing is done online and we have a dedicated group of editors that will just focus on this line.

Joe: Amazon does this too. When they sent me a Word doc with track changes, I almost crapped my pants. I called them and said, "You realize you're the only one in the industry doing this, right?"

It was 2009. It's good that the rest of the industry is catching up.

Steve: Off the top of my head I don't know if we've done any print only deals but I am shocked that with your success that a publisher hasn't wanted to publish you in print, unless you've set your expectations much higher than makes sense for a traditional publishing arrangement. 

Joe: Publishers tend to dislike me. Dunno why. I always thought I was rather loveable. Like a fat, loudmouth Muppet, who drinks.

Again, feel free to contact my agent Jane Dystel concerning my backlist. I don't expect a large advance, or outlandish royalty terms. But I need to keep ebook rights and foreign rights, and there has to be a clear reversion clause.

If you want my print-only rights, you could have them for cheap. 

I'll go back to waiting by my phone for your reply.

Steve: I don't see why for the right level of advance a publisher wouldn't offer you a print only deal.  Publishers are in business to make money and if a deal makes sense there’s no reason not to offer just a print deal. 

Joe: That's what I'm saying!

But, alas, I've probably burned too many bridges in the publishing world. It's my lot in life. I try to help authors, and the industry shuns me. I'm a pariah. A leper. A million sales, and all I have to show for it is a lot of money and a smile I can't get rid of.

It's not easy, being me.

Steve: The comment about a publisher canceling a book after the first book…I don't know how often that has happened with most publishers but it's not very common and I know our contracts would require us to pay the full advance if we were ever to do such a thing…and then the rights would revert to the author immediately.

Joe: I'd need to double-check, but I'm pretty sure Kensington has the right to refuse a manuscript if the editor says it is unpublishable. But I don't doubt your sincerity, and I can accept that your company is not nefarious in this area.

Steve: To sum it all up, I know I've skipped over sections here because it was hard to keep going back and forth looking at the article.  I probably should have done it in Word and replied in each section separately.  Maybe we can break the discussion up into separate sections and continue our conversation in different areas.

We are in this for the long haul.  I'm a huge believer in ebooks and that's why we've been expanding our infrastructure in this area.  It's gone from me handling ebooks myself in 2005 to a staff of six people now. They handle metadata, sales, publicity and marketing…and it's expanding by a couple of more people in the next couple of months.  I agree with you that ebooks are obviously the trend on the rise for the future.  There's less and less shelf space available for books.  But at the same time ebook display space is going to get more and more crowded and it's going to be harder and harder to separate one ebook from the rest of the bunch.  Algorithms on what you've bought before will only get you so far. Sharply discounted prices will only get you so far when everybody is doing it.

Joe: When people say things about the new changes in the industry being hard, I like to remind them about how things used to be.

Wasn't it always hard to separate one book from the next? Wasn't there always limited shelf space? Weren't all publishers always doing what everybody else was doing?

This is always been a tough biz, with more failures than successes. Ebooks are more of the same.

Steve: Publishers have far more marketing opportunities available to them to get their books showing on the web pages of these retailers than any single author, just because of the volume of the books that the publishing company offers these companies.  A successful ebook publisher might be making $10,000, $100,000 or even $1,000,000 from Kindle…but Kindle is making many many times that amount from publishing firms.  They offer promotional opportunities to publishing houses that the self-published author just doesn't have.  They allow publishing companies to meet with their editors to pitch the new and important books for a season.

Joe: How about instead of paying Amazon for promo spots, you just lower your ebook prices? You can take the money you saved and give authors better royalties.

Steve: Joe, your success and the 150 other people you mentioned that made $100,000 is truly amazing and kudos to all of you.  But you guys are the anomaly still.  This is not the reality of self-publishing yet.  None of us knows how many tens of thousands or hundreds of thousands self-published titles there are that aren't selling at all.

Joe: And no one knows how many are selling.

But I can guess. I can estimate that tens of millions of ebooks are being sold by self-pubbed authors, and the publishing world is completely oblivious.

While the majority of self-pubbed writers may not make a lot of money, the majority of legacy writers don't make a lot, either. But self-pub allows authors to bring their books to market much faster, get better royalties, a guarantee of publication, and control.

That should be enough to frighten the industry a whole lot.

Steve: Thanks for the opportunity to meet you here online.  I’ve of course heard about your success but I’ve never read any of your books…but I will definitely order one now.  I congratulate you immensely on your success and thank you again for giving me the opportunity to give my two cents.  As I've said, Kensington is in this for the long haul and converting self-published authors to Kensington is obviously going to be an important goal for us going forward.  That's why I want to learn as much about this end of the business as possible.  That's why I ordered The Naked Truth About Publishing when I saw it mentioned in The Passive Guy blog. 

Joe: Thanks for ordering the book. All proceeds go to me living even more lavishly than I already do.

I haven't read Naked Truth, but I recommend Be the Monkey by me and Eisler, and the blogs of David Gaughran, Kris Rusch, Bob Mayer, and DeanWesley Smith.

Steve: One more item…sorry…I didn't do the survey that Writer's Digest was talking about…I only stated what they said.  So for people to attack me about that is really not justified. 

Joe: Steve, it's dangerous to quote stats when you aren't sure of the source. On the Internet, that's cause enough for attack. 

Steve: I've read some of the responses to your blog already.  I've ready every comment on The Passive Guy in response to my comments and people have emailed me privately.  One of the authors who had an issue with reversions emailed me and I'm looking in to the issue.  If people want to have an open discussion, I'm probably the most accessible CEO of a publishing company of any size although Dominique Raccah from Sourcebooks is everywhere I look J  I welcome the discussion and enjoy it as long as people don't make blatant misrepresentations and sweeping generalizations that trashes all traditional publishing or Kensington.   There's no need for that. 

Joe: I concur. No trash talk in the comments, people. If anyone acts like a jerk, I'll warn you, then delete you, then ban you. Play nice.

Steve: Your comments were professional as I thought they would be and I appreciate that.  I take unfair personal attacks about me, our employees or my Company very personally.  Kensington is a family run business, now in it’s third generation with my son working with me.  As I mentioned we probably have close to 25 or so people that have been with us over 20 years.  That’s an amazing feat and shows that we are a good company to work for.  That doesn’t mean that there aren’t areas that we should improve upon. 

Joe: Thanks for the responses and your time, Steve, and I hope you stick around to answer more questions.

And congrats on 40 years and three generations, and to have such a loyal staff.

Steve: Thanks again.  BTW, I know I rambled all over the place here but I have no idea how to make this comment box bigger so that I can re-read what I've already written…

Joe: Here's all of my questions condensed in one section. Many are about numbers and data, which you seem reluctant to offer. But for authors to make informed decisions about which paths to pursue, they need facts and transparency.

If you don't want to answer, that's fine. I'm sure some Kensington authors will chime in anonymously to answer.


Steve again replied in an email to my questions below. I'm extremely impressed by this, and again thank Steve for his time and thoughts.

Steve: Joe, thanks again for the opportunity to reply and have this dialog. I’m replying to your questions all condensed at the end.  These posts get so long that we can go in so many directions but I’ll try to respond directly to your questions.

Joe: Is Kensington at all concerned about the amount of authors self-publishing? Why or why not?

Steve: I think any company should be concerned about the amount of authors self-publishing that are successful enough for us to have wanted to publish them traditionally.  We’d be idiots not to be and I can assure you larger publishers are not idiots.

Joe: How does Kensington plan to keep authors as ebooks become the preferred way to read?

Steve: If eBooks continue to grow, as I hope they will, it definitely has a major impact on the existing publishing model.  The only reason to date that advances for authors have stayed at the level where they are is because publishers were making money from ebook sales on their books while print sales were declining. The rate of decline in print sales has slowed down but there is still less and less print space available to sell physical books.  But at the same time, websites are more crowded than ever and the authors have to find ways to break themselves out from the crowd or they never will be discovered.  If everyone is using discount to sell books, no one stands out.  This is a problem for us all to find an answer to.  There have been many articles I’ve read that state that ereader device sales have slowed tremendously.  Those that want one, already have one….so we’ll have to wait and see if sales definitely continue advancing in ebooks.  There has been a tremendous leveling off in ebook sales that I’ve seen on our ebooks.

I don’t think we have done many print only contracts so far.  So if an author wants to come to Kensington we generally are going to want p and e books.  We’ll have to see if we change our policy on this.  But if we’re only getting p rights, publishers can’t continue to offer the upfront money that authors are currently getting and many of the authors, especially the larger ones, want that.  For us to want to compete with indie authors we have to find a way to make our story compelling to you.  This would include have top-notch marketing support for your books and being able to get them into promotions that an indie author wouldn’t normally be able to get into, as I’ve discussed earlier.

Joe: Are Kensington's mass market royalties 8% or 6%? What are Kensington's ebook royalty rates (as opposed to Lyrical's 40%)?

Steve: Kensington’s mass market royalties have been 8% for a long time.  There are authors that have splits as well and some that are higher.  Generally the bigger the author, the bigger the royalty rate obviously.
Kensington’s normal ebook rates on books that we are publishing in print and ebook are generally 25% of net receipts, like all of the other major publishing houses. There are also exceptions to this.  Keep in mind that we haven’t lowered our advances so the ebook sales have balanced the declining print sales which have enabled advances to remain steady.  We also have higher royalty rates in our eKensington (digital) line for many authors with successful past track records.  We’ve also paid advances on eBooks where we feel an author’s previous history would warrant one.

Joe: What is the average advance for a Kensington author? If we remove the Top 10 highest paid Kensington authors, what is the average advance of the rest? What percentage of Kensington authors earn out their advance? What does the average Kensington author make annually?

Steve: I have no idea what our average advance is for a Kensington author.  We have many first time writers that obviously have smaller advances and then we have many that have six figure advances and more. Once again if you remove the top 10 authors, I don’t have any idea what the average advance is.  I’ve never looked at advances that way.  We make an offer for a book to an agent or author and they either accept it or reject it, or we negotiate further.  We do deal with authors that aren’t represented by agents.  In terms of what percentage earn out the advance, I don’t think I’d have this information readily available in any easy to find source.  We obviously want as many to earn out as possible but the bigger the advance, the less likelihood there is a chance that they will earn out.  Of course just because an advance doesn’t earn out doesn’t mean that the publisher isn’t making money though.  Just as a gut feeling, I would think that most advances under $35,000 will earn out….then as you start working your way up, it really depends on that individual author.  No hard and fast rule.  I also don’t know what the average Kensington author makes.  I will try to find answers to some of these questions though.  It’s hard to extract this information when you have to deal with reserves for returns on printed books.

Joe: What does the average Kensington employee make annually?

Steve: In terms of Kensington employees, I’m not going to discuss average salaries in an open forum.  It would be bound to start a fury in the office for those who are below the average.  We pay our employees competitive wages and benefits otherwise they wouldn’t be working for us and we wouldn’t have such a low turnover rate.  We’ve had profit sharing several times over the past five years as well.

Joe: How many eKensington and Lyrical authors have you published? How many of these ebook-only deals have you gone on to publish in print? If you don't want to give specific numbers what is the percentage?

Steve: We only started eKensington in 2012 I believe so we only published about 35 e-only titles.  We didn’t do any of those that I know of yet in print.  They were all made available in POD at Amazon and Lightning however.  In 2013 we will be doing closer to 100 titles and the program is growing rapidly.  I don’t know that there are any plans for these to be in print yet because we’ll wait to see how they perform first in e only.  I know there are some novellas that will be combined into other collections however and will be released in trade.  Our ebook only line has not been out long enough yet to have books turned into print with the exception of possibly a very select handful of authors which we’re examining right now.

Lyrical was just acquired two weeks ago so we haven’t released any titles yet but we will be picking up about 250 titles from the backlist and reissuing them as new contracts are signed with these authors.  We are getting a very large number of submissions for the imprint since we announced are acquisitions including some from the people on your blog and The Passive Voice.  Lyrical will take a while to get ramped up to full speed with new acquisitions so this will be a building exercise.

Joe: Do you still believe segregating self-pubbed ebooks on retailers websites is the way to go?

Steve: The comment about segregating self-pubbed ebooks on retailer websites was sort of tongue-in-cheek….I said in MY perfect world they would be segregated to give publisher’s books greater visibility.  I do think that there is a market for an ebook retailer that just sells low priced ebooks….just like there are stores like The Dollar Store and others that have very low price points for all merchandise.  I’m not saying it should be $ .99 ….maybe its books for less than $3.99….I don’t know.

Joe: Do you understand why authors find non-compete clauses unfair?

Steve: Yes I understand why authors would feel a non-compete clause would be unfair but with traditional publishing we have to look after the investment, which can be very large at times, in an author and we have to protect that investment.  We can’t have an author writing the same genre for another publishing house and coming out at the same time as our books.  We have to be able to work with the author to make sure we’re both doing everything we can to maximize the sales of their book.  We publish many authors where we might do contemporary romances and another publisher might be doing historical romances.  This is very common.  I’m sure we have authors that we’re publishing now that are also continuing to do their own indie titles, perhaps in a different genre though.

Joe: What does Kensington sell ebooks to Amazon for, and how much does a Kensington author earn on an ebook sold on Amazon?

Steve: Kensington wholesale ebook terms are exactly the same for all ebook retailers.  It’s a 50% discount off the digital list price.  No matter what the retailer sells the book for, they have to pay the full amount to us unless it’s a discounted promotion that we sponsored where we lowered the price point for a short period of time.  All the players are on the same playing field.  As I had mentioned earlier there are many many times that some ebook retailers will sell way below the cost of the books and eat that loss to gain market share and get you locked up on using their device because you’ve made an investment in books for a specific device. And yes I know you can read books on tablets in a Kindle or Nook browser.  The author will make the specified percentage of what we receive from the ebook retailer.  No fees are deducted from the receipts. Apple is on an agency model and our digital list prices are the same across all ebook retailers.  Being on the wholesale model allows the retailer to discount the books and promote them more, thus increasing sales hopefully.

Joe: You stated there is nothing in a Kensington contract that an author can't discuss publicly, so why the reluctance in talking contract terms? Agents and your competitors certainly know your terms. The only ones that don't are authors considering submitting to Kensington. Wouldn't it be helpful for them to know these terms?

Steve: I’ve given you the broad outline of our terms.  And as I said earlier if someone submits to us and we want to make an offer for the book, the author will certainly learn our terms.  They’re not forced to accept a deal and they can negotiate certain points with us.

Joe: And finally, why should an author sign with Kensington rather than self-publish?

Steve: The last question is the big one…..why would a self-published author want to sign with Kensington rather than self-publish.  In my opinion, I’ve said over and over that the 150 people that you mentioned selling more than 100,000 books annually (I’m hoping that’s right and it wasn’t $100,000 annually), are definitely in the very small minority of self-published authors.  I don’t know what evidence or data there is to show how many other authors are selling 500 copies, 1000 copies or 50,000 copies.  Bookscan allows us to see what an author is truly selling at point of sale on a uniform basis.  Unfortunately Bookscan isn’t available for ebooks yet because that may be an eye opening experience for everybody to see…..providing that Kindle would ever even consider sharing that data.  Amazon is very secretive about sharing sales information.  For that matter so are most of the ebook retailers.  But Amazon is very quiet about it just like they are quiet about showing their profitability by channels of their business.  You don’t know where any money is being made from Amazon….is it coming from books, distribution of other product, their web services division,, zappos……who knows?

We have to make our marketing our strength to attract indie authors that we want to publish with Kensington.  We don’t want to publish all of them.  We want those that have been growing and are successful at selling a respectable level of ebooks.  We don’t want to convince an indie author who is only selling 250 copies of their book to come to Kensington unless the story is just so overwhelmingly fantastic that we think it should go into print immediately and that the writer is an undiscovered talent.

I hope I’ve answered all of your questions.  I’ve gotten a lot of personal comments from readers on your site as well as The Passive Voice thanking me for my opinion and for being brave and sticking in the room with all of you.  I see an open dialog leading only to positive results for all of us.

Joe sez: Again, big thanks to Steve for not only continuing this dialog, but for checking the comments and answering questions. I notice that Kensington has already made some converts here, so in terms of being a good will ambassador, you've done admirably. Especially since the blog is considered waaaaaay behind enemy lines.

I also thank you for your respectful tone and seemingly eagerness to learn.

See, Big NY Publishing People? You can respond here and be treated with respect. I'm not a raging lunatic bent on revenge. I simply want the industry to realize that authors are being screwed, and that you better shape up because they no longer need you.

I'd like to respond to some of the things Steve said in this last bit, and as always, Steve is welcome to reply again via email or in the comments. I believe we might have reached the limit of what Steve is willing to divulge, and I also have noticed some repetition of ideas and themes that indicate some of my comments aren't sinking in yet. But this is a pretty good start, and if Steve is truly paying attention and understanding the breadth of what I'm saying, I can't see any choice for Kensington but to change certain policies, or start losing money.

Steve: I can assure you larger publishers are not idiots.  

Joe: Many are either idiots, or evil. The collusion, unconscionable contract terms, and poor way authors are treated either shows an ignorance of how to treat people and run a business or a deep-seated belief of superiority (which can easily be called evil.)

Steve: If everyone is using discount to sell books, no one stands out. 

Joe: All paper books are priced the same, or very close. The difference between paper and ebooks is that indies quickly learned that discounting is what customers wanted. It wasn't so much "standing out" as "remember the $9.99 Kindle boycott." In a nutshell: ebooks cost less to produce, customers know this, customers want to pay less. And the old meme by publishers that "ebooks cost as much as print" is patently bullshit. (Every time a hardcover sale is replaced by an e-book sale, the publisher makes $2.20 more per copy and the author makes $1.58 less. Barry Eisler, perhaps non-coincidentally, also brought this figure up in his terrific response to literary agent Richard Gottlieb. Go read it. Trust me. It's brilliant.)

The book market has always been competitive, but it has never been forced to compete on price like, well, every other industry. I've made the point, various times, that if all ebooks were under $4.99, there would be widespread growth. Readers have fixed budgets, and many readers are voracious. They'll binge on lower prices. If all major publishers lowered their prices, it wouldn't mean indies had more competition. It would mean readers had more money to spend.

Steve: There have been many articles I’ve read that state that ereader device sales have slowed tremendously.

Joe: Read this one. Kindle sales higher than ever in 2013 holiday season.

Steve: For us to want to compete with indie authors we have to find a way to make our story compelling to you.  This would include have top-notch marketing support for your books and being able to get them into promotions that an indie author wouldn’t normally be able to get into, as I’ve discussed earlier.

Joe: Ebooks aren't zero sum, so there isn't really competition for sales. Only for visibility. 

I'm aware that publishers can do Amazon promos that most authors can't. I really can't say anymore without breaking my word to keep mum, but I'll ask: What if Amazon allowed authors access to the same promotional opportunities that publishers have? How would that change things?

Steve: I’ve never looked at advances that way.  We make an offer for a book to an agent or author and they either accept it or reject it, or we negotiate further.

Joe: Earlier I mentioned that there is a new generation of writers who care more about royalty percentages than advances.

But here's the thing about advances: theoretically, the larger the advance, the more the publisher must do to protect that investment. So getting a ton of money will automatically mean getting a ton of advertising and promotion, which increases the likelihood of success. I imagine a $2500 advance would get a quarter page in the catalog, a press release (worthless), review galleys to all the usual suspect, and perhaps some giveaways at BEA. That won't increase awareness for a title like full page NYT print ads, or a big tour, or getting the author on NPR.

Obviously you're going to pay proven performers more than untested newbies. But this road leads to 8 figure advances and ultimately bankruptcy when paper becomes a subsidiary right. (I predicted that in 2010).

Why not make advances equal for all Kensington authors, and then offer exceptional contract terms to those big shot bestsellers? It will even the playing field, give Kensington more and immediate liquidity to increase promo for all titles, and above all be more equitable to the majority of Kensington authors.

For example, like most bestselling authors, I don't need a huge advance because I already have money. But you can have print-only rights to my ebook The List (150,000 ebooks sold) for ZERO advance. All I ask in return is 10% mass market royalties instead of 8%.

Is that something you'd consider? If so, contact my agent, Jane Dystel. Remember, if ebooks are only 30% of the market, The List should sell 500,000 paperbacks. 

I'll be here waiting by the phone.

Steve: We only started eKensington in 2012 I believe so we only published about 35 e-only titles.  We didn’t do any of those that I know of yet in print.  They were all made available in POD at Amazon and Lightning however.  

Joe: Ouch. So "e-only" apparently is more of a guideline than a rule, since you're making them available in print via POD.

I can see how this still fits in with the farm team mentality, but this is exactly what an author can do on their own (or with an estributor) for sunk costs (or a small royalty fee) and they get to keep the rights. I'm assuming Kensington has the rights to these books.

To me this seems less like a baseball farm team and more like a dairy farm, where cows are being poorly fed and over-milked.

So none of these 35 authors have gotten into Costco as far as you know, but they're making far less royalties than they could on their own, plus they lost their rights and their ability to control prices. 

How is Kensington benefiting these authors? Have any of them hit the Kindle Top 100? Can you see how, when I explain it in these terms, it seems less like publishing and more like exploitation?

Steve: We can’t have an author writing the same genre for another publishing house and coming out at the same time as our books.

Joe: Why not?

I have a rule I abide by: I don't do anything that doesn't work on me. For example, I've never given out bookmarks at conventions, because I've gotten dozens of booksmarks from authors and never bought their book because of it. So I assume if it doesn't work on my, it won't work on others.

Conversely, I do try things that do work on me.

When I read a book I love, I immediately try to find more work by that author. I'm pretty sure I'm not alone in this sentiment. In fact, I'd say it's probably a normal reaction.

I get daily emails from readers asking me when my next book is coming out--and I have 60 titles available. They've read them all, and want more.

Readers want more. A non-compete prevents them from getting more. The clause is archaic and unfair and you should kill it unilaterally. Hint: Amazon has.

Steve: Kensington wholesale ebook terms are exactly the same for all ebook retailers.  It’s a 50% discount off the digital list price.

Joe: So on a digital list price of $4.99, a Kensington author earns $0.63 (25% royalty rate off $2.50). Whereas a self-pubbed author earns $3.50 on a $4.99 ebook.

Steve, for the love of all that is good, how do you expect authors to keep accepting that? I ask again, is your future business model based to the belief that authors don't know any better?

Steve: And as I said earlier if someone submits to us and we want to make an offer for the book, the author will certainly learn our terms.

Joe: I understand the dodge, because you mentioned earlier that terms can change depending on the contract. But when authors are trying to make informed decisions, seeing a boilerplate would help them do so.

As to my point blank question "Why should authors sign with Kensington?" I'm rereading your answer an not finding any real answer.

We already know that an author shouldn't expect huge success like me or Hugh Howey, or insane success like Lee Child or Nora Roberts, so mentioning that no one knows how many self-pubbed authors are doing well isn't a convincing argument. It's like saying, "Bestselling self-pubbers are anomalies, and the rest of self-pubbers are probably selling a whole lot less, so you should sign with Kensington."

But you haven't mentioned how many copies an average book sells, or how much an average Kensington author earns annually.

You said you have to make marketing your strength, but have provided no examples of how you market, or more importantly, how marketing led to a Kensington success where the author made a lot of money.

I appreciate this open dialog, but I get the impression that some of the things you left unsaid might be more important than some of the things you have.

Take a long look at this blog post, and the questions and scenarios I've posed, and the way I've deflected your points and continued to bring up points you've seemingly dodged. 

The future of your company is very much at stake. Amazon KDP is open to all authors. They offer 70% royalties. Companies like BookBub, Kindle Nation Daily, Pixel of Ink, Ebookbooster, and BookBlast can assist authors in making their self-pubbed ebook visible. And Amazon does a great job of helping customers find content. 

Kensington's strength is paper distribution. That's what informed authors submitting to you want.

But that strength won't be a strength much longer, as ebook sales overtake paper. Then where will you be?

Thanks again for stopping by, Steve. And for my readers--keep the comments respectful and to the point.


Steve: One more time with the replies….then I really have to do some work. ;)

Ok so I can’t say for sure that most publishers aren’t idiots….I can just assure you that I’m not.
Paperback books are indeed all the same price, or similarly priced and then accounts do discount them; at least some of them do…but they are discounted so the retailers still makes money.  I don’t think I’ve ever seen anybody discount a printed book below cost other than Amazon.  And even though all print books are similarly priced, we have different ways to distinguish books in a physical market.  Cover design, foil and embossing, etc…  minor differences admittedly but still differences.  You also have a lot less competition on the shelves in WalMart for example versus the online world.  And in the clubs, they actually take very few books, generally only books that have big potential since they work on extremely thin margins. 

I agree with you 100% that ebooks cost hardly anything to produce in comparison to printed books.  Of course you have art, formatting, etc….. but in the ebook world these charges are much less.  There is obviously no manufacturing.  We do have other costs that we don’t have with print books though.  We have a digital warehouse, in our case it’s LibreDigital, who stores our files and sends them out to all of the retailers….this is not inexpensive.  We also have anti-piracy companies that troll the internet looking for illegal copies of our books.  BTW are KDP books DRM free out of curiosity? 

Joe: I've never seen a satisfactory study that piracy hurts ebook sales, Steve. I've blogged about piracy at length, and encourage file sharing of my ebooks. Customers hate DRM. Why would I intentionally irritate my fans?

Ditch those anti-piracy companies and DRM and follow Tor's example. Then use that money to give your authors better royalties. ;)

Steve: In the situation where we’re not talking about an advance being given, an ebook royalty should definitely be considerably higher than a print royalty.  This is why for Lyrical Press it’s 40% of net receipts versus a standard of 8% of list price on a printed book. 

Some stats were talked about at DBW last week that said people are buying a lot of ebooks but aren’t reading them…..they can be stock piling.  We can see this type of information from subscription services like Scribd….they provide how long it takes a person to read a book and if they indeed finish the book.  The results were truly staggering.  When I see printed books on sale I buy them and the to be read pile is growing rapidly.  If I wasn’t blogging I could read. :)

Joe: I've known about bingeing since 2010. I called it the buffet mentality. Our to-be-read piles are getting bigger in a digital world.

This is a good thing. It means a market can grow even if there are no new customers.

Steve: Regarding how ereader growth has slowed down….the link you gave me says that Amazon will not release how many Kindles were sold.  And frankly I don’t give full faith in all the promotional hype that comes out of Amazon anyhow.

How many Kindles, exactly? We still have no idea since Amazon refuses to share any actual numbers.

But speaking of tablets, Amazon says that more than half of its customers shopped using a mobile device this holiday season.

Joe: I don't find that Amazon does much promotional hype. I find them to be cagey with information. It may be me, but I find Apple tries to stay in the spotlight, while Amazon is content keeping to itself. They don't even usually respond to widespread public criticism.

I suppose they could be lying, as part of some grand self-fulfilling prophecy where if they say they sold millions of Kindles, eventually they will.

But then I just was on a plane and saw four people with Kindles. So I'd guess they're selling pretty well.

Steve: I agree there is competition for visibility which is getting harder and harder.  Services that promote low priced ebooks by sending out emails are wonderful, and we use them all the time.  But for the first time ever, I’ve seen some diminishing success in our results just last month.

Joe: I continue to see strong results. But we both know that if marketing always worked, every book would be a huge hit.

Steve: If Amazon offered the same promotional opportunities to writers as they do to publishers it would kill the additional revenue they would make from publishers.  They value the hundreds of millions of dollars in revenue they make from publishers so I don’t see this happening but it’s an interesting hypothetical question.  It would certainly change the dynamics dramatically.  But opportunities that the biggest houses have like pitching your books to the Amazon editors will never be offered en masse to indie authors. 

Joe: I cannot confirm nor deny any of this, and have nothing I'm able to offer. It was entirely hypothetical.

Though en masse is an interesting word choice. I mean, offering promotion opportunities en masse makes no sense. If Amazon hypothetically were to offer authors promotional opportunities, I'd imagine it would only be to bestselling authors. 


Steve: Yes you are absolutely 100% correct that the bigger the advance for the author the more promotional funds will be spent on that author.  It only makes sense, like you say.  We have to earn a return on our advance and make sure the book sells. 

I don’t think we’d have many happy authors if we made all the advances the same.  I think you’d be hard pressed to find any traditionally published authors that would like that, especially if they’re earning anything substantial in the upfront money.  I don’t think it’s up to the publisher to level the playing field for all of their authors.  Some we pay big money to acquire from other publishers.  Others we invest a lot of money over a period of time and watch the author’s sales continue to build.  We want to keep building the authors that we’ve seen that are working.  Certainly not all books sell well at all.   There are many that are bombs and you just hope you didn’t spend a big advance on that author when that happens.  Then there’s the opposite as well.  You can pay almost nothing for an advance and then sell an enormous amount of copies.  (BTW, I like that scenario).

Joe you are a true anomaly.  To say you wouldn’t want an advance because you already have money is unheard of in this business.  We publish many big authors and I’ve never had one of them tell me that they’ll skip their advance for a higher royalty rate.  We have done deals with a few big authors a handful of times where we split profits 50/50.  But I have to say in all fairness, that these generally have not had the greatest outcome. 

Joe: I've heard Stephen King does that. I'd do it in a heartbeat. Or I'd take 10% mass market royalties on print-only with zero advance, as I mentioned.

I may indeed be an anomaly, but how will you know for sure until you start offering these terms to authors?

Steve: The overall ebook market is 30% of publishing revenue.  Not every title is going to be the same.  So there is certainly no guarantee, and it’s highly unlikely that The List would sell 500,000 copies.  First of all the book was release several years ago I believe.  So many people that would have bought it have done so already.  And if it came out earlier in e, as this did…..and the readers were able to buy it at a much lower price than it would be in print, the sales wouldn’t be nearly as high as if they had come out at the same time.  I mentioned in a reply that I looked up print sales on Bookscan of some big indie authors and the print numbers although good, were not anywhere nearly as high as the ebook edition.  I’m sure this was because of the late release of the print book.  The real test would be to let a publisher publish your book in print at the same time you release it yourself but the publisher can’t be trying to sell the printed book for $10.00 (using a low trade price since there’s no advance) against a price of $1.99 for the ebook.  There needs to be some sort of parity which is what the Agency model tried to do.  The ebook price had to be set with a specified correlation with the printed book otherwise the ebook retailers wouldn’t sell the ebook.

Joe: Here's an interesting fact about The List. It has been in the Kindle Top 100 on four different occasions, spanning four years.

The "too many people have already read it" meme makes no sense. Right now Salem's Lot is #17 in Top 100 Horror on Amazon. King wrote it in 1975. Surely everyone would have bought it by now?

Now you know the paper market better than I do, so if you see parity between ebook sales and paper sales, I believe you. But I'd guess your average shopper browsing for a paperback thriller in WalMart or the check-out line in CVS doesn't have a Kindle. Which means The List is entirely new for them. These are two completely different demographics.

But I get your point, and I'll stop waiting by the phone for your offer.

Steve: Regardless your books should be in print from a traditional publisher.  If there were no advance for these older books you were certainly sell more copies than just making them available in POD on Amazon.  You’d have much broader distribution.  I don’t know what your sales would be, not even a guess, but it would certainly be more than you’re selling now in print.

Joe: Indeed it would.

But if any of my previous publishers had managed to get me widespread distribution and put some major promo dollars behind me, I'd still be with them and not self-publishing.

I always guessed there was a large audience for my writing. Legacy publishers couldn't find that audience. I found it on my own.

If that means giving up the potential to be in Sam's Club, so be it.

Steve: In terms of the e-only approach, most of these authors, but not all, are first time writers or relatively unknown writers so their books can’t go into print immediately.  They first have to have a following built in e.  This could take several books to happen.  As I mentioned earlier very few books get into the clubs regardless.  I’m not sure if any have hit the Kindle Top 100 but we also haven’t been pricing them at $ .99.  Somewhere there’s a crossover point where the number of copies sold times the price will balance out with selling more copies at a low price versus fewer copies at a high price.  With Lyrical Press our price points will be lower but not at $0.99 unless we’re doing a one day promo or something similar.  Perhaps the prices might be $3.99. 

Joe: I did a lot of experimenting with prices, and continue to do so to find the sweet spot between unit sales and profit. It's an ongoing process that involves changing, sometimes often.

If Lyrical wants to succeed, you need to be able to closely monitor data, change quickly when needed, and experiment a lot.

Steve: We will give all of these authors marketing support with blogging, facebook ads, social media exposure, etc….  I don’t consider that exploiting authors at all.  And even if they stay in only POD, they’re available on more than just Amazon.  Lightning would be carrying them which would mean they’re available to B&N, Ingram and anybody who wanted to order the book from an indie store; although these are still small numbers.

Joe: Steve, you saw my figures above for what an ebook author makes through Kensington vs. on their own. Lyrical royalties are better (40% vs. 25%) but an author can make $2.50 more by self-pubbing a $4.99 ebook than they can through Lyrican ($3.50 vs. $1.00). You're saying, in exchange for them giving up $2.50 in sales per unit, you're blogging and doing Facebook ads? 

Are you selling enough extra copies doing this to justify your cut? As these blogs and ads resulting in 3.5x the sales that wouldn't occur if the ads didn't happen?

Authors can use social media without Kensington. And I'd guess that even with an aggressive Facebook campaign which the author personally financed, they'd be better off going solo.

BTW, I sold a million ebooks and never had a Facebook ad. Just sayin'.

Steve: We don’t want to compete against another publisher with our author.  We want to control how often the new books are released and how their backlists are reissued.  We don’t need another publisher coming out with a book by author x at the same time we are.  That’s a disaster for the author and the accounts and the accounts would end up buying one and not the other.  Most authors are writing one or two books per year.  I know there are exceptions and we publish some of those authors more frequently, but it is the exception. 

Joe: Fair enough.

How about a non-compete clause that still allows authors to self-publish?

Steve: In regards to the royalty calculation, the 25% was on ebooks that were published with a traditional print book where revenue is applied from all channels to try and get the advance to earn out and hopefully make some money on the book.  People forget that publishers are not making fortunes; I know some of the bloggers will jump up and down about this and say it’s their shiny buildings and their high salaries. 

Joe: I've seen the parties publishers throw at BEA, in booths that cost a small fortune. I've gone to expensive lunches with editors. I know how much rent in Manhattan is.

Stop the parties. Stop the expense accounts. Move to Jersey. Cut the waste. And pay authors more.

Steve: Publishing companies have overhead, you can’t help that.  A lot of that overhead goes to the printed book in terms of the sales force, production, accounting, lawyers, editors, artists, etc..  On the Lyrical Press model the author would be making considerably more.  They would be getting $1.00 per book versus the self-published amount of $3.50 on the $4.99 book.  However our sales wouldn’t be limited to just Kindle.  We would be selling in iBooks, Nook, Kobo, Sony, etc… and hopefully those other sales will be substantial.  Kindle only represents about 52% of our ebook sales….I think for most other publishers they would represent considerably more.  But since most of our books are in the women’s fiction area, they have broad appeal on all of the e-reading devices.

Joe: I also self-pubbed on all of those platforms. I found I made more in the Kindle lending library than all the others combined.

I wonder why you and I (and other self-pubbers I know) have had such different results. Any commenter care to hazard a guess?

Steve: When we’re talking about giving away a percentage of royalties do you expect publishers to give away 70% of the net receipts like Amazon is giving to self-published authors?  That wouldn’t be a viable business model for publishers.  The numbers just wouldn’t work.  There has to be a hybrid model that works for indie authors and traditional publishers.  But it would involve the books coming out at the same time and at realistic pricing levels so that the print book has a chance of selling.  People have been proclaiming print books are dead for a while now but that decrease seems to have stopped.  It may change again as there is less physical space but it’s still a big business now. 

Joe: I assume you've done multiple experiments and found, time and again, that low-priced ebooks hurt the paper sales.

Could that be why paper is 70% of your sales? Because you price your ebooks too high?

When looking for that sweet spot between units sold and price, shouldn't Kensington try to do more experiments?

In the comments section, Virginia Carmichael Munoz (aka Mary Jane Hathaway) has two books coming out in print this summer from a S&S imprint. What pleases me is that her ebooks are available now, months before the paper versions.

This is reverse windowing, and in my opinion a very smart idea.

Virginia also refutes my earlier assertion that no legacy author has ever gone self-pub and then gone back to legacy. She just did exactly that. Then again, if her publisher was Harlequin, I still stand by my original statement. Harlequin isn't a legacy publisher. They're a blood sucking monster. 

Steve: In terms of what marketing we’ve done to support authors; there’s enormous amounts of work that has been performed by us and other publishers.  We have an author now where we’re working with a company that does house parties; like mini book reading groups and offers the host and guests all sorts of perks.  It’s had great success in building an author.  We’ve also spent loads of money on advertising for print books and ebooks combined.  And what about the library market?  I saw you’re starting a venture to sell indie books to libraries.  The library is a huge market for publishers and they are amongst the most voracious of readeres.  Our relationships with the suppliers to libraries is of paramount importance for ebooks and print books. 

Joe: Those are great ideas, and I wish you every success.

When I get my library gig up and running, I'll shoot you an email. I'd love to offer Kensington ebooks to libraries at reasonable terms.

Of course, our definitions of "reasonable" may vary.

Steve: I didn’t mention averages of sales because I don’t know them.  We don’t look at our sales that way.  We look at all books on an individual profit and loss basis. 

I think stating that no one knows how many self-pubbers there are and how they’re ALL performing is a convincing argument, so I disagree with you there.  The fact that Amazon says there were 150 authors that sold 100,000 copies and at what price they were sold is extremely misleading.  That could be $100,000 and the author earned $ 70,000 or it could be considerably more.  But most importantly it’s only 150 KDP authors.  How many KDP authors are there?

Joe: I'd guess well over a million, looking at some of the lowest ranked titles. As I said in the comments, I describe self-pubbing as a "shadow industry."

It exists, and makes tens of millions of dollars annually (if not much more), and no one knows anything about its size except for Amazon, who isn't spilling the beans.

I find it fascinating that Bookscan--which most publishers subscribe to--was originally rebuffed by publishers. They wanted to keep their sales number secret.

Now publishers rely on Bookscan, even it is clearly not counting a giant percentage of sales. Yet publishers will cite it, and other surveys that don't include indies, as proof of growth or stagnation or sales.

The publishing industry hasn't fully realized that they can't see the whole picture. They can't even imagine the whole picture. The shadow industry of self-pubbing involves thousands of authors who are no doubt doing well but don't appear on anyone's radar.

Legacy needs to worry less about looking at self-pubbed successes as a resource to mine, and more about what is going to happen when those self-pubbers refuse to be mined because there is nothing legacy can offer them.

What professional would leave their job and take another for fewer benefits and less pay?

Steve: And once again this is all promotional material from Amazon… or I don’t know if it’s true.  I want to see how much the other 25,000 KDP authors did or whatever the number is.  The people blogging are those that are saying they are making more than they made before or they’re earning more than minimum wage.  An accurate survey of indie authors would be eye opening and enlightening for everyone concerned.  I’ve said it before, you and Hugh are anomalies; you are to be commended and congratulated, but you are certainly not the norm. 

Joe: A study would be eye-opening. And impossible. Only Amazon knows.

But even without a survey, it's undeniable that this shadow industry exists. And even without specific numbers, publishing needs to respond to it.

BTW, Steve, I'm enjoying the conversation, but I have to call you out on your repeated admonition of Amazon for not releasing specific figures, because when I ask you for specific figures you "don't know", "have no idea", and "will try to find answers".

While I'd love to know average Kensington advances, or average Kensington book sales, I don't really expect you to present me with a list of all 450 titles you published last year, and how many each one sold, and what each author earned. Surely you can understand why Amazon doesn't do that, either.

Steve: We need to stop talking units and start talking dollars.  We all bank dollars.  The bestseller lists shouldn’t be based on units, it should be based on revenue when comparing indie books to traditional books.  If that were the case you wouldn’t see nearly as many indie books hitting the lists, which is why I suggested that the lists be broken down by list price and units sold as an alternative.  That puts the whole sales issue into a less subjective light.

Joe: I thought we'd gotten past this, but I'll play.

Perhaps, if you had your way, what you'd see is the majority of Amazon customers looking at the "$3.99 Or Less" lists, and no one looking at the "$4.99 Or More" lists, and legacy ebook sales would plummet.

Also, we don't truly know if Amazon rankings aren't weighted according to price. As a ranking watcher, I've seen a lot of changes on Amazon. It was once much easier to get $0.99 ebooks into the Top 100. Now there seem to be fewer. We don't know what their algorithms are, so right now it could very well be based on dollars, or list price, or money earned. But only Amazon knows. 

That said, I have told Amazon they should try bestseller lists according to price as well as genre. I see nothing but upside to a $2.99 Police Procedural Bestseller Top 100. I don't know if legacy publishers would like that, but I'd love to see it happen.

Both Steve and I have agreed we need to get some work done, so I don't expect to update this blog again unless he asks. But I'm sure he'll stop by in the comments, as will I, and I hope we can all continue to have rational, well-behaved discourse.

And once again, thanks Steve for having the class and guts to respond to my questions.


Steve: Final post--hope it fits...

What are you going to do when there's 250,000 indie books that have been published and they're all under $3.00? How are you going to distinguish yourself from the other 250,000 books… and I'm just picking a number out of the air… maybe there's more than that now… we'll never know… since once again, it's secretive from KDP. How is anybody going to find your book? It's going to be a needle in the haystack.

Joe: Again, Steve, how does anyone find paper books now when there are 300,000 published every year?

Granted, the paperback rack at Walgreens or Terminal A at O'Hare only have a few dozen choices, of which several are from Kensington, so choice there is much easier. If someone likes suspense, they see a Lisa Jackson novel, and there's a sale for Kensington.

At least, until those paperback racks disappear, and then Kensington will also have to compete entiremly via ebooks, where there are 250,000 other options, most of them less expensive.

(And I'd guess that there are currently over a million self-pubbed titles on KDP, and many authors are doing just fine. Beverley Kendall just did a very compelling self-pubbing survey, worth a look for all readers of this blog. Check it out here:

But mass market racks aside, paper books have always had competition. I've heard Borders and B&N stock hundreds of thousands of titles in each location. (Correction: Borders used to, when it still existed). One of my major laments as an author is that when I had a new hardcover release the bookstores would have three copies (or less), spine-out in the Mystery section. How could anyone find me among the Pattersons, Parkers, Cusslers, Clancys, and Evanovichs, each with an entire shelf to themself? It was just as difficult for my books to be discovered then in bookstores as it is to get discovered now on Amazon.

However, Amazon has an equivalent to a paperback rack at the airport: the bestseller list. Get on some Top 100 genre lists, and your book will sell. It's a similar kind of visibility.

How do you get there? Same way you do with paper. Advertising, promo, blogging, social media, word of mouth. Ebooks are no more competitive than paper. In fact, authors finally have an equal playing field, no longer having to compete with the bookstore front table where 50 copies of the latest Nora Roberts are stacked up at 40% off.

Also, if anyone is worried about the so-called Tsunami of Crap because there are so many lousy self-pubbed ebooks being released, I dubunked that years ago.

Steve: And as I mentioned before there have been discussions that say that people have now stockpiled many inexpensive books on their readers and sales of ebooks might slow down.

Joe: Again, I go by what my habits are, rather than what I think people might be doing. I still own over 5000 paper books. Readers tend to accumulate books. But I had to stop buying books because I actually ran out of physical space. Then the Kindle came along, and space no longer matters. My wife reads more than I do, and buys four ebooks a week. She reads immediately, I tend to stockpile. But our rates of buying and reading have increased since getting a Kindle, and I believe that's the norm. We've always had TBR piles, but now we're no longer limited by space (or budget--those hardcovers were expensive) so it is natural to hoard. I don't believe it is a portend of doom. I believe it is human nature, and it means we'll all sell more books.

Steve: Scribd and other subscription services provide publishers data where you can see how fast a book is being read. Scribd sells their subscription service very very cheap…the price of a few indie books for unlimited reading each month. $9.00 for unlimited reading. Their data has been shocking for me to see. There are a huge number of books that haven't been even opened but they were bought because they were cheap. There are loads of books that are started and read 30%. There are books that people start and never finish and readers that take months to read one book. What's going to happen when the readers are overloaded with low price books?

Joe: I remember Scribd from years ago, and I was underwhelmed by them. Still am. is another subscription service. And I don't see it as the future. I'll explain why.

Netflix was able to capture the subscription market because all it had to do was acquire a huge library of DVDs, which it got by buying them. But Scribd and Oyster can't just buy a bunch of ebooks and lend them to their subscribers like Netflix did. They have to go into licensing arrangements with publishers (or authors) and my guess is they compensate authors by the download. A reader downloads an ebook (and perhaps reads a certain percentage) and then they have to pay royalties.

The Kindle Owner Lending Library is similar. But when Amazon lends one of my ebooks to a Prime member, I get around $2 (that's the average, I'm guessing). I have no idea what Scribd offers authors, but unless it is similar, I can't see them amassing the same enormous catalog as Amazon. Which means readers will have to go elsewhere for a wider selection.

If Scribd and Oyster do wind up becoming huge, and offer me competitive rates per download, I'd go all in.

I realize that took the conversation off-track, but I've gotten emails from authors asking me about this, and it seemed like a good opportunity to mention my views.

Anyway, Scribd's data is hardly indicative of the ebook buying market, because they are a subscription service. It is much easier to download an ebook and not read it, or start it and not finish it, when you have thousands of others to choose from with your monthly fee. It's like cable TV. Don't like a show? Change the channel, there are 300 other options at any given time. It's not like turning off a pay-per-view movie, which I bet happens much less frequently.

But even if Scribd's data exactly mirrors what is happening with ebook sales, I'm still not concerned because of reasons I mentioned above. Readers hoard. That means sales will go up, not down.

Also, I should probably mention I'm starting a company where I monetize free ebooks. Remember what I said early on about not basing your future on what others are doing? I'm putting my money where my mouth is.

Steve: Rather than predicting the doom and gloom of traditional publishing, I think this is what indie publishers should be thinking about. You're making a respectable living now… some a lot better than others… some better than you were before... and there are tens of thousands that probably aren't even making a dime.

Joe: But there are hundreds of thousands who never made a dime in the legacy system, and can now finally make something. And there are thousands of authors who didn't make much in legacy publishing, who are now making more than ever (or at least supplementing their legacy income.)

I'm predicting doom and gloom because I don't see how, as authors become more informed about their options, the majority will choose legacy. Which means publishers like Kensington, while dealing with bookstores closing, will also have to deal with not getting any quality submissions.

Steve: Only time will tell which scenario will play out… but I don't think publishers are disappearing.

Joe: They won't, if they change their business practices. But my prediction is bankruptcies, mergers, liquidations, and thousands of new resumes on But what do I know? It's not like I can see years into the future... 

Steve: Kensington is a little guy against behemoths. How are indies going to compete against mega-billion dollar conglomerates in the future? What happens if other retailers decide they can't compete against Amazon willing to take a loss on every bestselling book that they sell… Tom Clancy for $1.99 and Sycamore Row for $1.99? The other ebook retailers can't afford to do that. Google could if they were interested in turning up the heat. Overstock tried it for a week or two… they matched the prices below cost for a short while… but losing money on each sale is not a viable business model unless you just want to wipe out the competition. At a certain point does the government step in and say it's a monopoly?

Joe: I already spanked James Patterson for asking for the government to step in.

Steve, can you name a business, any business, that destroyed all competition with predatory pricing? Is predatory pricing even applicable here? Where did I hear that meme before? Oh yeah, I debunked it 18 months ago.

BTW, I don't believe Amazon will wipe out everyone. Other business models will arise that will compete. But more importantly, won't destroy Kensington with low prices, they're going to destroy Kensington by luring away all of Kensington's authors with better royalties.

Steve: Maybe… who would have thought the DOJ would investigate the Big 5 and Apple?

Joe: Good point. But weren't there some people, way back then, who knew the Agency Model was bad and defended Amazon when they banned Macmillan titles? Hmm... who was that blogger? :)

Steve: As I've asked before what happens if Amazon is the last guy standing in ebooks and suddenly decides… okay guys the fun is over… let's change the rate structure. You're now only getting 25% of net receipts and you have nowhere else to go?

Joe: It wouldn't be net. Amazon is the retailer as well as the publisher, and authors set the price, so it would be 25% of gross (list). And guess what? That 25% is still more that the 25% Kensington offers. It's also more than the 40% Lyrical offers.

Steve: These are all real possibilities, not pie in the sky ideas. Amazon has never said they make money on selling books. They are not a huge print retailer. They can't compare to Target or WalMart or B&N in print. Do you know that when Amazon distributes other products for other firms that they study how well the product sells and then makes a deal directly with the manufacturer to wipe out their original partner in sales?

Joe: Bad news for publishers, but not for authors.

Besides, Apple offers 70%. If Amazon suddenly changed royalty rates, I could envision a mass author exodus to iTunes. But maybe, by then, we'll actually have a union that represents us and have some barganing power. Because authors have never had anyone on their side, fighting for their rights. The AAR? Ha.

Steve: Did you read The Everything Store about Jeff Bezos about how he was willing to give diapers away for nothing to put out of business for as long as it took until they would agree to sell Amazon the company? They've done this with other businesses as well.

Joe: Steve, Amazon acquired for $550,000,000. Bezos may not have given them a choice but to sell (I don't know the story) but they weren't driven out of business--they were bought, and for a substantial amount.

Steve: These are the issues I think you indies should be thinking about. Over and out.

Joe: Steve, it sounds like your premise is, "Sign with us for less than Amazon is offering you right now, because one day Amazon may offer you less like we do right now."

I'm sure you see that's a flawed premise.

Kensington's strength is paper sales. That's how you'll attract authors. I'd be thrilled to do a print-only deal with Kensington, and I could introduce you to fifty of my bestselling author friends who would also be thrilled to do deals with you. If you wanted to, Kensington could be the de facto print-only publisher for the biggest names in self-publishing. You wouldn't get any of our ebook rights, but that should be okay because they're only 30% of the market according to your stats.

As I said, I'll be waiting by the phone. ;)

And thanks again for taking the time to appear here and in the comments, answering questions. It really has been a pleasure, and I have a lot of respect for you. I wish you continued success, and I hope you took away something from our exchange that benefits your company, and Kensington authors.


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William Ockham said...

Clearly you haven't actually hired a necromancer lately. Raising a famous historical personage such as Picasso will cost you a lot more than $6000. It is just supply and demand. There is only one dead Picasso (that anybody wants to raise, anyway) and a ton of self-pubbed authors needing covers. Of course, necromancers never tell them that dead Picasso sucks as a cover artist.

Jeremy Lee James said...

Epic tune-up. Well said.

Brett Battles said...

Dead on. And I wasn't polled either.

I realize that it's not true for everyone, but I'm making far more than I ever did traditionally.

But let's look at why I went indie. I'll beat a lot of other mid list writers came at it similarly...I was able to test out the self-pub market when I did because Bantam Dell and Ballantine merged together and the people who had been my biggest supporters were shown the door. The new management had no interest in my career because they didn't bring me onboard. I get that. It's business. This resulted in my last two books getting none of the support they were going to get under the previous management, and when contract renewal time came, mine was not.

With my "declining" sales record (which, despite what anyone in publishing tells you, is more often than not, NOT the author's fault, but a failure of marketing and commitment), my agent and I knew it was going to be an uphill battle to get picked up by a new publisher, and likely if I did, my contract would be one that would force me to go back to working full time.

Figuring I had nothing to lose, and with my agent's blessing and encouragement, I jumped into the independent publishing arena. That was in the spring of 2011. I have not looked back nor even thought about trying to get a trad publishing contract again. (Like you, Joe, if someone came to me with a print contract, I'd be inclined to take it.)

I have never been happier. My books routinely average 4.3 star reviews and better. I can write what I want, as much as I want. And, as I've said before, I've made a very good living that has kept me writing full time.

Does everyone make a lot self-publishing? No. But like Joe eluded to, the $1000 comment is flawed. Most of those people referred to would never even moved beyond the query letter stage. So they are making MORE than they would have.

We DON'T tell painters they can't sell their artwork because they haven't been distributed by the establishment. If they're works don't sell, it's because they're not appealing to buyers. If self-pubs books don't sell, it's because they don't appeal to readers. Yes, there's that means there's going to be a LOT out there, so many books won't sell a ton because of sheer volume, but SO WHAT? People will find good books. It may not happen the year they come out, but ebooks are forever. There's no walking into the Kindle or Nook store and the book your looking for has been removed because room needed to be made for the new month's releases. They are there. Always.

Joe Konrath said...

@Ockham - I got a dude. He could get me Picasso for $200, and I have it on authority Picasso will only charge $1000.

The problem is it's the minimalist Picasso, so my cover art will be a curved line and half a square.

Author-Gerald said...

*Nods* Nice discussion. Trad / legacy publishers just don't get it. They will. Eventually.

Brett Battles said...

And $6000 for a cover? Are you kidding me? I am very picky about my covers. I want to make sure they look like they could have come out of a large, traditional house. Look at any of my covers and tell me I'm wrong. For 6K, I could have anywhere from 8 to 12 excellent covers...and thats formatted for both ebook and print.

Joe Konrath said...

We DON'T tell painters they can't sell their artwork because they haven't been distributed by the establishment.

So true, Brett. Such a great point that we often forget.

Ann Voss Peterson says, "Look at all the musicians who stopping making music once all the record stores closed."

She's kidding, of course. There is more music than ever. The delivery system may change. The delivery boy may change. The art remains.

Rob Gregory Browne said...

I've had conversations like this with Steve Zacharius on my Facebook page, and while I give him credit for the desire and willingness to engage, I sometimes wonder if he's actually listening to my answers.

But then part of the problem is that I've been unable to address his questions as thoroughly as you have, Joe. Great work.

Next time I'll simply refer him to this blog post.

Mike Fook said...

I wasn't polled either. I'm not even a writer and I've made nearly $100K from ebook sales in the past 4-5 years. Money I'd not have made without self publishing.

Great article. Loved this.

Cunningham said...

I also have to ask how many shorts or novellas that Kensington is selling lately. Kindle and ereaders in general have opened up the short story market for writers.

Robert said...

Unsurprisingly, I wasn't polled either. And I've made over $100k with my self-published books, have even had one of them hit a national bestseller list, and I would never -- NEVER -- pay more than even $1,000 for cover art (in fact, I don't think I've ever paid more than $600). I also have very little interest in going the traditional route, but hey, that's just me.

Ted Weinstein said...

Here's a simple spreadsheet allowing any author to calculate what they'll make with a traditional publisher versus self-publishing:

Steven Zacharius said...

Robert I've heard everything you've said and I'm listening intently and trying to learn more. I'm waiting to hear back and post my long winded reply to Joe because it's too long to fit as a comment.

Obviously in a sampling of writers, as with any sampling, only a handful of people are surveyed. In this case over 9000 people were surveyed supposedly, and that's a very large sampling. But I have not seen the complete survey.

Joe Konrath said...

In this case over 9000 people were surveyed supposedly, and that's a very large sampling.

It's large, but:

1. Consider the source. Lots of self-pubbed authors who read WD go the vanity route, and I've been against vanity publishing for a decade. It's a rip off.

2. 9000 authors may seem like a decent amount, but no one except Amazon knows how big this shadow industry is. I know there are tens of millions of ebooks that don't exist for any legacy poll or survey. 70,000 writers are on Smashwords, but no one on SW is in KDP Select (KDP Select is exclusive).

There could be well over a hundred thousand indie authors out there. And WD might have polled 9000 of the most unsuccessful.

Looking forward to your reply. Email it to me and I'll add it to the blog entry.

Jude Hardin said...

I'm waiting to hear back and post my long winded reply to Joe because it's too long to fit as a comment.

Looking forward to it, Steven. This is what we need, civil discourse among major players from both sides. And I think I can speak for many of the regulars here in saying that you've earned a great deal of respect just by showing up. Thank you.

Rob Gregory Browne said...

That's good to know, Steven. Again, I'll say it's nice to see a publisher who is willing to engage and ask questions and try to learn about what's going on out here in the wild.

Steven Zacharius said...

Thanks guys. Joe, I hope you got my reply that I posted. I didn't have your email address to mail it to you.


Steven Zacharius said...

Joe, I did find your email address on your website and emailed you my reply.

Paul Draker said...

For what it's worth, Steven, you've got my respect for engaging in two-way discussion with the self-publishing community, and taking some arrows gracefully.

As we talked about on PV, I really do think a smaller, more agile traditional publisher like Kensington can use the change to outmaneuver the Big-5 and grow at their expense by reinventing the contractual relationship with authors.

In this industry, size has now become a disadvantage.

Steven Zacharius said...

Cunningham, Kensington does e-shorts and e-novellas, but we generally use them as a way to promote the next full length book coming out from the author. It's not our primary focus, it's a marketing tool for us.

Jackie Barbosa said...

As Beverley Kendall pointed out over on Passive Voice, that survey included authors who had never published a book. Some of the respondents hadn't even started one! Only about a third of the respondents had actually self-published a book, if I remember correctly.

Given the data set, the results aren't surprising at all.

David L. Shutter said...

"I'll say it's nice to see a publisher who is willing to engage and ask questions and try to learn about what's going on out here in the wild."

Vehemently agrees.

Paul Draker said...

One other thought, Steve,

A lot of the comments on PV, and here, are from authors with some past traditional publishing history, who have made the move to indie. Or hybrid.

But there's also an emerging category of authors, one that doesn't even show up on traditional publishing's radar, who never even considered traditionally publishing or looked for agents or queried or whatever that old-school process was.

These newbie authors anticipated the shape of the future, assembled a pro team, and went straight indie.

Joe talks about print distribution being the best asset that traditional publishers have. I agree.

That's the only part of the traditional publishing industry that holds any interest for the new class of straight-indie authors.

It's something to think about. And figure out how to use to your advantage.

Shaun Horton said...

I have to agree; Mr. Zacharias, you've earned a lot of respect for being willing to look outside your corporate email account and converse with those on the other side of the fence.

I've done a bit of self-publishing, but thanks to Joe and his friends, I understand a lot about what traditional publishers have to offer and I am certainly interested in becoming a hybrid author at some point down the line if the contract is right.

Thanks to your open-mindedness, Kensington just found itself very high on my list of possibilities.

Suzan Harden said...

Steve, I've been reading your comments at TPV and here. Before you answer Joe, please read Hugh Howey's posts on changing Harper Collins. He has some excellent ideas.

Furthermore, you need to actually listen to writers' concerns. With indie-publishing, writers are learning exactly what overheads really cost and how to trim the fat to build a growing business.

Finally, I'm willing to give you the benefit of the doubt, but frankly the tone of your HuffPo piece was very insulting to indies. You've got an uphill battle already convincing this audience of Kensington's relevance. Please keep this in mind before responding to this piece or anyone else online.

Paul Draker said...

Author-Gerald said:

"Trad / legacy publishers just don't get it. They will. Eventually."

There is no "eventually" for traditional publishers. It's adapt now or die.

Either way, readers don't care.

They won't even notice.

I've seen the future of the book publishing industry play out already in the mobile gaming space, five years ago, when Apple opened up the iPhone App Store to self-publishing.

Until you've actually watched it happen, you won't believe how fast the wheels can come off for a media industry's incumbent gatekeepers -- no matter how large and powerful they are -- once a platform opens up to self-publishing.

Richard Stooker said...

Lawrence Bloch is self-publishing his latest novel.

James Patterson reportedly controls so much of the publishing process of his books, his "publisher" is already just a glorified print jobber and distributor.

I bet we'll start seeing some A listers self-publishing when their current traditional contracts are fulfilled.

Joe Konrath said...

Blog is updated with Steve's answers, and my responses.

Beverley Kendall said...

That Writer's Digest survey of 9210 "authors" is very misleading. Only 32% of those authors were actually "authors" in any real sense as I pointed out to Steven on The Passive Voice post.

That BIG number includes aspiring authors who a) have yet to START and FINISH a manuscript. I really hate that that number is being thrown around like that in terms of earnings because it leaves the wrong impression. I do understand WHY it's being used like that--to discourage authors from considering self-publication--which I think is just wrong.

I'm curious about the survey--I never took it--but I won't pay $295 for it.

William Ockham said...

A small statistical note for everyone in this conversation. When there is a discussion about income, professionals always talk about the median, not the mean. The median is simply the value (in any list of numbers) that is in the middle of the list. The reason is simple. The average (which is called the mean) income is distorted by outliers, mostly at the upper end. Changes in the median generally tell you a lot more than changes in the mean.

Suppose you were interested in the income levels of bridge players. When Warren Buffet taught Bill Gates to play, the average income of bridge players soared. Did bridge players suddenly get richer? Not really. The median income just went up ever so slightly. One college student learning to play would bring back down to where it was before.

Furthermore, we really should separate part-time and full-time earnings. Every good analysis of income does this. Also, I have never seen an income study that includes people who never made any money in the profession.

I really believe that we could improve the quality of our discussions if we applied the lessons learned over the last hundred years of understanding income distribution.

Alan Spade said...

One of your all-time best blog post, Joe. Kudos. As others have said, one of the thing which makes the value of this blog is to have directly the voice of Kensington's CEO and President.

Hearing about Kensington reminded me about this great post from September, 2010 on Joe's blog:

It tells the story of Henry Perez, who hit the #1 overall place in Kindle with his ebook at the time published by Kensington, Mourn the Living.

What I've found fascinating, especially in the comments of this blog post, is how Joe demonstrates how Kensington had to build on the success of Henry Perez' ebook and didn't. Epic fail.

What I thought when I did read this 2010 post is publishing is first a human business. Of course it doesn't legitimate the wrong doings. I thought that Henry Perez must haven't been the prefered author from Kensington, because they didn't build on his success. Like Hyperion didn't build on Joe's fantastic work between 2005 and 2008.

I made a litle enquiry, but I couldn't find any mention to Henry Perez on Kensington's catalogs from may-august-2010 (\MainFiles\Kensingtonmayaug2010.pdf ) nor september-december 2010 (\MainFiles\KensingtonSeptDec2010.pdf ).

So, I'm intrigued. Can Steven Zacharius say if Henry Perez was ever published by his house, because he seems to have vanished like a ghost?

antares said...

"9000 authors may seem like a decent amount"

9,000 is a statistically valid sample IF AND ONLY IF the members of the sample were randomly selected from the target population.

Sorry for the jargon, but precision is important.

From Beverly Kendall's comment I infer that the respondents self-selected. Thus, the sample is not random. Plus I'm guessing the respondents are all Writers' Digest subscribers. (FWIW I quit reading WD decades ago after I found them to be a fount of misinformation. Their misinformation caused me to waste months with agents who did not represent in the genres that WD said they did.)

So the sample may be corrupt. Is there anything we can learn from it anyway?

'Only 32% of those authors were actually "authors" in any real sense'
Lessee, 32% of 9210 is 2947.2. Ouch. Must hurt to be the 0.2 guy. That is still a large enough sample to yield great results: narrow intervals at a 95% confidence level.

The problem is that I need the raw data to distinguish the authors from the wannabees and run the numbers. Even then my conclusions will be limited.

Is the raw data available?

antares said...

As William Ockham said, the median is the meaningful average for income (or for any right-skewed population).

My conjectures:
1. For self-published writers, the median income is less than $1000 total.

2. For publishing-house writers, the median income is $0.00. 'Cause 99.5% of them never get published.

A personal note: My wife got excited about my writing when Amazon deposited money to my account from sales in France.

Angry_Games said...

I'm one of those authors that has never even bothered to submit to a traditional publisher. Thanks to people like Joe, Hugh, Amanda, etc., I've decided it would be against my best interests to go the traditional publishing route.

More importantly, every time someone from traditional publishing wants to have a 'conversation' such as the one Steve and Joe are having, the conversation always ends up the same:

Joe (or another self-pub) asking the right (and sometimes tough) questions that authors want to know the answers to. And the traditional publisher person... never actually answers the questions (it's sort of like reading a transcript of talking heads on cable news interviewing senators and such).

WHY should we choose Kensington, or any publisher? Why? I've still not read an answer that is satisfactory to me. Of course you can't match the 70% royalties that Amazon pays, but you could do like Wal-Mart and realize there's a ton of money to be made from volume.

So if you pay royalties in the 50-60% range, and you are only getting 10-20%, but your authors are selling hundreds of thousands of ebooks, which cost you very little overhead and zero distribution costs, then you are making a very good amount of money.

If a book is $9.99 and sells 5k copies, but another book is $.99 and sells 100k copies... isn't $100k in sales better than $50k in sales?

I completely disagree with the 'we shouldn't look at units sold' statement. We damn sure better be looking at units sold. Units sold to self-published authors is far more important than how much the publisher makes by charging $8.99.

As Joe has mentioned a thousand times here, self-pubs make more from a sale at $2.99 than traditionally published authors do at $9.99.

Steve, if you want to compete in this new world, you had better be able to figure out how to stop talking so much about what you USED to do, and stop riding on the fact that up until a few years ago, you (traditional publishers) were the only real option authors had.

Stop blaming Amazon. Start listening to authors. From what I can tell, you didn't listen to a single thing Joe replied with, and instead just kept talking a lot of circles and hot air niceties about your industry.

Readers don't care who the publisher is. I'm an author and I can't remember who the publisher is of any of my books other than I know I have a lot from Tor because they were huge in science fiction. Beyond that, Harper and Mac and Simon and all that...are just names.

Names that readers don't give a damn about. Readers care who the author is, and what the story between the covers is.

Again, stop talking and actually listen to what people have to say, or you're going to look back one day after you've lost the battle (and probably still blaming Amazon) and realize this is the point in time when you had the opportunity to do exactly what Amazon has done to capture the attention of consumers, and capture the attention of authors and give us a reason to begin thinking of you as something other than scammers, poor sports, and terrible listeners.

William Ockham said...


What if I told you that there was a way that you could increase your sales that wouldn't cost you any money and could get you some good press for your company? I should say that there are some risks to this strategy, but nothing in business comes without risks.

Here's what you should do: Get rid of your non-compete clause. At least with respect to self-published and ebook only releases. In fact, for some authors, you should encourage them to self-publish while they are under contract to you.

Here's why this is a good idea for Kensington. There are some authors who can write faster than you can publish. Our host is one of them. There are many others. The advent of online book buying has changed the forces that made the non-compete make sense for publishing companies.

In the olden days (as in the 20th century), limited shelf space meant that bookstores couldn't keep multiple books by the same author in stock, unless that author was something really special (Dr. Seuss is probably the best example). Amazon and B&, on the other hand, can very easily keep all the books ever in stock.

Having multiple books released by the same author is a good thing because every release raises the visibility of that author. Ask any of the successful self-publishers and they will tell you that each new release helps the sales of their other books. This is especially true for series.

The economics of series books for adults is one of the under-reported stories of the changes wrought by online bookselling. The smart play for a publisher like Kensington would be to make a contract (with a reasonably prolific writer) for the first two books in a series with an option for the print rights to subsequent books. The promotion that you do for the first two books will help the sales of the subsequent books, even if you don't exercise the print right options (which will make the writer happier with you). At the same time, as long as that writer continues to write the series, you'll be getting a free boost in sales for those first two books without doing a thing.

Another factor is that there are books that writers want to write that don't make economic sense for you to publish. As long as they are meeting their commitments to you (i.e. delivering their manuscripts on time), there is no downside to letting them self-publish. Have you seen any evidence that multiple releases from a single author hurts sales?

I'm not an author or a publisher. I'm an avid reader and software geek. I hope that you seriously consider this idea.

Daniel Kenney said...

Steve, After reading some of the discussion over at Passive Guy and reading your discussion with Joe, I just wanted to say thank you for really participating in this discussion and trying to learn more. I really appreciate that. I think a ton of authors that I know would be excited to do a print only deal with a company like Kensington. And I expect many of these authors would be particularly excited if there was no non-compete clause that affected the author's ability to also release self pubbed titles whenever that author wanted. Here's an honest question I have for you as the CEO of a prominent publishing company. Will Kensington be offering print only deals with contracts that don't have non competes? (and if not, why not?) If you are truly serious about convincing self pub authors to give Kensington a try, doing those two things would be a great start. The fact is, your paper distribution is your greatest asset from a self pubbed auhtor's perspective and I'm sure successful self pubbed authors would give Kensington a longer look with the ability to do a print only deal and have no non compete. Thanks Steve!

Christine said...

Great post, Joe and Barry and Steve.

It appears you've changed your mind about being interested in doing a print only deal, Steve.

Last October in the Writers In The Storm blog you said, "Of course I can only speak on behalf of Kensington, but we would not publish a new book without controlling the e-book rights as well as the print rights. As mentioned previously, 30% of our revenue is now coming from digital sales. Today the industry standard is 25% of net receipts and I don’t see that changing quickly."

Here's the link of the full interview:

Perhaps you could clarify your comment and tell us what's changed between October and today. As a best selling independent romance author, I'd be interested in talking about a print only deal. That would be a win-win for both of us.

Liana Mir said...

I'm pretty sure his 70/30 split is BECAUSE of the mass market. Mass market and ebooks are competitive as most books now do one or the other. I forget who analyzed it, but they said that ebooks have essentially replaced mass market.

(I still like the size though so will be including mass market in my personal indie list of formats.)

Steven Zacharius said...

Christine, you asked about my comments about doing a print only contract now. I was really talking about in JA Konrath's case where his sales are huge. There should be a demand for the print only component of the model. This would hold true for any author that is selling huge numbers of ebooks. The publisher has to be very careful though because after giving an advance to the author, if we're competing with the author's own ebook at a highly discounted price, the print books won't have the velocity that they should.

Liana Mir said...

Steve, have you looked at this survey:

It breaks down some actually useful data including the realities of a professional indie's income.

Paolo Amoroso said...

Hi from a reader who switched to ebooks three years ago and never looked back. Advocating the separation of traditionally published books from self-published ones is possibly the most patronizing idea I’ve heard in years. We readers can spot ourselves the books we like and don’t need that kind of protection, thank you very much.

David L. Shutter said...

" I think a ton of authors that I know would be excited to do a print only deal with a company like Kensington."

I would agree. Print only remains one of the major milestones that most indies aspire to and despite a smattering of outliers such deals remain rare. Why?

If the print market remains so robust, and so many readers still prefer print books as is often claimed, then why not tap into the pool of proven, successful indies (and there's far, far more than a handful) that would be exciting, new properties to the print only segment?

If publishers could adopt a partnership vs. an ownership attitude over writers and their work (or maybe a smaller, nimbler and forward thinking publisher who is willing to break away from the "how we've always done things" mentality) than they could establish themselves as indie-friendly print distributors. I think some hugely beneficial deals could be struck.

Here's an example some of you may know and some of you may not, something that's only being discussed in a few online indie circles that I can see: Brenna Aubrey recently turned down a 6 figure, 3 book NY Pub deal to Self Publish.,172987.0.html

Here's the kicker-she was a complete unknown and NOT a Howey or Andre already making huge indie bucks every month.

Simple fact that Joe, K. Rusch and others have discussed many times before is when "big" six figure advances are broken down over years and delivery vs. pub dates minus agent cut it often works out to a minimum wage income per year.

Brenna knew that from studying folks like Joe and other successful indies. And according to Brenna she's on her way to topping that first years advance payout after only her first month of SP.

"But..she's an outlier, a lottery winner, one of the lucky few..."

Yes, absolutely. She's garnered an unusual amount of attention from her story, which surely helps visibility, but what's being missed by the legacy side is that there's more stories like hers every day. Before you know it there won't be only 4 or 5 mega successful indies, the kind making over a million a year.

There will be a hundred.

And then more.

How many future bestsellers will still covet being spine out a bookshelf then? How much longer will B&N or BAM even be with us? When every book is a thumbnail on Amazon or another online seller (hopefully not...but probably) what can a legacy publisher really do for a writer?

Now, Brenna hasn't sold a million or even a hundred thousand e-books, yet, but the initial response to her work has been pretty remarkable. She could very well be a future Belle Andre or H.M. Ward.

Why would any publisher NOT want to get in on the ground floor of the Brenna Aubrey print-only

Thanks again to Steve for joining in the discussion.

Steven Zacharius said...

I have emailed my reply to Joe and he has to post it because once again I was too long winded for it to fit into the 4000 or so characters you're allowed for the comment window. Thank you for allowing me to continue with your dialog.

Steven Zacharius said...

I'd like to add one more thing that I just emailed one of your readers here in a response to their personal email to me. I think there is room for indie, hybrid and traditional publishing to all co-exist. It shouldn't be one against the other. We're all trying to do the best we can and each us of is trying to make money....and hopefully share some wonderful storytelling along the way.

Now Joe, if I were going to buy one of your books, which one would you recommend? What's your favorite...I am a thriller reader.

w. adam mandelbaum esq. said...

$6K a cover? I do mine for free with amazon's cover creator. If anybody wants to compare my legacy published book cover with the ones I have done--you'll see there isn't that much difference in quality--on at least some of my self-designed covers. to check it out, put "w. adam mandelbaum" in kindle. The legacy book was St. Martins' Psychic Battlefield. The point is, with a little practice, with public domain art and with amazon's cover creator, you can DIY for nothing. take that legacy!

Jude Hardin said...

The publisher has to be very careful though because after giving an advance to the author, if we're competing with the author's own ebook at a highly discounted price, the print books won't have the velocity that they should.

Aren't we talking about two different demographics, though? Generally speaking, aren't the readers who buy $8.99 paperbacks at the supermarket in a different group than those who buy $2.99 ebooks?

That's why the windowing of ebook releases never made any sense to me. People who buy ebooks have already switched to that format, primarily, so they're not going to go out and buy the paperback just because the ebook isn't available. They'll just buy an ebook that is available, probably by another author.

So I really don't see that ebooks by Jude Hardin are competing with print books by Jude Hardin in the current marketplace. Diehard print fans are going to buy paper, and ebook fans are going to buy digital.

I would also be interested in a print-only deal, btw. My self-published ebook sales aren't anywhere near what Joe's are (yet), but between them and my Thomas and Mercer titles I'm earning a living.

Jane Dystel is my agent, same as Joe.

David L. Shutter said...

"$6K a cover"

I for one would like to learn the titles of this $6K cover.

Now, we all know there are fabulous, affordable indie covers out there to be had in the low hundreds. Pre-mades, which can look just as good, can be had for $50 or even less. Even custom digitally illustrated covers (vs. a stock photo + manip type) can come in at $500 or a little less.

But Steve's not going to spend days scrounging the indie writer and designer boards for the best possible deal from a talented amateur or student artist. His design department is calling an established pro they know and will gladly pay a premium for proven, reliable and timely service. Big business. Got it.

But $6K still has me speechless.

While shopping for sci-fi illustrators I spent a lot of time on Deviantart and was surprised to see professionals of all flavors posting their work and hanging out there. It's like FB for artists. I recommend it for anyone who's never visited.

I saw large numbers of pros who've done conceptual work for big-budget Hollywood films, covers for major video game releases, designers for major games themselves and on and on. Having no clue, I queried a large number of these folks with a cover design proposal.

Highest quote I ever got was $2k.

I'm not being snarky to Steve but I'm at a complete loss as to what the $6k was spent on.

Anonymous said...

"...Kensington does e-shorts and e-novellas, but we generally use them as a way to promote the next full length book coming out from the author. It's not our primary focus, it's a marketing tool for us."

Novellas might be something that should be looked at a little more closely and I believe they deserve better billing than a "marketing tool."

I'm (primarily) a novella author with books typically priced at $2.99-$4.99. I do not run $0.99 sales. My last novella was priced at $2.99 and sold just shy of 20k copies in the first two months. This was the third book in a trilogy and was only 25k words.

The print arm of Kensington wouldn't have looked at me or this book twice as a potential acquisition, regardless of my sales. And if you did take a peek at me as an author, you'd want a novel. You wouldn't even consider signing a deal for three novellas to be bundled to print. This seems to be the mind-set of traditional publishers and agents. I had an agent contact me who believed he could sell my next book to a traditional publisher... if it was a novel. (Others may have had different experiences, but this is what I faced very recently.)

I understand that there is e-Kensington and Lyrical for ebooks, but that's not something I'd ever consider. I can publish ebooks myself, I've proven that. But if I want to get into print, I can only do so with a novel. Writing a novel is easier said than done when it comes to someone who has spent seven years writing novellas.

It might behoove you to see how print can be efficiently coupled with your electronic novella business. Instead of treating it as a marketing tool, treat it as a necessary component in your process.

Before you brush off the idea entirely, take a look at Sara Fawkes' Anything He Wants serial. She wrote 5 installments with the first at $.99 and the rest at $2.99 a piece. They were then bundled into one ebook volume *and* a print volume. St. Marten's turned five titles into seven. These weren't intermediary books to prep for a novel, they were the total package.

Novellas can work, you just have to make them work for you.

Jackie Barbosa said...

Steve: It’s very hard to become a major author by self-publishing…sure you can make money and some of you obviously make a good living. But you’re leaving out 70% of the market by not being in print and POD just doesn’t cut it….it’s not the same thing as being in WalMart or Target or B&N.

Not, it's not the same, but being in B&N isn't the same as being in WalMart or Target, either.

I'd love to know, of the 450 print books Kensington publishes each year, how many actually make it into Walmart and/or Target. Because I can tell you my Kensington book, with it's whopping print run of less than 4,000 copies, didn't even make it into most B&N's and Borders, let alone into Walmart or Target.

Steven Zacharius said...

Jackie Barbosa, once again we are giving misinformation out to the world. What you said is not correct at all. First of all you had almost double the number copies you mentioned distributed in print. And as a matter of fact, you did have 2000 in B&N and over 1500 in Borders. Perhaps you are referring to your NET sales being around 4000. We can put the books out there but we can't force people to buy them. There were also some ebook sales as well. Your book was not in WalMart or Target which means THEY chose not to carry it...
Of the 450 books we publish, the overwhelming majority of the mass market titles will go into WalMart and many will go into Target as well. The titles in trade that these accounts take are more selective though. I should add that WalMart is one of the top one or two retailers of books.
Please make sure your information is correct before disseminating to the world. That doesn't help anybody.

Steven Zacharius said...

One more additional comment....although an author might perform extremely well in ebook, doesn't mean that it will carry over to print. As I mentioned in my original blog that there were indie authors who were paid large sums of money for traditional contracts after the success of the ebooks. The verdict is out on how they will perform in the end. But I just looked up the Bookscan sales of some of the biggest authors that were given a print component by a major publisher and the sales were good but certainly not phenomenal.

Jude there have been studies that show that there is a very large percentage of people that read ebooks who also read print books. They are not mutually exclusive. I for one am in that category.

As far as the artwork that I mentioned was very expensive, if you go back to the hey day of romances, paintings by the world famous Pino, who passed away a few years ago, sold cover art for one time use for a minimum of $6000. There are others as well. His original oil paintings now go for over $40,000. However the print runs on the books where we used these could have been several hundred thousand copies or more. So it's all relative.

Liana Mir said...

Ah, yes. Paintings do cost more. I used to seriously want painted covers. Now, I'm happy with graphics due to the cost difference.

Joe Konrath said...

I just updated this blog a second time with more replies from Steve.

Thanks, Steve, for your time and efforts here. My readers appreciate it, as do I.

Jackie Barbosa said...


I don't know what you think I said that is "misinformation." My initial print run was just shy of 4,000 copies. (Sorry, I can't be bothered to go dig out a royalty statement to get the actual number.) It was certainly in a fair number of Borders and B&N stores at that time, but not all of them.

I understand perfectly well how print distribution works and that not all books are ordered by all retailers or even by all storefronts by a retail chain. But that's the point. You're telling writers they'd be better off with print distribution because their books can't reach readers in Target and Walmart and B&N. But that's not really the whole truth. The whole truth is that signing a contract that includes print distribution doesn't guarantee you're going to reach readers in those places, either. Your ability to reach those readers is entirely dependent on your publisher's ability to convince retailers to order lots of copies your book and also on its willingness to pay for things like coop placement. If your publisher doesn't do either one of those, your print distribution doesn't mean much in terms of "reaching the market."

I just wrote a post on my blog about what I call "The Whim Factor" ( That factor is what drives books onto bestseller lists like the USA Today Top 100 for 2013. If you're an author of that kind of book--one of the ones that will be heavily marketed to retailers and provided with coop space--then yeah, print distribution means a LOT to your bottom line. For the rest of us, though, it's not all that it's cracked up to be. Most authors I know in traditional publishing houses, even those who are hitting the weekly NYT and/or USA Today lists, report that their print runs are shrinking. It's why some authors are having the print runs eliminated altogether, despite contracts that envisioned print distribution.

This is the new reality. Most authors, traditionally or print published, are not going to make a lot of money. As I said elsewhere, my book published by your company has earned me <$5,000 since 2008. I guess that's my book's fault--people won't buy it because it's not good enough?--rather than the fact that it's overpriced and received no visible marketing support from Kensington (hey, I don't blame you for this, honestly; it was niche book and came out at the height of the recession! The odds were stacked against it from the get-go.). On the other hand, I've earned over $30,000 from a novella I published in December of 2011 that has ranged in price from $2.99-0.99. WIthout print distribution. Without marketing support from a major publishing house. With a low price point.

I'm not sure what else to say here, but I'm certainly not disseminating misinformation. I said my books weren't in MOST B&Ns and Borders, not that they weren't in ANY. I don't know how many store fronts there were between those two stores at the time my book released, but I know with certainty (based on stores I visited and emails from friends) that while some stores had 3-4 copies of my book, some had 1-2, others had none. I guess the accuracy of my statement depends on your definition of MOST. I'd say most means 90%. Was my book carried by 90% of those stores. It's true, I can't say with certainty. But it wasn't carried by 90% of the stores in my immediate area (it was more like 75%), so based on my own observational data, I don't think I'm wrong.

Alan Spade said...

Thank you, Jackie, for your testimony. I'm wondering for one Kensington author who has the gut to speak here, how many do stay in the shadow, approving each of her words...

(A side note: The Passive Voice links each of its blog posts to the original ones)

Jackie Barbosa said...

(A side note: The Passive Voice links each of its blog posts to the original ones)

Yes. But it would be better to simply link the post and not cherry-pick its contents, which sometimes leads to misinterpretation of the OP's point. The latter is my objection.

Alan Spade said...

I do agree. The cherry-picking is always very subjective, and often cannot convey all the meaning of the original post.

PV remains a very useful blog, though.

Liana Mir said...

Let's look at a case study about how book competition actually works:

Hugh Howey with two releases in a single week:

His "competitor" Michael Bunker:

The big issue I have with the idea of non-compete clauses is that there is no counter case study. Trad authors who can get their publishers to be smart release something in the same genre or shorts in the same series around the same time and it boosts sales for ALL similar titles of the author's.

Liana Mir said...

I think PV does his best to capture the best snippets before sending folks off to the original post. Sometimes, it's not really easy to find a snippet that CAN'T be taken out of context.

Dean said...


I've been following the comments here and over on The Passive Voice with interest.

I know that you've clarified that you haven't examined the underlying data from the Writer's Digest survey, so I don't mean to beat a dead horse, but given the frequency with which people outside of indie publishing state that most indie publishers don't make much, if any, money, I think there is another point that needs raised.

Any time that someone from traditional publishing moves over to indie publishing (like Joe) they are discounted as outliers. That means that in addition to comparing all indies against only published authors (ignoring the slush pile effect), critics of indie publishing are also for the most part comparing authors from indie publishing who have only been publishing for a short time (months or years) against 'traditionally' published authors many of which have been publishing and building a fan base for much longer (sometimes decades).

As many lower profile indie authors continue to release new books and grow their fan base, I think we are going to see dramatic increase in the number of 'outlier' who suddenly start hitting bestseller lists at the various retailers.

I remain convinced that most people who aren't indie publishing are underestimating the amount of money being made by indie authors. I think the next few years are going to be telling as indie authors individually build up a significant body of work.

I know that there is a limited amount of 'hard' data out there at this point, but I think that quoting the Writer's Digest as many in traditional publishing are doing right now is contributing to the amount of disinformation out there. That is likely why you get such a strong response here and at TPV for mentioning that particular survey.

Joe Konrath said...

I'm going to repost Barry's reply to Gottlieb as its own blog entry, because I believe it deserves to be.

Barry and I were just on the phone, and we found it telling that two high profile industry pros--Robert Gottlieb, Chairman of Trident Media, and Steve Zacharius, CEO and President of Kensington, have chosen to engage.

Barry and I have been asking for public discourse with industry folks for four years. We've posted data, posed questions, supported our positions thoughtfully and logically, with evidence, and yet no one vested in the legacy world ever responds, even though we're certain we're being heard.

Are we finally at that tipping point where the shadow industry of self-publishing cannot be ignored, and professionals are seeking to learn? Or are these professionals using public forums as a way to recruit potential authors, hone their arguments, and reinforce their currently held beliefs?

Whatever the case, I find it refreshing to have an actual conversation, rather than simply fisking something posted without every getting a reply.

I hope this trend continues. And I hope it stays civil.

G. M. Frazier said...

Joe, what has changed about Amazon publishing contracts that make them more "legacy like"?

Virginia Carmichael Munoz said...
This comment has been removed by the author.
TB said...


Thank you for coming here. You are a gentleman and deserve to have your views fairly listened to.

(I'm talking now about being an E-book only Kensington author...)

Please consider this: if I'm an Indie author selling under what you would consider worth putting into print, but enough that I make a good ROI on my own work, there is no reason for me to even submit to you based on a 25% net royalty on ebooks.

I would bet that there are many of us who could sell far more books, and make Kensington a great deal of money for very little upfront cost, if instead of an advance for ebook only authors you paid a fair royalty of say, 60%, and used the power you have as a large publisher to get our books in front of eyeballs on Amazon. I would be more than happy to trade a % of the KDP royalty in exchange for discoverability. But not with a non-compete clause and a 25% royalty.

And as for the non-compete clause: if I was e-book only, and I was given the power to release my work through you at my pace--not yours--than a non-compete clause makes a bit more sense. But not if I'm locked into one ebook a year. See?

Just something to consider. There are many of us who are successful in our own eyes who could greatly benefit from those special promotions you could run through Amazon. Enough of us that could greatly increase your bottom line.

Thanks for listening.

Joe Konrath said...

BTW, I call ownership on describing self-pubbing as a "shadow industry."

It exists, and makes tens of millions of dollars annually (if not much more), and no one knows anything about its size except for Amazon, who isn't spilling the beans.

I find it fascinating that Bookscan--which most publishers subscribe to--was originally rebuffed by publishers. They wanted to keep their sales number secret.

Now publishers rely on Bookscan, even it is clearly not counting a giant percentage of sales. Yet publishers will cite it, and other surveys that don't include indies, as proof of growth or stagnation or sales.

The publishing industry hasn't fully realized that they can't see the whole picture. They can't even imagine the whole picture. The shadow industry of self-pubbing involves thousands of authors who are no doubt doing well but don't appear on anyone's radar.

Legacy needs to worry less about looking at self-pubbed successes as a resource to mine, and more about what is going to happen when those self-pubbers refuse to be mined because there is nothing legacy can offer them.

What professional would leave their job and take another for fewer benefits and less pay?

Jude Hardin said...

Jude there have been studies that show that there is a very large percentage of people that read ebooks who also read print books. They are not mutually exclusive. I for one am in that category.

Got links?

I would guess that almost 100% of e-reader owners still read print occasionally, but I wonder what percentage of them would make a special trip to the bookstore when a title they're interested in is available in print only.

My guess on that is almost 0%.

Which means that windowing (or any other situation where it might seem as though ebook sales could undermine print sales) backfires most of the time. In other words, instead of gaining a print sale, you're losing an ebook sale.

Virginia Carmichael Munoz said...

(going to post this again, with a bit more info.)

I'm the twitter lady who smeared herself with meat to attract a bear and decided she was a bear whisperer. (I still think I am.)

I was an unhappy trade pubber. Became a super-thrilled self publisher, and did what I said I'd never do- enter into another traditional contract with a traditional publisher. Simon&Schuster bought my self published series Austen Takes the South and it's been fun!

I can say fun, because I focused on the advance, and not on any marketing promises, cover prettiness, or whether they would give me bookmarks to match my new covers.

It's exciting to know the paper books will be available everywhere, not just from Amazon POD. My paper versions were never very clean and even though I hired a paper copy formatter (at several hundred a book) they still weren't as professional as they should have been. I love paper books so that was always a thorn in my side. But I always loved my income, so I wasn't interested in doing anything to my ebook rights.

When Beth Adams approached me about selling the rights to the series, we both asked a lot of questions. The big one? WHY. Why would we enter into this contract? What could she bring to the table and what could I bring? Selling only paper rights wasn't an option (I'm not dumb, I did try) so I had to weigh whether what she offered as a traditional publisher was worth the cut in my income.
And it was. What I needed, they could provide. (Paper is coming June, July, and Fall 2014)

(Being honest here: I've never been someone who is very good and nodding and smiling. So, knowing that there were people on the other end of this who weren't total douchecanoes just MIGHT have been the biggest point in their favor. :)

So, it's been fun so far, it's also a painful moment when you can't fix a simply typo in an ebook blurb, they've forgotten the genre listings, and you have to pay for your give away books because you can't just set it for free.

Painful, but not so annoying I regret it. The team at Howard Books is forward-thinking, responsive, friendly, staffed with the kind of editors an author can only dream of finding in the self publishing world.

Awesome interview. It took me 3 cups of coffee to read the whole thing. Absolutely worth my time.

Joe Konrath said...

Joe, what has changed about Amazon publishing contracts that make them more "legacy like"?

My original contract for Shaken was two pages long.

Amazon's legal department has been slipping in more and more legacy language and terms in recent contracts.

Myself, and others, have been arguing with Amazon legal about this.

I can't be more specific. I'm fortunate to be invited into beta programs, and I agree to confidentiality in doing so.

I can say that issues were resolved to my satisfaction, and I signed the deals.

But the trend concerns me.

I'm a huge Amazon cheerleadr, and have been since first publishing on DTP (back when it was called DTP). I have no doubts I'm directly or indirectly responsible for lots of authors publishing via KDP and A-Pub.

But if Amazon is doing things I disagree with, I'm vocal about it. I let them know, and in some cases I blog about it (such as when they removed reviews).

They're the best publisher I've ever had, but they aren't perfect.

Happily, they listen to their authors, and take our concerns seriously.

Liana Mir said...

@Jude Hardin

There are some readers who read certain kinds of stories best on different media. I've been reading digitally for years, since I was a kid and had no book budget. There were web magazines with free fiction, fanfiction, and original fiction awash on the web in my home communities. (I'm pretty loyal to that community still.)

But guess what? I love books, print ones, when I'm hanging out in my room, when I want to curl up in bed without banging my face with my tablet, and for certain stories that are just plain hard to get into online but that I can dive into in print. And especially if I'm flipping back and forth or want to write up comments while referring to it. This is easy on a desktop but a nightmare on my tablet.

I just bought several entire series on my tablet, but promptly turned around and bought a mass market paperback at the store and am trying to figure out how to get my hands on the Divergent trilogy in paperback instead of hardcover. (I'm a paperback, preferably mass market all the way kinda girl AND ebook.)

I have regularly divided my book budget almost 50/50 between print and digital for the last five years. I don't see that changing soon.

But of course, I won't make a special store trip for a paperback; I go online to Amazon.

Liana Mir said...

Forgot to mention: I own every single available title from Veronica Roth in ebook already. I ALSO want the trilogy and then the Four omnibus in paperback. I wish trad pub would just bundle the formats for a super-deal. I'd buy those bundles.

Joe Konrath said...

Thanks for chiming in, Virginia.

I hesitate to discuss this with you, because it comes down to closing the barn door after the cow got out. It would be pointless to comment about a choice you already made.

I will say that I've personally spoken with over a dozen authors who were offered legacy deals. They'll email me for advice, I'll give them my phone number, and I'll answer questions and talk about what it was like to be a legacy author for a decade.

I wish you nothing but success on this venture, and hope Howard books sells a gazillion copies and you continue to be treated well. I do know many authors who are very happy in the legacy system and have had terrific success.

This isn't us vs. them. It isn't an ideology. All authors need to figure out what they want, and make informed decisions. Sounds like you did. Congrats. :)

Virginia Carmichael Munoz said...

Oh, don't worry about hurting my feelings. I just read the whole article.

Even more, I came from legacy publishing, so it wasn't as if I didn't know what was happening.

I just wanted to offer the input of someone who weighed her choice, and chose differently than most would here. I still have three self published books doing well and two more slated for the new year.

But my main point is that there is money (yes, I care about money), there is fame (don't have it, but it would be nice), and there is the joy of a polished product. I did hire professionals in the self publishing community and it was a pain in the patootie to find anyone who hadn't just hung up their shingle as a freelancer.

I was and am fully aware that I'm going to lose money, but there are times when money isn't the biggest incentive.

Of course, I can only say that because I'm living off the royalties from my Amazon Kindle books. said...

Thank you so much for posting this exchange, Joe, and for the updates. Extremely helpful and informative as always, especially for a fledgling self-pubbing author such as myself.

Jude Hardin said...

Very interesting, Liana!

I would love for you to try one of my books. If my new thriller (iSEAL) sounds like something you might be interested in, shoot me an email and I'll send you a free digital copy.

Joe Konrath said...

I'd love to know who your previous publisher was, Virginia. You're the first author I know who wnet back to legacy.

I'm very curious what brought you back. A big payday? Wanting to see your book in bookstores? Having a publisher do the heavy lifting? Getting into libraries? The flattery and attention of industry pros? An alternative revenue stream?

Your new covers are gorgeous. Releasing the ebook before the print version is smart. And your Amazon rankings are... well... normal for legacy rankings.

Fame actually isn't as nice as it is cracked up to be. I've had a bit, and it's exhausting. I don't go to conferences anymore, because I get rushed by newbies with questions. But then I'm probably odd, because I usually get surrounded by writers, not fans.

If you ever want to blog about why you went back to legacy, my blog is yours. I'm sure I'm not the only curious one. And I'd run it intact, without me interrupting every sentence as to why I think you're insane. :)

Liana Mir said...

I don't care for thrillers as a genre, but I do like SFF that skirts the line, so I'd be willing to give it a whirl. I don't have your email, but mine is info at liana mir dot com.

Sorry, Joe, for the slight OT.

Alan Tucker said...

The term "shadow industry" is a good one, Joe. It works on many levels.

I did a guest post on this blog (thank you, Joe) last summer titled "How to Become a Successful Writer" ( ) in which I mentioned the lunch money I make selling books. I work two other jobs in addition to my writing and hope that some day the writing will eclipse the need for those other forms of income.

I'm not holding my breath.

Nevertheless, I write because it brings me pleasure and because of e-publishing, primarily through Amazon, I've been able to give pleasure to others through my writing and earn some pocket change in return. This discussion got me to thinking, so I looked up some of my own numbers.

In getting ready to report numbers to my accountant, I can say that I earned roughly $2,000 last year through the sale of books. The vast majority of that was through Amazon with a listing of 5 titles (The first in my fantasy series is free and I had an omnibus edition which I have since unpublished. 3 books were listed at 3.99 and the 3 in 1 was listed at 6.99) Looking at my Amazon author ranking, I averaged between 100,000 and 125,000 through the course of the year.

At $2000, I'm doing approximately twice as well as the average of the poll, yet there are at least 100,000 other authors who are doing better than I am according to Amazon's rankings.

I'd say that's a large shadow.

Virginia Carmichael Munoz said...
This comment has been removed by the author.
Alan Spade said...

Virginia talked about quality, fame and prestige regarding her decision to be published again by legacy.

I'd advise to keep an eye to the "finished product" and not only to the cover when the books are released: I've heared legacy books where more and more subject to typos and grammatical errors these days.

One of the things trad pub was best for was bringing stars in author's eyes and make them dream. Yes, I'm talking about fame and celebrity.

They have not lost that "lottery power". Yet.

Prestige has always had to be paid cash in trad pub, but I guess the price will continue to grow and grow.

I wish you luck, though, Virginia, and if the advance is big, it's all the better.

Courtney Milan said...

Steven, I'm one of the successful self-published authors that sold more than 100,000 ebooks in 2013. I don't have exact 2013 numbers yet--I'm still missing a few reports from the smaller vendors for the latter part of the year. But in 2013, I sold 254,896 copies for a total of $377,266.39 in revenue.

I'm open to the idea of working with a traditional publisher in theory, but the more I learn, the less likely it seems to me that anything other than a print-only deal will ever make sense.

It's not just the royalty difference, as Joe explains, or the difference in price point. It's because I haven't seen evidence yet that any major publisher understands digital publishing as well as I (or Joe, or any number of other self-published authors) do.

The thing I think you don't understand when you dismiss all self-published authors with average earnings statements is this. Self-published authors are like bacteria--we're everywhere, and most of us are easy to shrug off. But we're also labs of innovation. We swap ideas like genetic code. One bacterium comes up with a dominant idea and the next thing you know, it feels like all the bacteria are doing it, testing it, evolving in response. And the next thing you know, the antibiotics you came up with after four years in the lab stop working after two years.

That's the job you publishers have right now on the digital front. You have to keep up with the bacteria, and we're thinking and moving and trying new things much faster than you are. Yes, lots of us don't do well--but there's a lot to learn from the ones who do, and you ignore them at your peril.

I have yet to see publishers doing the kind of innovative, data-driven market testing on back matter that self-published authors have done.

Let me give you an example.

When I pull up a Kindle copy of Fern Michaels's BLINDSIDED, a Kensington book released three weeks ago, I see that you're still putting the list of "other books by this author" at the front of your book, and nothing at the end of the book.

n a Kindle, the book opens automatically to Chapter One. That means readers will NEVER see that list of books about the author. Joe posted this on his blog at least as early as 2010, but you still haven't figured it out.

I've done testing to know that when I put links BEFORE Chapter One of a book, I get zero clicks. Not just a small number. Zero. When I put that same link at the back of a book, I start getting clicks. That tells me readers are not seeing front matter. Why are you still doing it in ebooks?

The kind of links I put, and how I phrase them, determines how many clicks I get. I've done A/B testing to optimize my back matter, and I guarantee you that doing that has more than doubled the sales I've been able to make.

You put out 450 titles a year and take in, by your accounts, millions and millions of dollars. I'm one person with a two-hour-a-month zero-dollar data-manipulation budget. I've tested this. Why haven't you?

If you took any one of the top 100 self-published authors and handed them your digital catalog, I'd bet any one of them could double or triple your digital revenue.

Virginia Carmichael Munoz said...

No, Alan. I talked about money, product, partnership, and distribution.

Trish said...

$6000 dollars for a cover?
I paid $50 for the stock photo my cover artist used on my debut romantic thriller in 2011. Total cost of the cover was $125

Several months later Kensington released a romantic suspense with the exact same stock photo, and a very similar cover.

The stock photo used on Joan Swan's Fever (a Kensington release) has been used on multiple other books--both traditional and self-published.

In fact, I see a lot of the same stock cover models that the romance self-publishers are using being used on Kensington romance covers.

Many of the cover artists that self-publishers are using, are also working for the traditional houses. Yet the average price of an Indie cover W/stock photo is between $150-250 dollars.

Why are you guys paying $6,000 for the same covers we are paying $250 for? From what I see, it isn't for the stock photo. We are using many of the same cover artist. The quality honestly isn't any different.

Case in point- when I sold my debut self-published title to Montlake Romance (Amazon Publishing) they commissioned my original cover artist to do an exact duplicate of my original cover, along with the covers for the remaining books in the series. The only thing that changed was their branding.

Anthea Lawson said...

Courtney said it perfectly. The savvy indie authors (and there are a lot of us, with more getting smarter every year) can do a *much* better job managing our digital careers.

My last royalty statement on the title Kensington published in 2008 was $10. From Jan-June of 2013, Kensington managed to bring in about $100 on my backlist book.

I have asked for the rights back early on this book, and been denied. I will be granted reversion in late 2015. And it's *killing* me.

Over the next 2 years, I will make another $40 in royalties from Kensington on that title (if I'm lucky).

If I had the rights back, I could easily make ten times that amount. EASILY. With a little work, I could make a hundred times that amount. Or more.

My most recent indie historical romance made over $3k in two months. If I controlled the rights to my backlist, I could take advantage of all kinds of promotion - sales and advertising, bundling, actually branding that title (my two books from Kensington look NOTHING like each other, for example).

I'm not the only trad-gone-indie author who is gnashing their teeth over not being able to get their rights back yet. The opportunity cost is in the thousands of dollars for every year we have to wait and see those measly checks as the traditional publishers sit on backlist they have no idea how to sell.

Jackie Barbosa said...

My last royalty statement on the title Kensington published in 2008 was $10. From Jan-June of 2013, Kensington managed to bring in about $100 on my backlist book.

Jeeze, Anthea, I thought my $893 in royalties from my June 2009 Kensington release were meager! Now I feel bad for complaining. I guess they're doing a bang-up job with my book after all.

Joe Konrath said...

I updated it again with more replies from Steve, and my responses.

Longest blog post ever? I dunno. Gotta be close. But some good info here.

Elaine Levine said...

Well, Jackie and Anthea—you both out earned me! In my latest royalty statement, I earned $678 on my 2009 and 2010 books together (both of which were in the Zebra debut program). The next 2 books I had with Zebra, released in 2010 and 2011, I received a payment from my agent in the amount of $2619.

My 1st 2 ebooks consistently rank better than my last 2 ebooks on Amazon, and yet the sales numbers reported to me are always worse for the 1st 2 books than the last 2 books, which is a mystery to me.

I accepted very poor terms in my two contracts with Kensington. I only receive 6% royalties on print and 10% royalties on list price of ebooks for the 1st book, then 8% and 10%, respectively. In my second contract, that improved slightly—I receive 8% royalties on print and 15% on ebooks.

Any way you look at it, $3400 twice a year is not a living wage. I made more in the 18 months my first indie book was $0.99 than I have over 4 books and 5 years combined on my Kensington books. With only 3 indie titles in the last 2 years, I’ve been able to leave my day job and support my family with my writing income—as our sole provider.

I won’t get my rights back to those books before 2017-2021 (if I’m lucky and actually can the rights back). I did have a good experience at Kensington. I loved my editors. Out of 4 books, I only had 1 with any amount of edits (which isn’t to say they wouldn’t have been improved with more editing). Any problems I encountered along the way were quickly and professionally addressed.

And still I kick myself all the time for making a decision that I can’t reverse. I wish I’d known then what I know now. But I didn’t, and I will just have to deal the results of my decisions. As Steve has said, I didn’t have to take either of the contracts I was offered.

Joe Konrath said...

I treated the advance as if it was the only thing I'd ever earn from this series again

Kudos for you. I've said that if anyone takes a legacy contract, they should take the money and figure they'll never earn more or get the books back.

Have you perchance been reading my blog?

I mentioned you in Steve's latest response (added to the blog entry) and it makes a lot more sense to me why you went with Howard.

You aren't a bear whisperer. You're just human. And it's nice to see you're being treated right, finally.

Anytime you want to blog, email me. Maybe to coincide with a print launch...

Joe Konrath said...

At $2000, I'm doing approximately twice as well as the average of the poll, yet there are at least 100,000 other authors who are doing better than I am according to Amazon's rankings.

Nothing to add. I just thought this was very much worth repeating.

Thanks for the info, Alan.

Veronica - Eloheim said...

I thought Alan's point was really important and I'm glad you highlighted it Joe.

I've been following your blog for years. This post is so great. Thank you for all you do to help.

I've gotten so much out of this conversation.

Virginia Carmichael Munoz said...


Oh, did that sound familiar? :D Lifted right from these pages and applied to my career.

I think your blog was the first place I ever went to actually learn about self publishing. And still do.

The self publishing loop on yahoo is the second.

Joe Konrath said...

Self-published authors are like bacteria

Best. Analogy. Ever.

Especially when taken to the extreme. Bacteria not only adapt and spread, but they can kill. In this case, an entire industry.

If you took any one of the top 100 self-published authors and handed them your digital catalog, I'd bet any one of them could double or triple your digital revenue.

Agree 100%. If Steve hires you, say you'll do it for half the additional income you generate. I suspect it would be substantial.

Brett Battles said...

So, 40% of net (not gross, net). Assuming (and I don't know this for sure) net to the publisher is 70% like it is to self-pub (less if price is above 9.99), that means the pub gets .70 out of 1.00, and 40% of that is .28.

So that means compared to the 70% a self pub author receives per title, what Lyrical Press authors would receive 28%.

Books at:
9.99 author profit is 6.99 vs. 2.80 diff 4.19
5.99 author profit is 4.19 vs. 1.68 diff 2.51
4.99 author profit is 3.43 vs. 1.39 diff 2.04
3.99 author profit is 2.79 vs. 1.12 diff 1.67
2.99 author profit is 2.09 vs. .84 diff 1.25

Kensington authors, at 25% of net, would receive in comparable numbers 17.5% compared to the self-pub 70% rate.

Please correct me if I'm wrong. Seriously.

Not making a judgment one way or the other, but I just want to make sure we are all looking at this the same way.

Joe Konrath said...

Assuming (and I don't know this for sure) net to the publisher is 70% like it is to self-pub (less if price is above 9.99), that means the pub gets .70 out of 1.00, and 40% of that is .28.

Brett, that's the old Agency model. Kensington gets 50% of digital list, and 40% of that goes to the author (for their e-only lines, 25% for the ebook versions of their print lines).

So for a digital list price (these are listed on a lot of Amazon titles) $4.99, a Kensington author earns $0.63 (25% royalty rate off $2.50). Whereas a self-pubbed author earns $3.50 on a $4.99 ebook.

Jackie Barbosa said...

It's actually worse than you think. Publishers sell at wholesale, which is 50% of the LIST price. (Unless they're doing a promotional discount, in which case, I guess its 50% of the promotional price.) So on a digital book with a list price of $4.99, the publisher's "net" is $2.50, which makes the author's 63 cents. As opposed to $3.50 if he/she self-published.

A traditional publisher has to sell almost 6 times as many copies of the digital book as I do to earn me the same amount of money at the same price. And if I'm happy making 63 cents a unit, I can drop my price to somewhere in the neighborhood of $1.99 and possibly sell even more units.

Jackie Barbosa said...



Joe Konrath said...

Now, in fairness, Lyrical offers 40%. So instead or $0.63 on a $4.99 list, the author would get $1.00.

Jackie Barbosa said...

Right now Salem's Lot is #17 in Top 100 Horror on Amazon. King wrote it in 1975. Surely everyone would have bought it by now?

The Great Gatsby was #10 on that vaunted USA Today List of the top 100 bestselling books of 2013. It was originally published in 1925.

Brett Battles said...

I figured I was wrong, been out of trad publishing 2 1/2 years so barely remember. Well, I guess I'm technically hybrid since Random House still controls my first five novels...I tend to forget that.

Anyway, thanks for the correction. My numbers were already ugly. Your revision makes them down right revolting.

Paul Draker said...

What would traditional publishing look like with this business model:

- single-book, limited-term print rights only
- no noncompete
- no advance
- 50/50 revenue share
- monthly rev-share distribution (after print-run and marketing costs recouped)
- rights-reversion clauses triggered by minimum annual author revenue floors

This would actually be interesting to some of us who until now have considered traditional publishing irrelevant.

But can traditional publishers build a viable new business on that model?

Anonymous said...

I'm pretty sure I have everyone beat. My first novel, through a traditional publisher (a small press, but one that's on the approved list for MWA and ITW), is earning me 8% net on ebook sales.

It's listed at $4.99, so I'm getting $.20 per copy. :(

Yes, I signed the contract. Starred review in PW, worldwide library sales, distribution in all the major bookstore chains.

Unfortunately, none of that crap pays the rent.

What's really amazing is that this publisher is still getting authors to sign up for this unconscionable exploitation. I wish I could grab every one of them by the collar and send them to this blog.

Liana Mir said...

Genre. About 33-52% of my ebook income comes from Amazon (depends on the month) in Christian fiction and almost all of my income comes from Amazon in SFF titles.

Romance also does well across platforms.

Iola Goulton said...

On non-compete clauses, Steve says:

"We don’t need another publisher coming out with a book by author x at the same time we are. That’s a disaster for the author and the accounts and the accounts would end up buying one and not the other."

And this is why the publishers - and the 'accounts' (by which I assume you mean bookstores) are going downhill fast.

I don't care where I buy the next book from x, or who publishes it. I just want to read it. If the 'accounts' will buy one but not the other, then my buying behaviour is obvious.

Pre-order both books from Amazon.

If I order the Kindle edition, it magically appears on my Kindle at 7pm New Zealand time, just after I've done the dishes and am wondering what to read that evening.

You, the publisher, have nothing to lose from this scenario. The only losers are the 'accounts' who stock one book and not the other. And the big winner is the author, who sells more books.

Rob Gregory Browne said...

Steve said: "We can put the books out there but we can't force people to buy them."

Well, no. You can't force them. None of us can.

But I can put the books out there, too, hope that people buy them and make 70% on each book I sell. And I can potentially make more from my Amazon only sales than your authors can at Walmart or Target.

In fact, I already do. Books I write under a pen name regularly go to Target and regularly sell in the thousands, but I make less off those books than I do off my indie books.

It all comes down to that percentage. And for most of us, that's all that really matters.

Elaine Levine said...

Paul Draker said:
"This would actually be interesting to some of us who until now have considered traditional publishing irrelevant.

But can traditional publishers build a viable new business on that model?"

That would definitely be more tempting, Paul, but it still doesn't address the concerns I have such as

* can I trust the publisher to brand my book/series properly?
* can I trust the publisher to provide adequate copyediting/proofing?
* can I trust the publisher to provide covers that represent my brand (as opposed to representing the brand of their imprint)?
* can I use the critical end-of-the-story space to connect with my readers with links to my newsletters/social networks, etc?
* can I have the editorial freedom to write the edgy, not-middle-of-the-road, not-even-PC stuff that I write that my readers love?

Over and above contract terms, for me it's that whole control thing that I would need to be able to retain. And I just don't see that happening with trad pubbing.

Gary Jonas said...

I just want to say thank you to Steve and Joe for such a great conversation. Fantastic post, and multiple updates. Outstanding!

Daniel Kenney said...

Steve, I heartily agree with Iola's comments on non-competes but its such an important topic I want to continue.

You know the biz a million times better than me so when you say "accounts" will only buy 1 book from an author and not 2 that come out at the same time, I suppose I have to believe you.

But what if none of us self-publish authors are even talking about that?

What if we are saying, "When it comes to print, you can be the only game in town with my books and I won't go with another publisher...but as for ebooks? I want the ability to self pub those whenever and however I see fit?"

How can that possibly be a bad thing for the publisher of our print books?

Only if the quality of the ebooks is so bad as to literally make people vomit and not ever want to even try the print books. But seriously? If you think a writer is good enough to give a print contract, let's assume said author is professional enough to only put out high quality material.

Point is, the more high quality material the author can put out and the faster they put it out, the better their name recognition will be and the easier it will be for people to "discover"...wait for it...their print books. Yay!

When many of us self pub authors wring our hands about non competes, this is what we want the freedom to do. Yes, we are not morons...we understand that having physical print books in physical book stores is a very good business strategy. So yeah, as long as I can continue to build my brand and my audience by releasing ebooks when I see fit, why not let an author do this?

I really, desperately want a publisher to answer this question for me. Thanks Steve!

Joe Konrath said...

that whole control thing

How ya gonna keep 'em down on the farm, after they seen Paris?

Being in control is pretty sweet.

Paul Draker said...

Oh, the business scenario I describe, then control over content, edits, cover, title, etc. remained with the author.


After all, the author has already published the ebook version of the same title.

Anonymous said...

I'm glad there are so many people with valuable books out there. For me, I made almost nothing going with a traditional publisher. Now I'm making almost nothing self-published . I also make nothing from my audio books. I turned out in hindsight that I'm just a crap author. Crap authors can't make it in either world, apparently.


Paul Draker said...

Make that: Oh, in the business scenario I describe...

Where's my editor when I need him? ;)

Anthea Lawson said...

Hey, RJJ at 8:37

If your writing and storytelling got you a tradpub contract, then there are reasons OUTSIDE your writing that are keeping you from selling.

Are your covers professional and do they represent your genre?

Is your product description snappy (selling the sizzle, not the steak)?

Are you correctly priced (as an indie) for your genre?

If you're not sure, go to your genre/subgenre on Amazon and STUDY how the Top 100 authors are packaged. Compare your books in each of the above areas to the books on the front page of the Top 100 (1-20) of your genre and really take a hard, honest look at how your product compares.

Once your book is written, edited, copyedited, formatted, and proofed, you have to take *off* the author hat and put on the seller's/marketing hat. Stand back, ask yourself some honest questions, make some changes, and the resulting sales might surprise you. ;)

Rob Gregory Browne said...

Being in control is pretty sweet.

Amen, brother.

Anthea Lawson said...

@Elaine Levine. Actually, I think my $10 over six months beats your royalties in the puniness department. Even when you add in the whopping $90 from book number two!

Six months of royalties paid from Kensington to me on two books (published 2008 and 2009): $100. But don't forget the agent cut! I just don't even know where to begin to spend that $85. Yeah baby. ;)

Barry Eisler said...

I just want to add my thanks to Steve for taking so much time to engage here. I've never seen anything like this from someone in establishment publishing, and I think this kind of discussion can only be to the benefit of authors. Thanks too to everyone in the comments section; just finished reading and have a ton to ponder from all of it.

Steve Peterson said...

Great discussion, Joe, and kudos to Steve for engaging in it.

Regarding the $6K for a cover, in my experience that's not at all unreasonable for an original piece of art by a top-notch artist like Michael Whelan. Of course, my data is a couple of decades out of date (from when I was publishing game books), but that's in the range of what I was quoted back then. Second use rights (something I explored for game book covers) could be had for under a thousand.

Of course, these were original paintings you were commissioning from top fantasy and SF artists. And you'd only be getting first publication rights, and you'd have to do all the graphics work yourself.

I would not advocate spending that kind of money unless you already has some idea of what kind of numbers your novels would sell, and if you had some reason to believe an incredible original art piece would really goose sales enough to make it worthwhile. If you net $2 a book, you'd have to believe you were going to sell an extra 3000 copies just because of the cover art. Maybe, but that seems unlikely.

For myself, the cover art serves to catch my eye and get me to check out the title, and maybe the blurb... but I can't recall ever deciding to buy a novel because the cover art was so gorgeous.

I will say the dynamics are somewhat different in a retail store environment, where ideally if your noevl is face out you'd like to catch someone's eye from 10 feet away. Spending more on cover art in that case is more defensible, I think.

Though it still feels like fingernails on a blackboard to think of the cover artist getting more up front than the author.

Daven said...

Paper books are the Big Five's last bastion of strength. So what will happen to New York publishing when the "paper barrier" is breached?

AlexB said...

Steve, other people have said it, go read Kristine Kathryn Rusch.

On Thursdays she posts articles under the heading The Business Rusch, and is currently partway through a series on discoverability, which I believe is something you were asking about.

She and her husband, Dean Wesley Smith, are both writers, and have at times been publishers, editors and bookstore owners. They are pro-indie, and they know often seem to know more than anyone else about what is going on in the here and now.

Do you know what the "produce model" of selling books is? It is basically the method of getting books to readers NOW, because otherwise they'll go "stale" (get taken off the shelves at bookstores). A slow build book can sell more than a bestseller and still be a failure under the produce model, because it didn't meets the "units sold/time since launch = success" requirement.

Indies can afford to take the long view. It isn't a product they are trying to establish, it's a career. So the book doesn't sell well initially. Give it time, write more. The book will still be there, still on sale, when the author hits their tenth book, which becomes wildly popular. The readers who want more of the author's work can find it.

An indie only needs to worry about making the best product they can to sell their own brand(s). With so many authors to work with, and all the vying for shelf space, publishers cannot compete on that level.

Can they?

I'd also suggest reading Kris's articles Dealbreakers 2012 articles (a fair way down the Business Rusch Publishing Articles page. There are four. If you only see two, read them, but they aren't the ones I mean). And anything Passive Guy has written on contracts. However competitive you think your contracts are within the industry, I think it would be well worth your time understanding contracts from the opposite side of the fence.

Steven Zacharius said...

My last comment for the evening. For those of you who were complaining about low royalties on some old backlist titles, out of curiosity are your ebook contracts based on percentage of the list price of the book which is the old standard, or on net receipts. If they are on percentage of list price, which I would tend to think some of them are, there is no way to discount the books to the low prices that you indie publishers now price the books at because we'd be losing loads of money on each sale. If we have to pay you on the list price, we'd be paying you more than we'd be receiving. If you'd like to change the terms of your ebooks to percentage of net receipts, please let me know in a private email and then we'd be happy to discount your books to whatever price you would like us to.

For the few of you that are complaining about your royalties on these old books, I realize they're small now. I don't know how much your advance was back then, I'm going to assume it was fairly small, maybe $2500., but I have no idea because I'm not looking them up at the moment. You didn't get any advance at all when you placed your books up yourself, so don't forget about the advance. Is it the publishers fault that the accounts don't want to reorder the book? Some books reorder forever by big authors. Look at the big romance authors whose books are reissued all the times. On some of these reissues we will get out 200,000 copies in mass market on an old book, because they sold. Don't necessarily blame the low royalties on a publisher or in this case us just because the book didn't sell. There are a lot of variables as to why a book might not sell. It could be a bad cover or perhaps even a poorly written book. I know no one likes to hear that but maybe consumers didn't like the book. I'm not talking about anybody specifically here but when you talk about low royalties we should check out the reviews. Did it get a starred PW Review or a starred Library Journal review or 4.5 stars on Amazon? All of these things contribute to low royalties or high earnings. It all starts with the book.

In regards to the comment about the top 100 in horror, do you know how many copies sold that means? Kindle won't tell you. Horror is a category genre that is small now in traditional publishing because it wasn't selling well so retailers stopped buying it. I'm not talking about books like Doctor Sleep, I'm talking about category horror. With horror being one of the smaller categories in publishing you don't know if #100 means 10 copies sold or 1000 copies sold. Just because it's in a top 100 list in a category does not necessarily mean big sales.

Lastly many books do use stock art. Many books have original photo shoots as well. Many books combine many stock photos and time spent manipulating them too. On our digital first line art is only $150 like you guys pay.

Elaine Levine said...

Gah, @Anthea! You do win.

Paul Draker said...

"In regards to the comment about the top 100 in horror, do you know how many copies sold that means? Kindle won't tell you."

But I will.

#100 in Horror is Precious Bones, which is ranked #4750 out of all books on Kindle.

It's selling roughly 40 copies a day, at $2.99, with a $2.10 net to the author. That one book is earning her $85/day right now -- $30,000+ a year -- and it's not her only book.

I think this myth about "can't tell how many books someone is selling on Kindle" is getting pretty tired.

Let's all move on to something more interesting.

Anthea Lawson said...

Steve, thanks so much for returning, reading, and commenting. You gained a lot of respect from folks for doing so.

Re: my low royalty statement ($10 for six months' worth of sales).

My e-book royalty is on 25% of net.

This book (my debut, titled PASSIONATE by my editor, despite pleas to find a less-generic title, or one that at least was historical-sounding) was a RITA-nominated book, and got me named one of the "new stars of historical romance" by Booklist. Amazon reviews are 4.4 star average.

It has a cover from Kensington that misses the historical genre by a wide mark. Absolutely nothing I can do there.

The real problem with this book is that it's got an exotic locale setting that ranges far beyond the ballrooms and parlors of London. That puts it outside the general sweet spot for historical romance. Once I get the rights back, I am SO looking forward to connecting it with readers who want a taste of something different in their historical romances. They are out there, and I will find them. Or, rather, they will find me, since I have a handle on how to make my books visible. ;)

I do have to thank Kensington, and Hilary, for at least taking a chance on the book.

I have a proposition for you. Return my rights on this book and I will give Kensington 25% of net profits until October 2015 (which is when I contractually can get reversion.) I GUARANTEE I can make both of us a lot more money on this title than Kensington is currently managing to do. And your publishing house will gain an invaluable education in how an indie goes about releasing a title and making several thousand dollars off it in short order, since I will provide transparent accounting. ;)

Or, conversely, let me buy back my rights early for $500 (more than you would make during the remaining contract time, based on the royalty statements and current downward trend.)


Anthea Lawson

Steven Zacharius said...

Jackie Barbosa, what you misstated was that your print run was 4000 copies. That is totally inaccurate. Your net sales were 4000 copies. The print run was more than double that but the book did not sell well. That is a major difference than stating the book had a print run of only 4000 copies.

This is what I was referring to as misinformation.

Terrence OBrien said...

Steve: When we’re talking about giving away a percentage of royalties do you expect publishers to give away 70% of the net receipts like Amazon is giving to self-published authors? That wouldn’t be a viable business model for publishers.

Agree. So why should an author choose a publisher rather than Amazon KDP?

Anonymous said...

Anthea, thanks so much for your advice. I'll be working on those suggestions tomorrow. Stay well, RJJ

Jonas Saul said...
This comment has been removed by the author.
Kristi said...

I just have a question for Steve. What is it that he thinks Kensington or other publishers offer that an author cannot do on their own nowadays?

Convince me.

All the editors they've laid off can be hired as freelancers, book cover design, formatting, availability as a POD title, social media support can all be done by yourself. Their advances are laughable.

I'm sure there are cases when going traditional makes sense but help me understand, please.

Marcel said...

@Jonas Saul: That has to be a typo... 130 million?

(BTW, I just pre-ordered your "A Murder in Time" - not because of that amount :D but because of the description.)

Alan Spade said...

@Marcel: it was 130 000. Not a typo (one coma, one point).

Daniel Kenney said :

"When many of us self pub authors wring our hands about non competes, this is what we want the freedom to do. Yes, we are not morons...we understand that having physical print books in physical book stores is a very good business strategy.

I really, desperately want a publisher to answer this question for me. Thanks Steve!"

Daniel, you have an indirect answer to your question by a publisher, Simon & Schuster.

Reread the posts of Veronica Carmichael Munoz here. She said she tried, like Hugh Howey did, to negociate print only rights with Simon & Schuster.

It didn't work. Hugh Howey only succeeded in this because of the huge success of Wool.

Steven Zacharius, here, aknowledged he would only publish with a print-only contract a hugely successful author.

I'm sure print-only deals will remain exceptionnal for the years to come.

One good evolution, as Joe said, was Simon & Schuster releasing ebooks from Veronica well before the paper books. But she has aknowledged herself she would loose money on this deal (wouldn't have she been better if she had obtained a loan from the bank rather than the big advance? We can suppose she has made the best business decision for her, not knowing precisely the case).

By the way, I have not been convinced with Steven Zacharius presentation of Lyrical Press: it gives the impression it's for authors who do not want to do the heavy lifting with promotion and marketing on social media, but we all know even when traditionnaly published, authors have to promote. So, they seem to give up money for a chimera.

Wim said...

Just wanted to address this point from Steve:
"That could be $100,000 and the author earned $ 70,000 or it could be considerably more. But most importantly it’s only 150 KDP authors. How many KDP authors are there"

I've read many informal surveys and articles about just this: what is going on with the indie authors not in the top?
With a little bit of Google-magic, you can find a LOT more than this, Steve:
- A survey with wildly varying results, from bad sales to stellar sales:
- Read the comments here:

Of course ,the plural of anecdote is not evidence. I'm well aware of that. My point is that you can find this information if you look for it. More and more authors are sharing their numbers (Thanks Joe!) As a publisher, I'd imagine you'd be real interested in knowing this information. It would take one of your employees only a few hours to find lots more articles than those I posted. I'm pretty sure the picture you'd see emerge would be totally in line with what Joe is trying to tell you.

As an aside: I have several non-fiction books out with legacy publishers and self-published one a year ago. This year, I'll self-publish at least two more, maybe three if my research goes well. At this point, I don't see why I would propose them to my legacy publishers; there's no upside in it for me.
I am not alone by the way. My co-author is a multiple best-seller in the industry (50+ books) and he just self-published his first book after I nagged at him for years to do so. He is making a killing with it. He's already writing a sequel to it. I'm pretty sure he's going to go more and more Indie as time goes by.
When I talk to my fellow non-fiction authors, they're all either already going Indie or plan to do so. It's not just the fiction authors who are paying attention...

Also, I have my first work of fiction ready and am almost half-way through writing the second. I'm not even considering contacting a legacy publisher for those. I don't have time to lose while it takes years for them to notice me...


Anonymous said...

What's the name of the 6K cover book? There should be no reason Steve doesn't disclose this.

If he says the name of the book, it gets exposure.

If he doesn't, it shows he's not trying to help the author get more sales and the cover wasn't worth the money that could have went to the author.

Overpaid or not, what's the name of the 6K cover book?

Better yet, what the are top 5 most expensive cover books? Would be a good discussion and learning experience for both sides. Stand behind your covers/books and welcome the attention please.


Rex Kusler said...

All this discussion reminds me of the time I saw two Herons at the edge of a lake fighting over a dead fish. A hawk swooped in, grabbed one of the distracted Herons, dragged him up on the shore, and started eating him.

JT Bock said...

I want to thank both Joe and Steve for this great Q&A.

I am one of the self-pubbed authors that Steve is referring to that has low volume sales. I only have one book out. I am a brand-spanking-new-no-one-has-ever-heard-of-me author. My book has been on Amazon as an ebook for less than a year and also as POD through CreateSpace. I've sold under 200 copies and made about $200.

But that doesn't matter. This is a business. I am a startup. Having built a graphics business from the ground up with my husband several years ago, I know that it takes money to make money. Just as we invested in building our website and client base through advertising, offering a quality product, blogging, and doing many speaking events and tradeshows, I will need to do the same for my writing business.

I'm happy with the choice to self-publish. It wasn't a choice I came to easily. I wanted to be published by a legacy until I started reading this blog and others and learned how the tide was changing. Then I spoke with mid-list authors who were becoming increasingly upset with their small royalties, advances, and inability to get rights back for their backlist. Not to mention that most of them received hardly any marketing for their books and spent a lot of their advances on promotion.

I realized that I couldn't wait for others to make me successful and couldn't wait for someone to take a chance on my book (i.e., believe they could make money off of my work). More and more, I saw quality dip in published books as publishers were going for the next big thing to make them money and not for quality of writing. That's one reason I get so frustrated with this whole song and dance about self-pubbed books being low quality. All the self-pubbed authors I know (including me) hire editors and proofreaders. Stories are vetted through rounds with critique partners and beta readers.

Again, I am running a business. Why would I want to put out an inferior product that tarnishes my reputation? As I'm building my readership, it is even more important that I show readers that I am a professional writer.

It's exciting for me when I receive a great rating or review from a reader who gave a similar rating to a traditionally published author. When I ran a Goodreads giveaway on my print book, I had nearly the same amount of readers adding it to their shelves than those published by legacy. When I ran a BookBub free giveaway campaign, I had over 14K downloads. For $90, that's the best advertising dollars spent—reaching 14,000 in my target audience for a superhero romance. A subgenre that several editors assured me that no one is interested in reading.

I'm still tweaking the dials on promotions and trying to see what works. I believe in the marketing wisdom that it takes three touches for a potential customer to buy a new product. So I need to concentrate on getting more quality products out there to continue reaching readers. That's definitely a major key to success.

Beverley Kendall said...

Joe, your success and the 150 other people you mentioned that made $100,000 is truly amazing and kudos to all of you. But you guys are the anomaly still. This is not the reality of self-publishing yet. None of us knows how many tens of thousands or hundreds of thousands self-published titles there are that aren't selling at all.

So you have to be making OVER $100,000 a year to be a success self-publishing. Please don't tell all those authors making--say $10,000, $25,000, $50,000 or $75,000 a year. Don't tell them especially when that what they are making is MORE than they EVER made in a year with a traditional publisher.

You see, they're pretty happy not being a success. They're just going about their life paying their mortgages and getting all those things they couldn't afford before.

This is the kind of rhetoric that makes my blood boil. I would concede the point of the VAST MAJORITY of authors from traditonal publishers averaged even $50,000 a year. I can almost promise you, they don't.

But to be successful self-publishing we have to making buckets and buckets of money. Honestly, we need to start comparing apples to apples.

Anonymous said...

One comment re the back and forth about Kindle device sales slowing. If sales of the devices are slowing, it doesn't necessarily mean the growth in Kindle readers is slowing at the same rate, because people can read Kindle books on ANY kind of device these days.

I own 2 Kindles, but I rarely carry one outside the house with me. Why tote along a Kindle with a 6" screen when I already have a smartphone with a much higher resolution 5" screen and I can read Kindle books on that smartphone just fine?

When I travel, I usually bring the Kindle (it's so light & small, why not), but more often than not (e.g., on the plane) you'll find me reading Kindle books on my iPad or laptop, not on my Kindle.

I suspect there are more people reading ebooks (in Kindle and other formats) on general purpose devices than on dedicated readers.

Paolo Amoroso said...

Sales data of Kindle devices, even if available, may not be the only indicator of ebook penetration, sales, popularity, and growth trends. Smartphones and general purpose tablets are increasingly being used for ebook reading.

To have a glimpse at the mostly hidden iceberg -- yet another digital publishing one -- of smartphone and tablet usage, you may check the download data of Android ereading apps. Here are the most popular ones, for which the Google Play Store only provides ranges and not accurate figures:

Google Play Books: 100,000,000 - 500,000,000
Kindle: 50,000,000 - 100,000,000
Kobo: 5,000,000 - 10,000,000
Nook: 5,000,000 - 10,000,000
Aldiko: 10,000,000 - 50,000,000

Even ignoring iOS altogether, considering only the lower bounds, and taking into account that some apps like Play Books come preinstalled on Android devices and actual usage may be lower, these numbers hint at a more complex story than the market share of Kindle devices may suggest.

Jonas Saul said...

@Marcel Thanks for the catch. (That's why I have an editor) And hope you enjoy A Murder in Time - thanks!

As I was saying, with my current income as a self-publisher - over $100,000.00 in 2013 - all I would look to legacy for would be print distribution.

Amazon has been amazing to me and I too, have every title in the KOLL program as there's more revenues in borrows than selling my ebooks at all the other etailers combined.


Steven Zacharius said...

I think I've added enough to this thread and it's probably the longest online now. I'm apparently not convincing any of you about benefits of traditional publishing, which is fine. I've learned some things from here and I'm implementing some ideas I was given so it was worthwhile for me. I'm hiring Barry Eisler as my personal publicist since he retweeted the post 100 times and I don't even know him.
In regards to cover quote my friend is your friend...try searching Pino and Franco. These were historical romance covers and are pieces of art that sell for big bucks now.
Some people were quite pleasant in their comments, others were antagonist and Jackie Barbosa called me a delusional CEO...that was my favorite on another blog.
She was hung up that I said I didn't participate on another blog when I didn't even know I was on the blog. I was probably replying to comments on my phone and not realizing it was part of a blog, but what was the big deal?

Steven Zacharius said...

I broke off my post in two parts not knowing how long I could go. There is no need for people to be rude on a blog. Some people have no class. If there's anyone out here who is a Kensington author who has a problem or a question I've posted my email a dozen times
Try and find another CEO online here that will answer your questions and being called delusional by one of their own authors.
I received dozens and dozens of private emails from people over the past two days and an invite to be on a punch of panels at the NINC conference in October.
Lastly and I really do mean it....we do publish authors now that continue to do other books on their own. Generally I believe they are in other genres but we have done this before.
I wish you all good luck in your careers and it's great that you're making money doing something you love.

Whoops....I'm going to do one last post of a doomsday scenario that I had on FB last night....back in a sec....but I'm not staying around for the commentary.

Steven Zacharius said...

Final post--hope it fits...
what are you going to do when there's 250,000 indie books that have been published and there all under $3.00? How are you going to distinguish yourself from the other 250,000 books….and I'm just picking a number out of the air….maybe there's more than that now…we'll never know…since once again, it's secretive from KDP. How is anybody going to find your book? It's going to be a needle in the haystack. And as I mentioned before there have been discussions that say that people have now stockpiled many inexpensive books on their readers and sales of ebooks might slow down. Scribd and other subscription services provide publishers data where you can see how fast a book is being read. Scribd sells their subscription service very very cheap….the price of a few indie books for unlimited reading each month. $9.00 for unlimited reading. Their data has been shocking for me to see. There are a huge number of books that haven't been even opened but they were bought because they were cheap. There are loads of books that are started and read 30%. There are books that people start and never finish and readers that take months to read one book. What's going to happen when the readers are overloaded with low price books? Rather than predicting the doom and gloom of traditional publishing, I think this is what indie publishers should be thinking about. You're making a respectable living now….some a lot better than others…some better than you were before….and there are tens of thousands that probably aren't even making a dime. Only time will tell which scenario will play out….but I don't think publishers are disappearing. Kensington is a little guy against behemoths. How are indies going to compete against mega-billion dollar conglomerates in the future? What happens if other retailers decide they can't compete against Amazon willing to take a loss on every bestselling book that they sell….Tom Clancy for $1.99 and Sycamore Row for $1.99? The other ebook retailers can't afford to do that. Google could if they were interested in turning up the heat. Overstock tried it for a week or two…..they matched the prices below cost for a short while….but losing money on each sale is not a viable business model unless you just want to wipe out the competition. At a certain point does the government step in and say it's a monopoly? Maybe….who would have thought the DOJ would investigate the Big 5 and Apple? As I've asked before what happens if Amazon is the last guy standing in ebooks and suddenly decides….okay guys the fun is over….let's change the rate structure. You're now only getting 25% of net receipts and you have nowhere else to go? These are all real possibilities, not pie in the sky ideas. Amazon has never said they make money on selling books. They are not a huge print retailer. They can't compare to Target or WalMart or B&N in print. Do you know that when Amazon distributes other products for other firms that they study how well the product sells and then makes a deal directly with the manufacturer to wipe out their original partner in sales? Did you read The Everything Store about Jeff Bezos about how he was willing to give diapers away for nothing to put out of business for as long as it took until they would agree to sell Amazon the company? They've done this with other businesses as well. These are the issues I think you indies should be thinking about. Over and out.

Chris W. Martinez said...

So you have to be making OVER $100,000 a year to be a success self-publishing. Please don't tell all those authors making--say $10,000, $25,000, $50,000 or $75,000 a year. Don't tell them especially when that what they are making is MORE than they EVER made in a year with a traditional publisher.

You see, they're pretty happy not being a success. They're just going about their life paying their mortgages and getting all those things they couldn't afford before.

Hear, hear, Beverley. That bears repeating.

Alan Spade said...

Trad pub has been brandishing scarecrows since the rising of ebooks. It hasn't prevented more and more midlist authors to go the indie way each year.

The fact is it's a hard business both sides, indie or trad. But at least, by selfpublishing ebooks, more authors than either in publishing history have been able to generate income.

All indies combined weigh 25% to 30% of Amazon ebooks sales. That's huge. Individually, indies weigh nothing. Collectively, only Penguin-Random weighs more.

Surproduction has existed for a very long time with trad publishing. It hasn't prevented the business to grow. What was described as the "tsunami of crap" by trad pub is competing with a tsunami of titles from trad publishing.

And often, indie titles win.

Joe Konrath said...

Steve, thanks again for chiming in and making yourself available to writers.

I'm adding your final post here to the blog entry, with my replies, but I don't expect you to respond. Your final post has questions, and I have answers, and if you're truly curious to know those answers you are welcome to read it. I'm sure we could go back and forth for several more rounds, but please don't feel it is necessary.

It's been a pleasure having you here, and thanks again.

Alan Spade said...

Oups : more authors than ever

Walter Knight said...

Sales of 37,000+ leave me somewhere in between, but my E-book sales will continue forever.

Print publishers didn't want my books. They probably never will. But, my sales will catch up with many of my printed author heroes.

Anonymous said...

Whether it's an Indie or a traditionally published author, they will both need to be found in that sea of 250k new books that you mention. Discoverability has always been an issue, and will continue to be a challenge. However, I feel far more confident in my ability to be found than I am with a traditional publisher (unless I were to get one of those crazy huge advances of course).

I am a new author. I've put out two books in my first two months and have managed to stand out enough to sell several thousand books already. It can be done.

Sean Black said...

Discoverability is a challenge for authors regardless of how they publish. Much of the social media promotion and marketing that drives sales is already carried out by authors in any case so no change there. Readers' loyalty lies with authors not publishers. I'd say the challenge is arguably going to be tougher for publishers, who carry considerable overheads, than for authors.
I'm not quite sure where this idea that price is the main factor that is driving sales of books by indie authors is coming from, but it's slightly lazy analysis. In the US where I self publish I price my titles at pretty much the same price, or higher, than my publisher in the UK does. People buy Joe's books or Jude Hardin's or Hugh Howey's titles because of the content, the low prices are just a bonus.

Jackie Barbosa said...


I apologize for saying you were delusional. I should have said you APPEARED to be delusional. There's a difference and, as a writer, I should choose my words better.

However, the fact that you denied multiple times that you had posted to Laura's blog definitely made you appear divorced from reality. The fact that you continued to claim every book published by Kensington is edited (as opposed to "copy edited") despite multiple authors saying this was not the case makes you appear divorced from reality. The fact that you keep saying people like Joe and Barry are "outliers" in self-publishing (they are) and then refer to Nora Roberts and Lee Child as though they represent a "typical" trade publishing experience makes you seem either disingenuous or out of touch.

I *want* to believe you are none of these things. But while I appreciate your willingness to engage in dialogue, your responses don't always suggest you're interested in learning from us, only in educating us as to the error of our ways. For example, did you read Courtney Milan's post on this thread yesterday? She explained, quite clearly, one simple way in which Kensington isn't taking advantage of the tools EVERY publisher has to maximize sales. Are you going to do ANYTHING with that information?

I'm going to accept your claim the the print run for my book was 8,000 copies. There's no line item on my statements to substantiate that, however, and I was told within a month or so of my book's release that there were about 200 copies in the warehouse. I think you can understand how--in the absence of anyone telling me what the print run for my book was--I might extrapolate the number based on a combination of units shipped and the number still in the warehouse.

But really, the bigger question is why isn't it be standard to provide authors with this information? If we're in business together, doesn't it behoove me to know as much as possible about what you, my publisher, are doing so that we can coordinate our efforts to achieve the best result? This is what I'm talking about when I say there's a lack of transparency in trade publishing.

I know, as a documented fact, that my self-publishing efforts are benefiting Kensington. I have 99-cent short that's a lead-in to the anthology you published. At the end of that story, I have an excerpt from the anthology. From a combination of my bitly links to the Kensington anthology and my Amazon Associates information, I know 6 copies of the anthology have sold on Amazon since October of 2013 as a direct result of someone clicking that link. I'm actively doing something to sell that book, despite the fact that I make more in per unit royalty from books I've self-published. Why? Because I'm still proud of that book and want my readers to know it exists.

So it all comes down to this. You've got the rights to my book for at least seven years. Are we in this together or aren't we? I'm willing to do a lot more to promote that book and earn your company three times as much as I earn in the process. But you have to meet me halfway. And you could start by providing me with just-in-time data about my sales on various retail sites so I could better target my efforts.

Again, I do apologize for saying you were delusional. It was hyperbolic and unfair.

Joe Konrath said...

Just updated the blog, again, with my replies to Steve's last post.

Nathan Sisk said...

This is a fantastic post and has greatly increased by respect for Mr. Zacharius, especially since my only impression of him before now was that Huff Post article he did back in December, which wasn't exactly endearing.

Still, I wanted to contribute my information to this, because I really don't think he's seeing the perspective of anyone starting out trying to build a career as an author.

I published in August of 2013, so at this point I've been on sale for five months. In addition, I have two short stories which have done next to nothing (including paying for their covers) except maybe keeping my name out there. The only thing I think I did "right" was make a good story. I have a website and a blog but both receive less contribution than needed, my cover is a premade that I shoehorned a title onto with GIMP, and I paid for no editing.
Yet in that five month period I've made about $1,000, selling roughly 600 copies of my book. I have pushed it as high as $4.99 and as low as .99 but my average price has floated around $2.99 or $3.49 (my best performing price I've found). The total sales I've made at .99 has been around 150-200, which I disclose only because everyone is so concerned about the low price stuff. These sales are small, but I feel like it's more than I would have made in the same amount of time with a traditional publisher. Technically, I suppose I would have received half of a theoretical $5,000 up front but I am including the time it would have taken to query an agent, find a publisher, and get to publication. I still have a good two or three years to earn that $5,000 (not even taking into account the agent's fee, stripping out $750).
This isn't a hug success, but as a proof of concept I think it's worked pretty well. I have readers. Not a lot, and no idea of how many will follow the series, but it's more than when the file was sitting on my harddrive. I've recouped my investment as well and have plans for a series.

You keep saying that I, an unknown author with no publisher backing my play, will never be Hugh Howey or Joe Konrath. That is true. You also state that self publishing has a sort of critical mass, that at some point if you want to be bigger you have to transition. That might be true, because of the distribution system you've built, but you have absolutely no ability in making it happen yourself. You can no more produce a Stephen King or a J.K. Rowling than I can become a Hugh Howey, not from nothing anyway. You seem only to be able to take a hot thing...and make it hotter purely through deeper pockets. This is what I do know, with a $120 investment and five months I am already better than I would have been with a traditional publisher.

But with self publishing...I don't need to be.
So much of the talk has revolved around superstars. You're right that so many don't earn anything. I think it is very fair to equate them to the same people who mail in poorly written manuscripts to editors and agents. But what about the people who have good work that will sell, but never gets published? They're publishing it themselves and making money. Some aren't making much, others are.

You don't offer that. Not even close. Your advances are smaller and you control everything about the work of the author. You might be able increase the temperature of a hot thing, but you can't start a fire to save your life. I understand, you can't offer more because the risks are becoming greater for the industry, but your customer (in this case us) has absolutely no duty to bear that burden for you. When you pass that burden on, then limit your author's ability to grow and spark their own fire, they look to alternatives, and Amazon (and Kobo, Nook, Apple, Smashwords) took advantage of that by offering a better service.

That is what you have to think about.

Steve Peterson said...

Discoverability is a big problem for authors and it will get bigger. It's the exact same situation with mobile games, and that situation continues to evolve. Publishers might theoretically help with discoverability, but if that's what you are looking for you'd better make sure the contract backs up what the publisher promises.

There are no easy answers for authors seeking to build an audience. Joe has provided many examples of things to try in this blog. It's going to be something that you should work at, or hire someone else to do on your behalf. Certainly having more books and stories out there will help, and not every author is comfortable with marketing themselves or particularly good at it. I expect more resources to be available for hire by self-pubbed authors to help with this.

Dale T. Phillips said...

Discussion is great- and considering how diametrically opposed the viewpoints are, remarkably polite for the Internet. Kudos to Steve and Joe for the insight.

At times it was amusing, as if Steve was boxing blindfolded and with his hands tied behind his back. But he stayed in there, even while getting clobbered.

For many of us who continue to write and publish, it's good info as to what path to pick. Here's a few takeaways of mine.

It may not be wise to tout the fact that trad pub will pay a cover artist more for maybe a week of work than the writer who may have taken a year or more for the work represented. Ouch. The laughter you heard was everyone in the Indie world. Superb cover art is available at less than a tenth of that high point. And by going Indie, we can be sure to have a cover that represents the content of the book. No green garage doors, as best-seller Barry Eisler got stuck with.

If one brings up the point that a competitor is secretive about numbers, one should routinely provide numbers when asked, or risk sounding disingenuous.

If quoting results of a survey to bolster a position, first check that the survey has actual real-world numbers, meaning, and value.

If trying to convince people on the basis of numbers, don't compare the absolute top of one method with the lowest common denominator of another method.

Since the majority of trad pub books don't sell more than a few thousand, it seems as if one has to win a lottery to break out- and all of it is outside the author's control anyway. With Indie, you can sell far fewer copies and still make more than the typical mid-list advance (and possible royalties). You can do print, ebook, and audio, get into bookstores and libraries (I have), keep control over everything, receive money quicker, and for much longer.

I did not see a good answer to Joe's question of why the average writer would want to trad pub. With many writer friends on both sides of the publishing world, I can say that I'm so glad I didn't lock in my series with a trad publisher, as I sought to do. After less than three years since my first book publication (small press), I've got an enviable list of books out, have paid engagements to talk about writing, get to do what I want, and (like Joe always says) continue to experiment. I've got a separate series Kensington would love- but I doubt I'd sign the offered contract. But as we say- it's great to have choice, and it's great the author now gets a chance to choose their own destiny.

cinisajoy said...

Hi! I am a reader. Make that a voracious reader. I would like to address a couple of comments that Steve made. One being separating the traditional from the self-published. I would love this but not for the usual reasons. I would love it so I would know that I am buying only self-published authors.
On buying traditional paper books, I have always bought used or seriously discounted because I just couldn't afford to buy new books.
Now getting back to e-books, I have spent less than $15 on traditionally published e-books and only when they were 1.99 or less (this is in 3 years). I have spent at least 10 times that on self published books and that is just in the last year. Heck I spent over $35 just in the last month on SP's.

Now on to the book subscription services. I looked at them and found they were severly lacking in anything I might read and I read across several genres.

I just wanted to acknowledge those points from a reader's point of view.

Thanks for letting me post here.

Anonymous said...

Excellent discussion. It's surprising and great that noted print industry professionals finally---finally--engage. But, well, here's the but...

So much of what both Gottlieb and Zacharius assume is they get to define what success means to an author. The real answer to that is as varied as the number of authors and---this should be self-evident--the only definition of success that matters to an author is their own definition.

Do you want a large advance?
Do you want great royalties?
Do you simply want someone to read your stuff?
Do you want control over marketing decisions?
Do you want to the ability--a real ability, not the fake "reversion clause" ability--to sever a business deal that has not worked out?
Do you care about unit sales or income per unit?
Do you want to be treated as a member of your own publishing team or live with no contact or dismissive responses from your so-called "business partner."

All these things will have different levels of importance to different authors. The publishing industry presumes that the only definition of success is how it defines it. An author might, in fact, agree with that definition. But those who don't aren't automatically idiots.

Anonymous said...

Fwiw, trying to sell your appeal as access to print distribution channels then coming in later and saying to one of your own authors that you can't make those channels take her books is lot like saying to a bouncer "I'm with the band."

You've just pointed out you don't have the power you claim to. It's in the bouncer's hands, not yours.

Indie authors are not only "with the band," they are damned band.

Joe Konrath said...

The publishing industry presumes that the only definition of success is how it defines it.

That's a terrific point I wish I'd made.

I'll use it at some point, but I don't know who attribute it to because you're anonymous. So don't get mad if I get credit for it some day. :)

Veronica - Eloheim said...

A big take away from this great conversation is that publishers better make sure they are making as much money as possible on print.

Joshua James said...

I still don't know why anyone would choose to sign with Kensington over self-publishing on their own.

It's true that you get some up front money (but it sounds like for a first timer that's a low amount) but the royalties are just so much lower, and there's no promise of what they'll do to promote it, other than what one can do for themselves...

So it begs the question, why publish with this fellow's company?

and why hasn't he taken Joe up on his offer to publish the print versions of his books, for no advance?

Steven Zacharius said...

Just two comments, nothing about the debate about which is better...sp or traditional.

Alan Spade said that indie publishing represents 25%-30% of ebook sales on Kindle. I would like to know where that number came from since Kindle doesn't share that info and I can not imagine anything being further from reality than that comment. With books priced very low, many at $ .99, there is no way they could have this kind of revenue. I would bet that total indie publishing is a fraction of that number, maybe in low single digits, but we'll never know. But to state that only the revenue from Penguin Random is bigger is just spreading more info without facts. Show me that Amazon number please.

Also to Jackie Barbosa, what is the different at all if I did indeed post on Laura Kaye's blog? What was your hang up with that. I've never ever been on her blog. As I mentioned I was probably replying to comments on the Huffpo article on my site from her not realizing it was her blog. I never would have had any reason to go over to her blog, nothing against Laura Kaye of course.
Your misinformation about your print run was again an example of just putting out incorrect information and everyone then accepting what you said as fact. You should know the difference between gross and net. Royalties are based on NET sales which is why you see that number on your royalty statement and not the print run from Kensington. If you had called and asked for your print run it would have been shared happily with you or your agent.

Jude Hardin said...

and why hasn't he taken Joe up on his offer to publish the print versions of his books, for no advance?

Since print is 70% of the market, and since traditional publishers are so good at promoting their titles, why doesn't he offer a bunch of us print-only deals? After all, just a few years ago, ebooks weren't even part of the equation.

I would take a print-only deal with no advance and 6% royalties on the first 5K copies, with the royalty percentage escalating as more units were sold and topping out at, say, 15%.

If I were the CEO of a publishing company with solid distribution channels, I would sign authors up for that all day long.

Alan Spade said...

Steven, here, look at this David Gaughran post :

To quote David, "30% of the top-selling e-books on Amazon are self-published", and "25% of Nook sales are self-published e-books".

It's arguable that outside the fiction world, self-publishing may not do as well as trad pub. Because ebooks are strong with fiction, and self-published authors are very strong with ebooks. There are many many other books than fiction, so trad pubs have assets.

But in fiction, I see the role of trad pub shrinking more and more with each year...

Liana Mir said...


I've got to say: you keep saying Amazon won't share its figures then when linked to THOSE FIGURES, state that the figures are misleading because they are shared by Amazon in the form of marketing.

Who else can share them? Either accept the figures they are sharing or just say you can't know because you don't trust the.

Liana Mir said...

And we have also linked NUMEROUS times to data that proves indies are not all priced at 99 cents. In fact, 2.99 - 4.99 maximizes profits and MANY are using those. The revenue certainly can go as high as a third.

Liana Mir said...

Sorry. Typo:

Who else can share them? Either accept the figures they are sharing or just say you can't know because you don't trust them.

Jackie Barbosa said...


What is the different at all if I did indeed post on Laura Kaye's blog? What was your hang up with that. I've never ever been on her blog. As I mentioned I was probably replying to comments on the Huffpo article on my site from her not realizing it was her blog. I never would have had any reason to go over to her blog, nothing against Laura Kaye of course.

I was explaining why I posted what I did on Twitter. The fact that you did not seem to remember what you yourself had said, even when it was QUOTED to you, struck me as odd.

And I have, in fact, apologized to you for that. Twice, in fact. Here's a third time: I'm sorry I said it.

Your misinformation about your print run was again an example of just putting out incorrect information and everyone then accepting what you said as fact. You should know the difference between gross and net. Royalties are based on NET sales which is why you see that number on your royalty statement and not the print run from Kensington. If you had called and asked for your print run it would have been shared happily with you or your agent.

Maybe I should have, but I was a newbie author and I figured if my editor didn't think I needed to know, it wasn't important. Moreover, I had been told by more than one Kensington author that their requests for such information were clearly not appreciated. Maybe they misinformed me, but I believed them and didn't ask question. I was trying to be a "good author." For all the good that did me.

Moreover, I'm not sure it IS important. What practical difference does it makes whether my print run was 8,000 or 4,000? The fact is that less than 4,000 were shipped to retail outlets.

Anonymous upthread said "trying to sell your appeal as access to print distribution channels then coming in later and saying to one of your own authors that you can't make those channels take her books is lot like saying to a bouncer "I'm with the band.""

And that's what I was pointing out. A contract for print distribution doesn't, in fact, guarantee print distribution in all the channels to which the publisher has access. It only promises the publisher is going to make your book available for order by those outlets. And depending on how much you were paid in advance, you can get a pretty good idea of how much additional market effort will be made to convince those outlets to buy your book. (Hint: A $2,500 advance doesn't signal a lot of effort will be made.)

Although you might not be able to tell it from our conversation, I *am* grateful to Kensington for contracting and publishing my book. I learned a lot and genuinely believe the experience was very much to my long-term benefit.

If you are interested in hearing how those of us who have published with traditional publishers think you could do a better job, that's wonderful. We've given you a lot of suggestions. More transparency (like authors not having to ASK to find out what their print run was!). Better use of metadata to boost sales of your authors' backlists. Faster sales reporting to help us be more agile in our own promotional efforts. Fairer contract terms. Speedy reversion of rights when requested.

If you just want to convince authors how great traditional publishing is, I think we're quite done.

Joe Konrath said...

Hi Steve. One of the blogs I suggested you check out, David Gaughran's, makes a pretty compelling argument for self-pub sales to constitute 25% or more of the ebook market.

If Nook is 25% self-pub, I'd guess Kindle to be higher.

At any given time on any Amazon top 100 genre list, you'll find lots of indies. Sometimes more indies than legacy.

For example, right now in the Police Procedural Top 100 I count 29 indies (plus 10 Thomas & Mercer). That's 39 books published outside the legacy system that selling the best in that category at this moment.

Try this with other genre bestseller lists. You see similar numbers.

Rex Kusler said...

For myself, I could care less about a print deal, because paper books are going the way of the drafting table.

Jude Hardin said...

I believe David was talking about the percentage of units sold, and not the dollar amount.

But there's something else to consider: the sheer volume of self-published titles sold. If the worst sellers are moving 100 units a year, and there are 1,000,000 of the worst sellers...

Well, do the math.

Joe Konrath said...

Here are more results from that WD survey:

54% of “traditionally-published” authors (and nearly 80% of self-published authors) earn less than $1,000 a year.

But as Hugh Howey says at the end:“This survey does not capture the fact that self-publishing is going through a renaissance. It expects a group of authors with two or three years of experience and market maturity to line up against the top 1% of authors who have had several generations’ head start…"

Also, Jude just made a point worth repeating:

"If the worst sellers are moving 100 units a year, and there are 1,000,000 of the worst sellers... Well, do the math."

Which begs the question: what's the worst Kindle ranked ebook?

Joe Konrath said...

And now I'm curious.

Contest: Post the link to the self-pubbed ebook with the worst Kindle ranking. Whoever finds it gets all my ebooks for free.

I want to see how low the ranking goes, because that will show us how many ebooks are on Amazon.

Alan Spade said...

Yes, Jude. And let's not forget what David said on his blog:

"I imagine that many will respond by saying that this is all in reference to unit sales, and the industry standard of quantifying market share is to refer to dollar amounts.

Quite frankly, I think that’s mistaken. Talking about things like e-book market share in dollar amounts might be important to traditional publishers – who are anxious to replace falling print revenue with new digital income – but it’s way less important to self-publishers (who price at the lower end of the range and don’t really care if readers are paying less for digital editions)."

Contrary to what Steven Zacharius said, the almighty dollar isn't the only thing that counts.

Jude Hardin said...

Here's one that's currently ranked at #1,400,906. Took me about two minutes to find it.

I'm sure there are plenty with worse rankings, but that's a start.

Joshua James said...

again, the numbers I'd like to know from Steve are financial ones, I mean, what's the financial reason for publishing a book with his company?

I published a few books, starting a year ago, and I've already made more than most modest advances, and I continue to earn every month...

I'd be happy to entertain an offer from Steve, but I'd want to know why it's in my financial interest to accept it... so, Steve, why?

and why not publish the print version of Joe's books? They're already proven moneymakers, and Joe definitely has an audience... what would be your reasons for not taking him up on that offer?

The answers to those questions are the ones that probably interest most people...

I mean, the thing is, for a long time, publishers got to pick and choose who they'd work with, and it was mostly up to them...

It's kinda the opposite these days... authors can choose...

It's a business decision, in the end... why would it be in my interest, financially, to work with you with my books? Me or anyone else?

let me know and thanks...

Alice M. Roelke said...

That's easy, Joe! My book has the worst rank! :)

It's a children's SF mystery. To my knowledge, it's only sold one copy -- to me, to check formatting. I did manage to give away a few for free, and I got a nice review in the UK that way, but that's it. Rank is currently #1,580,025. I can laugh about this, which shows...something. I don't know what.

Angry_Games said...

At one time, one of my short stories was ranked #1,497,204

I've seen a book that was ranked 1,600,000+, and plenty in the 1 million to 1.4 million range.

Funny thing is, sell one copy, and my rank jumps from #1,497,204 to #220,000-ish. Two sales and suddenly I'm in the top 50,000.

Jude Hardin said...

Sorry, Alice, but I found one ranked way worse than yours. :)


But even if that's the lowest, I'm disqualifying myself from the contest. Just did it for my own curiosity.

Liana Mir said...


I haven't noticed any Kindle sales of this yet, only a tiny print.

Jackie Barbosa said...

If I'm not mistaken, a Kindle book has to have sold at least one copy in order to have a rank at all. In which case, even the lowest ranking title you find is probably not the "worst-selling" Kindle ebook.

AlexB said...

So far I've found #1,929,300

I did find a non-ranked one, but like an idiot I didn't note it down and now can't find it (and I saw several pre-orders that did have ranks).

Liana Mir said...

Well, true. I have two short stories for certain that have sold elsewhere but not on Amazon and they have no Kindle rank.

AlexB said...

oops, forgot to check whether it was self pub. It wasn't.

Michael J. Sullivan said...

Great post as always Joe. I too am confused as to why you can't get a print-only deal. You mentioned you've talked to a few authors that have - do you have any sense for how common/rare this is?

For my own part, I turned down a five-figure advance and instead went with a four-figure one to get a print-only contact. Truth be told, I would have done it with no advance. The distribution power of the traditional publisher combined with keeping 100% of the ebook seems like the winning combination for me. In addition, I also sold the audio rights - although now I'm thinking I should have gone the ACX route - and probably will in the future. Audio is going to be the new ebook and man you just can't beat the 50% - 90% royalty rates that ACX is offering.

Virginia Carmichael Munoz said...

I'm reposting a previous comment that I removed because I thought it didn't wasn't very kind. (Now, wait. I don't really care about being kind to publishing entities, only people. So, let me say I removed it because I thought it brought down the tone of the comments, and I was really enjoying the respectful dialogue.) Here's an edited version.

But first, Alan, my name is Virginia. :) I wouldn't object (I like the name Veronica and I answer to all sorts of names) but there's another Veronica posting and I don't want her to suffer your ire. Just addressing your question of whether I should have taken out a bank loan instead of receiving an advance... Not sure what country you reside in, but my banks charge a hefty interest. I also live debt-free, except for a mortgage. Taking out an enormous loan to pay for a college tuition is probably the next worst idea, right under reverse mortgaging your home. Seriously. If someone offers you an advance, please don't turn it down and go get a loan from the bank. The bank will make money, not you. Economics lesson for the day.

And the lowest ranking ebook is cracking me up! This is what self pubbers do for party games.

Ok, deleted comment below (just a mite nicer):

Virginia Carmichael Munoz said...

Joe, you're on.

As for why I went back, I knew I would catch a lot of flack from the industry I'd been touting as the next best thing since the wheel. And I have. But people told me I was insane when I crossed to self-publishing, and different people are telling me I'm insane for crossing back.

Yes to the heavy lifting. I couldn't do it all myself. I tried to hire the right people for editing and formatting of this series. (My historical series under Virginia Carmichael was wonderfully edited by Kathryn Frazier.) As for the Austen books, I paid for services that were less than satisfactory. As you know, there is only so much time we can spend typing e-mails and sending notes of 'problems found'. We need to write in order to produce in order to earn.
There is no reason on earth I would sell my historical series. It's perfect, established, and the paper copies (only earning a few hundred a book per month, but whatever) look very nice.
Side note: The Killion Group has done all my covers and they're gorgeous. I'm talking editing and formatting only, here.
New Austen covers are fine. I preferred the old. But they also gave me the chance to give input on the covers, which I liked.

Yes, big payday was a lure. I earned 20K on one book of the Austen series last year. Not huge, but keep going for the next few years and that's a tidy sum for the first of my SIX kids headed to college. The only problem is that although we're comfortable now (thank you, KDP), we've got someone headed to school SOON.

I treated the advance as if it was the only thing I'd ever earn from this series again. Some of the advance is tied to paper publishing dates, true, but they're all coming out in the same year. By the end of 2014, the entire advance will have been received.

My last published could stretch the money (from first signing, to proposal acceptance, to book acceptance, to publication, to first royalties) across 18 months. Nobody was going to college on that.

I freely admit it's a bit insane, but I've never been one to walk the line, so it works for us, right now.

As I said, dealing with nice folks on top of all the industry type decisions might just be the best part. I feel like my editor likes my books, not just tolerates them as part of her crappy day job. (I may be wrong. She could always pop in and defend herself.)
Flattery and attention? I hope not. As a former legacy author, you just might have worked with people who thought you couldn't write. I know I sure did. Being told to read some writing books didn't give me the warm fuzzies. That sort of ridiculousness is not happening with this team.
I may be the abused shelter dog that follows anyone with a kind voice and a dog biscuit, but I hope I'm a little more far-sighted than that. My bank account is my validation. (Feels awkward to say that, but remember, six kids to send to college.)
Again, excellent dialogue. As always, you've blown the discussion wide open.

Me again: I hope I preserved the previous post while raising the tone. I really do appreciate Steve coming here to dialogue. I only started in this business 5 years ago, but I clearly remember the 'don't ask questions, don't talk numbers, don't ask your fellow authors why you have 1.77% on your royalty statements' shock.

In self publishing, it takes guts to share numbers. They're not always pretty. but I'm eternally grateful to Courtney Milan, Marie Force, and JA Konrath for pulling the veil off the business of books. Without their savvy innovations, I'd be one of those making under 1K a year, instead of ten times that.

Virginia Carmichael Munoz said...
This comment has been removed by the author.
Gary Jonas said...

Worst rank I've found on Kindle is this one:

Amazon Best Sellers Rank: #2,053,567 Paid.

I will point out that this won't tell us how many ebooks are on Amazon because there are plenty that have never sold a single copy. It will give us an idea of how many different ebooks have sold, though.

Anonymous said...

To Courtney Milan- thank you for your comments on simple choices made in how you format your ebook vs traditional publishing houses that you know work (list of books by author at the end instead of beginning). I would love to hear your top ten list of marketing ebooks that you've learned over the years.

To Joe- thank you for your generosity with this blog.

Virginia Carmichael Munoz said...

Shoot. So sorry about the multiple posts. :D

Marilyn Storie said...

Looking for some guidance (seeing dog who works cheap).
I am one of the authors flipped to Amazon when they bought out Avalon Books two years ago.
I paid no attention to their correspondence at the time -- I figured it was just about switching slave masters -- and promptly forgot about it.
I had no inkling of what was going on in the real world, let alone the publishing world, because I'd been off-line for a few years. Well, to be squeaky honest, I benched myself for a whole decade (long story; will never ever do it again.)
So I recently sent Amazon a dog-ate-my-homework letter and asked for the dotted line to sign so I could get set up for royalties and payments.
Today, to my embarrassment, while sorting through the piles of kibble and paper in my spare room (some people have a junk drawer -- I have a junk room), I discovered a second letter they'd sent which did have a dotted line for me to sign (somewhat stained with ketchup). It also asked to buy my book e-rights.
Am I crazy to sign this now? They sure weren't offering 70 per cent back then (that deal came after former Avalon authors signed on the dotted line -- unless they had a junk room,too).
I should add that I plan on publishing a fair swot of e-books with Amazon over the next few months(guess what writers do when they're off-line?) as soon as I finish brushing up on the Brave New on-line World.
Absolutely first-class blog, by the way, Joe.

Colleen said...

As another avid reader (and not a writer), I echo cinisajoy - I can't afford traditionally published books and so only buy secondhand. I hate that writers don't make a penny on that, but my reading habit is an addiction... I want to add that I still buy a few paper books - habit again, I think, because I recently realized that I haven't read a paper book since I bought my kindle. Because of that, I just sold somewhere around 40 bags of books back to the secondhand store. I kept the paper TBR pile - (okay, I kept more than that) - I may yet read those. Then again...

Colleen said...

I wasn't clear - when I buy new, it is SP ebooks, and I am SO happy to be able to do that - the SP ebook is less than the cost of a secondhand paper, AND the writer gets his share. Win/win, IMO.

Gary Cecil said...

Great stuff today!

Veronica - Eloheim said...

I would suggest that you contact The Passive Guy over at The Passive Voice before you do anything.

Not only is his blog a must read for authors, he is a contract attorney and his wife is a SP author.

I had the fortunate need to speak to a contract attorney and PG was super easy to talk with and I feel very happy with the experience.

Judith said...

I give Zacharius props for wading in & being civil, but that's about all. His arguments were all about FUD - fear, uncertainty, doubt. What happens if Amazon's mask drops and it's really Godzilla!!!, etc. I didn't see that he ever, ever dealt with the current publishing conditions for authors in legacy publishing.

I would question his business judgment. Self-publishing is spreading, not shrinking. Whatever happens to the Big 5, authors are, in general, going to be taking more control, not less. He's behind the curve, at a minimum.

Marilyn Storie said...

Veronica, thanks for the tip.

Paul Draker said...

Here's an interesting observation, exaggerated to make a point. And indies aren't limited to either/or, but:

Picture 2 newbie writers, each making exactly the same money - $100K or $10K or $1K. It doesn't matter. For now, also ignore whether they are trad-pub or self-pub or hybrid.

One author earns that money by selling $10 ebooks.
The other earns that money by selling $1 ebooks.

Who does better long-term?

You can argue the $10 author, whose work has "higher perceived value."

But I'd say there's an argument for the $1 author.

The $1 is gaining readers and die-hard fans at 10x the rate of the $10 author.

Think about that for a minute.

Anonymous said...


As a publisher and as someone who wants their authors to succeed, you had an opportunity to push people to his/her book. You missed.

I tried searching Pino and Franco historical romance on both and No luck.

A 6K isn't even searchable...

D. A. Casey said...

You can find the current number of eBooks in the Kindle Store by going to this page: Kindle Store > Kindle eBooks

You'll see the total number of eBooks listed near the top of the page:

Showing 1 - 16 of 2,389,865 Results

The worst performing Indie eBooks have no ranking, because they have no sales. Pick any Indie eBook with no ranking, and you've found the worst performing one. (These are all tied for worst until they have their first sale and are assigned a rank.)

Thanks Joe and Steve for taking the time to share this discussion with us. Very interesting.

And Joe, is there a sequel to Origin? (Loved it, BTW)

Anonymous said...

Nail. Coffin. Use the shovel.

"Joe: Steve, it sound like your premise is, "Sign with us for less than Amazon is offering you right now, because one day Amazon may offer you less like we do right now."

I'm sure you see that's a flawed premise.

Kensington's strength is paper sales. That's how you'll attract authors. I'd be thrilled to do a print-only deal with Kensington, and I could introduce you to fifty of my bestselling author friends who would also be thrilled to do deals with you. If you wanted to, Kensington could be the de facto print-only publisher for the biggest names in self-publishing. You wouldn't get any of our ebook rights, but that should be okay because they're only 30% of the market according to your stats."

This could be the biggest opportunity for Kensington right here. Seriously. And it's win-win.

It will also show if all the babble was complete bullshit. My guess is that they need ebooks to survive, and self-publishers know this. 8-track tapes, mds, tapes are done. CDs and DVDs are almost done. We live in digital world. The paper world is dying. Look at newspapers. Publishers are in the same boat. Shipping paper, using ink doesn't make sense. Newspapers and paper books with be a niche market in the future.

Heidi Joy Tretheway said...

Here's why I haven't spent even ten minutes trying to get traditionally published (and instead am working on my fifth self-pubbed book now):

Profit = price minus cost of production.
Put another way,
My gross pay = my book's royalties minus whatever I spend to create and market it.

I've found it possible to hire a strong developmental editor, copy editor, proofreader, cover designer and blog tour coordinator for under $2,000 total. They make my books look amazing and the editing beats the heck out of some (traditionally published) bestsellers in my genre.

So, I can create and sell my books much more cost-effectively than a traditional publisher--I earn out by selling just 1,000 copies, and everything after that is gravy.

This is why I'd rather stake $2,000 of my own money for a chance to royalties forever, than take a traditional deal that takes far longer to earn out, slashes my royalties and removes my control.

P. S. Power said...

What will we do when there are 250,000 e-books offered by different authors?

Here's the secret, it won't matter. The way all the big book services show up, you only over compete with a small number of books for shows. Generally the most popular.

What's that number? For Amazon it seems to be weighted, with books in the top 100 best seller range getting about 40% of the shows. (Think about it... You see them all the time.)

The next thousand gets about ten percent of the whole and it goes down from there.

If you can make it into the big times, you sell well suddenly, because you get seen. If you don't, you sink like a rock, no matter how good or bad you are. Most of the midsection is made up of people that struggle hard enough to just manage. The top 10,000 or so sellers. (This might be larger, but that isn't the point.)

If you can swim, then it doesn't matter how deep the water is.

If you can't, it doesn't either.

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