Indies Eat Publishers Lunch – A Semi-Fisking of Michael Cader

Michael Cader has a two part report on Publishers Lunch, opining on Hugh Howey's and Anonymous Data Guy's Authors Earnings website.

The second part of his post is behind a paywall.

Now, I dislike paywalls, in much the same way I despise DRM. But Cader is entitled to try to earn a living, and if he wants people to pay for his silly opinions (unlike me, who offers silly opinions for free), that's his prerogative. So rather than fisk him word-for-word as I'd normally do, I'm going to respond to specific excerpts according to the doctrine of Fair Use. If Cader, or anyone else who has read his complete piece, feels I'm missing his point or taking things out of context, feel free to chime in and correct me.

Michael: It's a quiet "news" day, so we're going to start looking at what a lot of people have been talking about this week: bestselling self-published author Hugh Howey's "Author Earnings" website and "report."

Joe: Congrats, Michael! In the first five words of your post, you managed to marginalize and denigrate Hugh Howey and his report not only once, but twice.

First, by claiming that the only reason you're deigning this topic worthy of your time is because it is a quiet news day. Perhaps because there was no collusion to report on, or because Turow has been blessedly quiet lately. But we know the truth: Howey's report was so popular his server crashed (over 50,000 unique hits in four days) and I haven't seen Twitter and Facebook activity like this since the DOJ ruling.

Second, by putting "news" in quotes, you're slyly stating that Howey's report isn't news at all.

Which amuses me, because that's my feeling about "Publishers Lunch." And for the record I only read your article because I was looking for a decent critique of Howey's new venture, but I found you instead.

Michael: That information is being presented as revealing "data" about how the ebook world really works.

Joe: Actually, Hugh's info is being presented as revealing how big a portion of Amazon's sales are self-published vs. legacy published, while estimating how much authors make off of each type of publishing. Because Amazon is very often the largest generator of author income, authors are very interested in this information. Which is why Hugh and Data Guy named the site "Author Earnings" and not "How The Ebook World Really Works."

I'm "also" going to sponsor an "intervention" to get you to stop abusing "quotation marks".

You're "welcome."

(And don't take this "personally." I'm only "kidding.")

Michael: At the end of the day, asking questions and challenging assumptions ought to be valuable for us all. Sometimes being provocatively wrong is a very effective way of getting people to re-examine their assumptions.

Joe: Agreed. But not always. For example, right now you're being provocatively wrong, but your two part article didn't effectively get me to re-examine my assumptions. What it did was help me cement the opinions I already had about how the legacy industry tries to explain away its mounting fear of the future by using incomplete data (the same thing you accuse Howey of) to further your own agenda.

Can we agree that Howey's agenda differs from yours? For example, www.authorearnings.com requires no subscription, nor a paywall.

Michael: The primary reason we do not have deep data and transparency about ebook sales, in both units and dollars, is because of Amazon. They keep their data private for competitive advantage in the marketplace, plain and simple. (BTW, if Amazon were to disclose their data in a Bookscan-style system, the other major players would happily participate.) 

Joe: I'm transparent with my numbers. So are many self-published authors (search Kindleboards.com for "sales thread"). We get clear, detailed reports from Amazon, and we share them publicly.

Do you know who doesn't share them?

Publishers.

Publishers, who are getting the same reports from Amazon as we authors get.

I post my numbers, down to the annual unit sales per title. The Big 5 don't post theirs.

And I bet any of the Big 5 would throw a huge hissy fit if Amazon suddenly put out a press release saying "Simon & Schuster Sold X Number of Ebooks This Quarter."

Publishers have a hundred year history of keeping their data private. And not only private, but cryptic and often indecipherable, as any author reading his bi-annual royalty statement can attest to.

Publishers didn't invent Bookscan. They've never been forthcoming with their sales figures. Hell, you can't even get a straight answer out of them as to exact print runs. There is NO WAY they'd ever start sharing information as you suggest. If they did, Amazon wouldn't have to share numbers, because we'd all have the same information Amazon has. We'd have even more information, because publishers could also reveal their B&N, Kobo, and iTunes sales.

And when they do, I'll ride a flying pig through a snowstorm in hell while wearing a T-Shirt that says "I Was Wrong".

Michael: In this digital age, we don't see why authors should have to be in the dark about real sales on the site that works so hard to secure their trust as the *exclusive* venue where their product is sold. Those half-a-million exclusive authors should not stand for fake data and merchandising lists.

Joe: First, do you have proof that Amazon releases fake data? Are you insinuating (or accusing) that they manipulate their lists? Earlier you said:

"But Amazon's hourly bestseller lists are a merchandising tool, controlled by the site according to their own black box methods and designed to drive their company agenda -- which includes selling more ebooks, and whenever possible increasing the share of KDP and Amazon Publishing titles on their own site."

Can you back that strawman up with facts? You're implying Amazon uses bestseller lists as a tool to their advantage, ergo Amazon is falsifying these lists. You understand how that is disingenuous, and a logical fallacy, right? You created your own reality and then refuted it, with no proof to back it up.

I mean, do you have reason to believe that Amazon's bestseller lists are based on write-in estimates by a few key retail outlets, like the NYT Bestseller List does? I could see how that would make a person mistrust a bestseller list. But where is your evidence Amazon does something like this?

It also seems like you're saying Amazon is the secrecy culprit while giving legacy publishers a free pass, Amazon keeps data private for a competitive advantage (without mentioning publishers do the same), and Amazon is the reason for all the secrecy in the industry (it isn't). 

Second, Amazon isn't keeping authors in the dark. All authors, like all publishers, know exactly how much they sell on Amazon. Amazon simply isn't sharing its view of the complete picture with anyone, and doesn't tell Peter what Paul made. Pretty much like most companies in the world.

And now you switched from "quotes" to *asterisks*. But is that really *better*? Doesn't Publishers Lunch have italics?

Also, be careful what you wish for. Amazon could someday release numbers, and their data could make Hugh Howey's data look understated.

Do you really want to know how big the self-publishing shadow industry is? If Amazon did release that data, how would you and your legacy pundit peers explain it away if it showed how much self-pub authors are earning compared to legacy authors? Would you dismiss it by saying it is fake? By saying it is only a small percentage of the whole industry? By saying ebooks only account for a fraction of all sales? By citing alternate sources of data?

In other words, many of the things the legacy industry is doing right now to discredit Hugh's findings.

Michael: the US market data clearly indicates that dollar growth has declined significantly and the ebook market has been roughly flat for a while. That leads people to speculate that self-publishing and/or small unreported publishers must be growing at a far faster rate and taking share from the publishers who do report their sales -- even though there is no hard data to support this, and as I'll show later on, the indicators we have, which are pretty good, specifically refute it.

Joe: I was under the impression that ebook growth is slowing, not flat.

And which publishers report their sales? Can you point to a publisher that admitted how many ebooks they sold in 2013? I don't mean percentage or growth. I mean unit sales. I can point to many authors, me included, who share that info. Why not legacy publishers?

Michael: The best data we have for US ebook sales comes from the monthly AAP reports. It comes directly from the largest publishers and distributors, and covers roughly 1,200 publishers in all. The AAP has good, consistent data from that set of companies going back three years, starting in 2011.

Joe: Hmm, the AAP never asked me for my data. And I bet Amazon didn't give them any data either.

But even if the AAP is beneficial to large publishers and distributors, it can't accurately guess at the size of the shadow industry of self-publishing, or estimate how much self-published authors are earning. So their data is largely useless to authors, whereas www.authorearnings.com is not.

Michael: For 10 months of 2013, AAP data shows that publisher dollar revenues from ebooks were down almost four percent

Joe: What makes you believe that the AAP data being down four percent for publishers means that all ebook sales are down four percent? Why do you think that represents the market for Amazon, or for self-pubbed authors? 

Michael: Here is where many people get tripped up. For publishers who report their results publicly in some fashion, almost everyone said ebook sales still rose in 2013, anywhere from 8 percent up to 24 percent (Simon & Schuster) or even 39 percent (HarperCollins). This is no way refutes or disproves the AAP data.

Joe: And now you're underlining.

So are ebook sales flat? Are they falling? Are they rising? And most of all, why do I, as a self-pubbed author, care, except in relation to how much money I'd be missing if I were locked into a legacy 12.5% ebook royalty rate instead of earning 70% self-publishing?

You quote a lot of data in this post, Michael. Where is your data that convinces authors to take legacy deals? (Hint: that's what the www.authorearnings.com data is doing.)

Michael: People read that the ebook market is flat (or declining), decide that does not correspond to their personal habits or beliefs, and then turn to conjecture rather than data for a reason. One reason they come up with is that it must be that self-publishing has become so huge it has overtaken the market and that's where all the growth is. This is fed by Amazon PR stories that are entirely in the etailer's self-interest.

Joe: You posted a lot of data on your site that I omitted because:

1) I respect your paywall and copyright and the work you put in and

2) It bored the shit out of me

Using that data, you made a rational argument that there could be other reasons for ebook sales being flat/rising/falling other than self-publishing sales affecting them.

But why do I care?

I care about how many self-pubbed ebooks are making money, not about if the legacy industry is experiencing growth or not.

I know you write for "Publishers Lunch" not "Authors Lunch" so it makes sense that you'll try to quell some of the obvious panic happening in the legacy world as a result of Hugh's report. But if you truly want to reassure the legacy industry that "*all is well*", gather some data as to why authors should continue to submit to them. Because Hugh's data, my data, and recently Edward W. Robinson's data all show that self-pubbed authors are faring very well.

All you have to do is look at some Amazon bestseller lists and count how many indie publishers are on them. It'll take you ten minutes. I've been doing it for years.

Michael: One reason they come up with is that it must be that self-publishing has become so huge it has overtaken the market and that's where all the growth is. This is fed by Amazon PR stories that are entirely in the etailer's self-interest.

Joe: As opposed to stories that are entirely in the legacy publisher's self-interest? Like your post here. Or the DBW survey, which is called What Advantages do Traditional Publishers Offer Authors.

Michael: The more logical conclusion, as I have set up and will now demonstrate, is that self-publishing is probably just like those other segments of publishing: It grew some, and outperformed the total market, thanks to the reallocation of dollars, but is in no way disproportionate to what other actors saw. And every indication we have shows us that either a) self-publishing is not big enough that significant growth here would change our profile of the total market, or b) self-publishing sales were just like AAP sales in 2013.

Joe: Self-publishing most certainly has changed the legacy profile in the total market, and has done so in a significant way. I made a million bucks in 2013. That means I grossed about $1.4M. If I'd been legacy published, some lucky legacy publisher could have added $525k to their profits.

Instead, they derived $0 from me.

Is that significant? To the Big 5, probably not.

As for demonstrating that self-pubbing is like other segments of publishing, let's look at the "data" you have to support this claim.

(See what I did with the quotes there?)

Michael: (Smashwords) total sales were $20 million.

Joe: So that's over $10M legacy publishing missed out on, just through Smashwords.

Significant yet? Probably not. But let's keep going.

Michael: If you posit that Smashwords is only reaching a third of the market for their authors (so triple their gross, to $60 million), and then you postulate the total self-publishing market is three times bigger still (500,000 KDP exclusive authors, plus 275,000 Smashwords authors), you've talked your way to a market of $180 million or so.

Joe: And if I posit that Smashwords is only reaching 1/100 of the market (so multiply their gross by 100, to $2B) we can both prove that we're pulling random numbers out of our asses.

But for a moment, let's look at your $180M self-pub market.

That's over $90M missed by publishing. Is that becoming significant yet?

Here's the thing, though. I can probably calculate $180,000,000 in self-pub revenue just totaling up people I know. Hell, I'm just 1/180 of that all by myself. And there are 2.4 million ebooks on Amazon, and more elsewhere.

Amazon, in a rare case of revealing data, mentioned there were over 150 authors who each sold over 100,000 ebooks in 2013. That's 15 million ebooks that legacy publishers didn't sell. And those are only 150 authors.

But earlier you discounted PR stories released by Amazon as "entirely in the etailer's self-interest."

Well, c'mon, Michael. Make up your mind. Do you want Amazon to disclose data, or not?

Now let's take a closer look at Hugh Howey's data. According to Data Guy:

"Our sample of the top 7,000 Amazon genre e-book bestsellers alone--just the small sample we took--adds up to $185M/year when the daily SP revenue is multiplied by 365. It's right there in the spreadsheet we shared: the indie part of our sample adds up to $500,000 /day in gross dollar sales."

So just the top 7000 authors in a few genres on a single retailer are doing better than your predicted $180M a year for the whole shadow industry of self-publishing.

How about the other 2.4 million ebooks for sale on Amazon that weren't counted in Hugh's spider crawl? And all the other etailers? Could the true annual ebook author revenue be triple what those top 7000 Amazon authors are making? What if the actual figure is $540M annually?

Is legacy publishing missing out on $270,000,000 in profits per year? Is that significant?

Next you talk about Nook, and flattening ebook sales, which may matter to publishers but is hardly representative of authors who are paying bills selling on the Nook.

You also talk about the USA Today bestseller list. I don't know how the list is compiled or weighted. I don't care. I made a million bucks last year and didn't appear on the USA Today list, even though I was an Amazon Top 100 Author dozens of times, often selling thousands of ebooks per day.

You also talk about Bowker and Codex and yes, I get it. Publishers Lunch is for publishers, and you can cite sources that show publishers they need not be concerned about the self-publishing revolution by going into explanations about how growth is flat or rising or falling.

Authors. Don't. Care.

Studies and surveys and polls about ebook sales only matter to authors in terms of how much the author pockets.

And since publishers make their living off the backs of authors, perhaps they (and you) should be less concerned with what Peter Hildick-Smith is tracking, and more about what Hugh's and Edward's data shows: lots of self-pubbed ebooks being sold. Self-pubbed ebooks that earn 70% of list price for authors, not 12.5% of list. Self-pubbed ebooks that are taking up a good deal of real estate on Amazon's bestseller lists—real estate once entirely occupied by legacy publishers.

We don't care if Amazon only tells part of the story. We just care about the part of the story that concerns us. The majority of authors I know make the majority of their income on Amazon. www.authorearnings.com is compelling authors to choose self-publishing as not just a viable alternative to signing with the Big 5, but as a far superior alternative.

How many millions of dollars does the legacy industry have to miss out on before it recognizes the threat of self-publishing?

How many authors, like me, does it have to lose before it starts offering authors better contract terms?

I don't have answers to those questions, but I do have an answer to this one:

How many apologists citing surveys are going to eat crow when the legacy publishing industry collapses?

Answer: All of them. And you'll have no one to blame but yourselves, because I've been telling you this since 2009.

Whose position is gaining favor with authors, mine or yours?

Addendum

I sent this post to Anonymous Data Guy to make sure I wasn't off base with anything I said, and he allowed me to share another two data points:

"The gross self-published sales in the soon-to-be-released 50,000-book spider run from February 7 add up to $615,000 / day.

That's a $225M/year run rate, and it's just a partial look at the top (all-genres) indie bestsellers on Amazon. The $225M ignores many hundreds of thousands of indie books that weren't on the Amazon bestseller lists, because they were only selling only a few copies per day, per week, or per month. I'd conservatively put Amazon self-published gross sales at a minimum $400M-$600M/year run rate right now.

Depending on how many low-volume sales are happening of the 2,350,000 other books deeper in the long tail and thus invisible when spidering the Amazon bestseller lists, the true indie total may be 25%-50% higher than that – I wouldn’t be surprised if it was $750M a year already."

Is this significant yet? Should legacy publishers care?

How about this:

"Here are the numbers from the first 878 respondents to the voluntary survey on authorearnings.com:

In total, the 767 survey respondents so far who had self-publishing revenue last year earned $49.7M. 

At 70% Amazon royalty, that’s at least $71M in gross self-published sales – or more, if a substantial portion were low-priced books at 35%.

That $49.7M self-published author revenue averages to $64,880 per self-published author responding.

The 223 survey respondents so far who had trad-publishing revenue last year earned $10.3M.

That's an average of $46,330 per trad-published author responding.

In total, the 876 respondents that had self-publishing revenue earned $4.7M in January. At 70% royalty, that projects to $80M.

And it projects to $64,390 per self-published author responding, which is very consistent with their figures for last year."

What if those legacy published authors had made 70% royalties instead of 12.5%? I bet they're thinking that very thing. They're looking at their print sales (if their bi-annual royalty statements are clear enough to define them) and that big minus column of paper returns, and then staring at their ebook royalties and wondering "why the hell do I keep taking legacy contracts?"

I understand this isn't a random sampling (which was one of the flaws with the DBW survey) but this data is telling authors (for free) some very provocative things. 

Michael, I really, really do understand why you went to great lengths to cite numbers and assure the legacy publishing industry whatever it was you were trying to assure them. They're the ones who subscribe to Publishers Lunch for $25 a month.

Now I must ask you, since self-pubbed authors make 5.6x as much as legacy pubbed authors on equally priced ebooks, how would you like to make $140 a month for a PL subscription instead of $25? Would you want to know more? Would you want to know if others were doing just that? Would you like data that shows how others are actually doing it? How would you feel if you made $25 from your work, and your domain provider made $115 for hosting it? Would you feel ripped off? Would you be looking for a new domain host?

That's the real danger of www.authorearnings.com. There is money being earned by legacy publishers that could be earned by authors. Food actually being taken from authors' mouths.

I can reach more ebook readers than a legacy publisher can, and I can make more money per sale. I don't need them anymore.

Publishers Lunch needs them, to stay in business.

Mike Shatzkin needs them, to pay his consulting fees.

Gottlieb, Zacharius, Curtis, Lipskar, Gernert, Maass, Turow, Russo, Patterson, Raab, many of the AAR, and many of the Authors Guild need them, because they pay the bills.

But authors don't need the legacy publishers. We haven’t for years.

Know who else doesn't need legacy publishers? Amazon.

Because if the Big 5 fail, Amazon will still be able to publish authors and their books, either through KDP, A-Pub, or via buying the entire backlist.

The legacy industry was once essential to publishing. Gatekeeping middlemen that controlled a quasi-monopoly on the distribution of paper books. And writers were exploited.

But legacy publishers aren't essential anymore. They're an option. And not a very attractive option at that. We can actually be fully independent of legacy publishers.

So you can keep reassuring your clientele that all is A-OK. Or you can give them some advice worth their $25 a month. Namely; if they don't start treating their authors better, they aren't going to have many authors left. They aren't going to stay in business banking on authors taking unconscionable deals because the authors are too dense to know any better. That isn't a smart long-term plan.

Then again, it makes no difference to me whether you warn them or if they stay in business. I'm just here to freely share my information with my peers. Because pain shared is pain divided, and joy shared is joy multiplied.

Don't worry about sending me $25 for my advice. I'm already making 8x what I once did within the legacy system.

And thanks for your "thoughts" on this matter. :)

Guest Post by Curtis Edmonds

From author Curtis Edmonds.

What I've Learned From One Year of Self-Publishing

I self-published my debut novel, RAIN ON YOUR WEDDING DAY, one year ago today, on February 17, 2013. That was a mistake.

What I meant to do was launch RAIN ON YOUR WEDDING DAY on March 1. In order to prepare for that date, I uploaded the Kindle version of RAIN ON MY WEDDING DAY to Amazon on February 17. I wanted to have a page ready to go on Amazon so that people could pre-order the book before the release date. Except that I couldn’t figure out how to do that. (You may not be able to; I’m not sure.) So when you look at the Amazon page for my book, it says it was published on February 17, not March 1.

That was one of the many mistakes that I made with RAIN ON YOUR WEDDING DAY. It wasn’t my first mistake, and it wasn’t the last one. In the past year as a self-publisher, I have made a lot of mistakes. Some of them have cost me time, and most of them have cost me money in some way.

I read Joe’s blog, and other resources, trying to figure out what I needed to do to get my book to market in the best possible way. I still made mistakes. Most of them were well-meaning, I think. I like to think I’ve learned from them, and I am hoping not to make those same mistakes with my next novel.

In this post, I cover four things I did with RAIN ON YOUR WEDDING DAY that turned out to be mistakes, and discuss why I am not going to repeat them. (Two quick caveats, though, before I start. First, these were not all of the mistakes that I made, only the ones I am comfortable telling you about. Second, if any of these things sound familiar, but they worked out for you in your career, that’s fine. I am just talking about what I think I did wrong with my book.)

MISTAKE NUMBER ONE: I wasted a lot of time before I got RAIN ON YOUR WEDDING DAY published.

I finished the first draft of RAIN ON YOUR WEDDING DAY in March of 2011, about two years before I self-published it. I recognized right away that the book needed some work, so I hired a copy editor. Around the same time, I hired another freelance editor that I knew to take a look at it as well. It ended up that I was doing two rounds of revisions on the novel from two different editors at the same time. This was not a good idea.

After I got the novel into shape, I started querying on it. I did my querying slowly, taking my time, researching possible agents. I found an agent early on who asked to see the full manuscript, and I stopped querying at that point. She ended up passing on the book. After that, I went to a writer’s conference in New York, met with some agents, and decided that the novel needed more work. I spent the winter of 2011-12 on revisions, and then started querying again. I got a couple of nibbles from other agents, but they passed on it as well.

I eventually hired a developmental editor to help me polish the book. He worked on a couple of chapters, and then decided that he didn’t have time to finish, and refunded my money. So I hired another developmental editor who helped me out a great deal. Once I worked through those revisions, I started querying again in the fall of 2012. Again, a couple of agents looked at the full manuscript, but none of them decided to represent me.

I decided to self-publish in January 2013. I hired a cover designer who put out what I still think is a great cover. I hired someone to format the book for me. Six weeks later, RAIN ON YOUR WEDDING DAY made its debut to an indifferent world.

I made three rather large mistakes here. First, I wasted a lot of time and effort hiring all these different editors. I think I got my money’s worth out of all of them, but the entire editing and revision process ended up taking a lot longer than it needed to. Second, I drizzled out the query process for far too long. I basically stopped querying whenever I got a request for a full manuscript. This was not a good idea. And finally, since I was spending all my time on revisions and querying, I wasn’t writing anything else. I didn’t start on my next book until last summer, and I only finished the first draft in January 2014.

What I’ve learned: Once I get my first draft polished, I am going to hire one editor, and then query to see if I can interest an agent, and if that doesn’t work, I am going to try to get the book ready for publication as quickly as may be. But not too quickly. Why?

MISTAKE NUMBER TWO: I got RAIN ON YOUR WEDDING DAY published much too quickly.

And yes, before you say anything, before you say one single word, I recognize that this mistake cuts against the previous mistake. I get that. Really. Here’s the thing. Once I decided to self-publish--that is to say, once I realized that the very last lingering opportunities to get my book traditionally-published had burned away--I did it in kind of a big rush. I got the cover designed and the book professionally formatted and did everything I could to make the book presentable and desirable. And then I got a little impatient. I put the book up on Amazon without doing anything much to promote it ahead of time. I did a cover reveal on Twitter and mentioned it on Facebook but otherwise didn’t let anyone outside of my social media following know that the book was coming out.

This was a mistake, and it showed up in early sales. By which I mean there weren’t any sales, or not very many, not at first. Since there weren’t any sales, there weren’t any reviews, so the few people who looked at the Amazon site didn’t know if the book was any good or not. Not to mention BookBub (just to name one example) requires a minimum number of reviews before you can use their service.

Over the last year, over a hundred people have reviewed RAIN ON YOUR WEDDING DAY on Amazon, and more than half of them gave the book five stars. But it would have been helpful to have at least some of those reviews in place before I launched the book.

What I’ve learned: This time, I am going to contact the book-bloggers that have reviewed RAIN ON YOUR WEDDING DAY and let them know that the new book is out, and contact some additional bloggers as well. I am probably going to try to build buzz on Goodreads through a giveaway. I am going to have at least some kind of plan in place for marketing, which I didn’t have at all for RAIN ON YOUR WEDDING DAY.

MISTAKE NUMBER THREE: I didn’t put RAIN ON YOUR WEDDING DAY in the appropriate category on Amazon.

This makes me sound slightly more stupid than I actually am, so let me tell you a little about my novel, first. RAIN ON YOUR WEDDING day is the story of Will Morse, a former NFL player who has had three of his four children die. Will is estranged from his fourth child, who seeks to reconnect with him on the eve of her wedding. He is wracked with pain and anguish and guilt, and spends most of the story in an isolated cabin in North Georgia, brooding over his losses. It is--and I say this as the author, and an advocate for the novel--a bit of a downer.

When I tried to pitch RAIN ON YOUR WEDDING DAY to agents, I had the idea that it was in the genre of upscale commercial fiction, like The Kite Runner or something. You could call it “book club fiction” if you wanted to. The only problem is that when you list a book on Amazon, you can’t list it under the category of “upscale commercial fiction,” because it isn’t there.

I listed RAIN ON YOUR WEDDING DAY as women’s fiction. I did this because I hoped that women would buy it. (This seems to have been a good decision--the people who have the book listed as “to-read” on Amazon are overwhelmingly female.) I also listed the book as literary fiction, even though it really isn’t, because I liked the idea of being a literary fiction writer a lot better than I liked being a women’s fiction writer. And in the description, I said that the book was a “modern Southern gothic” novel, which I guess could be a genre if there were other books in that genre, but I don’t think that there are.

What I learned: My next novel will be listed firmly within a recognized genre that is going to help me sell books. That gets me into the next mistake.

MISTAKE NUMBER FOUR: Since I didn’t realize what genre I was writing, I didn’t conform to the basic conventions of that genre.

I read my reviews. I treasure the good ones, and I try to learn from all of them. What I learned was that some of my readers considered RAIN ON YOUR WEDDING DAY to be a contemporary romance. I never thought of the book that way. I never queried it as a romance novel. I would not have ever imagined myself writing a romance novel. And here I am, and people are calling the novel I spent years on a “romance novel,” and I am sort of, well, not horrified by that. (Whatever you think of the “contemporary romance” genre, it sells more books than “modern Southern gothic” does.)

The other thing that some of my reviewers were telling me was that they don’t usually read books by male authors featuring male characters. They’d made an exception in my case, and they liked my book. But I came to the conclusion that if these reviewers were somewhat turned off by having a male protagonist in a contemporary romance novel, there were at least some people out there who didn’t read the novel because of who I am and who the protagonist is.

I am not criticizing anyone on their reading habits here. People can read what they want, with whatever characters that they want. But if I’m in the business of selling romance novels--and it appears, to my great and unending surprise, that I am in the business of selling romance novels--then I need to do a better job of managing reader expectations.

What I learned: The next novel has a female protagonist. It also means that I am thinking about writing it under a female pen name. I cannot tell you how thrilled I am about this, but if it helps me sell more books, I have to at least consider it.

A BRIEF CONCLUSION: Thanks if you’ve read this far (and thanks to Joe for letting me post here).

RAIN ON YOUR WEDDING DAY has not, so far, been a success. I have not quite made back the financial investment I have put into the book, and there is every possibility that I won’t. I have given away far more copies than I have sold. If the information in most surveys is correct, I have probably sold about an average number of copies for a self-published novel, which of course is not very many.

I am not happy about this. I am glad that I chose self-publishing over the alternative of leaving RAIN ON YOUR WEDDING DAY in a drawer somewhere, and I’ve been very gratified by the great reviews the book has received, but I am unhappy that it didn’t sell as well as I thought it might.

But it’s only been a year. I hope to have the next book out before too much longer, and that should help sales. Maybe I’ll get lucky. All I can do is try to write the best books I can, and do my best to find an audience, and identify the mistakes I have made so far and try not to repeat them. I don’t think that’s a formula for success, necessarily, but maybe it’s a formula for avoiding failure more completely.

Joe sez: I try not to give unsolicited advice when someone guest blogs. If Curtis wanted my opinion, he could have asked for it.

That said, I'll offer some general advice that I believe all new authors can benefit from. If your well-reviewed book isn't selling:

1. Change the cover. You may think you have the greatest cover in the world. And maybe you do. But I've changed covers on some of my titles more than four times. A cover image you like can be greatly enhanced with different font, added blurbs, different framing, etc. If your sales are weak, why settle?

2. Change the price. Try raising it. Try lowering it. Try putting it on sale. Try something.

3. Change the product description. Look at bestselling ebooks, and copy the style they use.

4. Change the category and keywords. This should be a no-brainer. Keep tweaking until you notice a boost.

5. Write more. Nuff said.

6. Don't give up. We all make mistakes. The goal is to learn from them and move on, rather than lament what was (or what currently is). Fix it. Change it. Experiment. Tweak. Evolve. Ebooks are forever. Every title has more than one change at success. In fact, it has many, many chances at success.

As I write this, my horror novel TRAPPED is #49 in the Top 100 Bestsellers thanks to a BookBub. It has gotten 570 reviews, averaging 4 stars.

This book was rejected by the Big 5, but it has cracked the Top 100 four or five times, months apart. 

Yesterday, RUN by Blake Crouch was in the Top 100. It has hit this list several times. And THE SEX CLUB by LJ Sellers is also in the Top 100... again. I've lost count of how many times I've seen her Detective Jackson Mysteries in the Top 100. 

In the old days, when the only way to reach readers was by tattooing ink onto dead trees, 99% of books sold best shortly after they were released. Then, if the author was lucky, sales would gradually trickle down to the point where it was regularly stocked on a bookstore shelf. If the author was unlucky, the book wasn't stocked anymore and went out of print. If they were REALLY unlucky, the book wasn't stocked anymore, but the publisher claimed it was still in print because the ebook was still available, and the rights never reverted.

These days, you can make a big splash during a book launch, but that isn't the only splash your book can make. Sales look less like a long tail, and more like a heart monitor, spiking every so often. 

This is a marathon, not a sprint. A lot can happen during eternity. In fact, EVERYTHING you think of can happen when infinity comes into play.

The trick is to be alive to see it happen to your books. And you can improve your odds by heeding my advice above.

Guest Post by Joshua Guess

I am a full-time writer today because of Joe Konrath. I know he would disagree, but I'd have never had the balls to publish my first book without a year of reading his blog under my belt.

It's been a strange trip. I started by creating a fictional blog set in the zombie apocalypse. I'd read Joe's thoughts on piracy and how giving your work away was the most efficient route to creating interest. That's what I did. I wrote a free-to-read blog about living in the zombie apocalypse and updated it often.

So often that after six months I had enough material to collect into a book and sell.

Those early efforts were rough. I never saw Living With the Dead as anything but writing practice. That came through in my work, if I'm being honest. The first few months were an exercise in sharpening my skills, which was easy because I had very little in the way of skills to start with. I put out that first collection and forgot about it.

The first month I made $70. I was surprised, because I was just this guy blogging after work, sitting on his couch and mainlining the morning repeats of SVU. Month two brought in about $400, a fact I was unaware of until the following month, because I never checked my sales. Month three doubled that number. By then I was nearing completion of a second collection of my blog.

Let's fast forward and summarize:

The first full year, I made $6,000 from selling eBooks. It wasn't life-changing money. I couldn't pay off my house with it. But for someone working in a nursing home making $11 an hour, it was nice. The second year brought $12,000. I was stunned stupid by this. I knew this as a rough estimate when I did my 2012 taxes, but seeing the number on the screen kind of blew me away. Because my wife and I are religious about overpaying, we got a nice fat return.

When I got my return back in March of 2013, I quit my job.

Which was a stupid thing to do. I swore I would keep working and only go full-time as a writer if I already had the sort of income from it that would allow me to do so. A combination of other factors forced me to finally take the plunge, and I'm glad I did.

I took that money and lived on it, along with an IndieGoGo campaign. I had written two novels outside my LWtD collections, the first of which I deleted because it was terrible. The other was an urban fantasy, a labor of love, that made me about ten bucks in a good month. My readers clamored for actual novels written in the zombie universe I created for the blog, and I decided to take a few months and grant their wish.

 Victim Zero was the result. Published in early June of 2013, and with help from a fellow author, the book did very well by my standards. Since then I've worked with that author, the excellent James Cook, on a collaboration set in his own apocalyptic world. The Passenger remains my favorite work. I got to write from the perspective of a thinking man trapped in the body of a zombie. Being along for the ride sucks.

In December I released Dead Will Rise, the sequel to Victim Zero. When I quit the nursing home last year, I expected to put out one novel and have to go back to work. Hell, I still might have to.

I haven't been back yet. My financial situation will take me through the anniversary of going full-time at the least. In 2013, I made $32,000 from writing. More than I made at the nursing home by $7,000.

And you know? I could have survived on less. I'd have been happy on less. My wife works and is very supportive. I'm living the dream because I took a stupid risk, one that (thankfully) paid off. My sales might taper off tomorrow and I might have to go back to a normal job. I recognize the fluctuations in the market. For now, everything is sunny.

I've been reading over Joe's recent spate of arguments with people in the legacy publishing industry, and I can't help but wonder how many people like me are out there. Instead of waiting for a short rejection letter—I have never submitted my work, and rejected two unsolicited offers for my work from publishers—to know whether my books were worthwhile, I let the readers decide.

More than that, putting my work out there was the best possible way to grow and improve as a writer. I tell my Facebook fans that the best part of this job is interacting with them, and it's the truth. Without their support, I'd still be working nights and wearing scrubs. But it goes beyond that. Because of the constant feedback from them, I've been able to learn and grow as a writer magnitudes beyond any vague criticism from a rejection letter.

My gatekeepers aren't some harried agent or editor sifting through the slush pile. They are the readers, many of them happy to give constructive, concise thoughts on where and how I can improve my game. The reason it's becoming harder for readers to immediately tell indies apart from legacy authors is because we have that edge. With on-the-ground feedback in real time, we can fix and improve much faster than they can. Victim Zero has been re-uploaded at least seven times since June, every time tweaked to be a better book.

I spend a lot of time on my Facebook author page, talking about projects and bouncing ideas off people. I'm at a place in my career where I have a small but dedicated fan base that isn't too big for me to handle. I can answer messages, reply to comments, and stay connected in a way Stephen King or another big name would have a hard time managing. Right now I'm hosting an open chat thread on my author page about my next novel, a book about superhumans. The feedback I've already had helped me catch flaws I would have otherwise missed.

Why does this matter? Because as indies, we don't have a buffer between us and the fans. There is no giant, approval-giving publisher accepting our books. I've read a lot of interviews with a lot of legacy authors, and on the whole I don't see them as active with their fans as most indies are. I think that's a shame, because it's super fun and one of the best ways to build loyalty.

It's the strangest thing—and Joe has been spot-on about it lately—that every time someone from the industry speaks up about eBooks, sales, and all the rest, they always seem to ignore the actual people creating their content. Joe is right, as he usually is: there is a revolution going on, and the industry is just now beginning to realize it. While it frightens them that people like Joe and Barry, who have been a part of the industry and ran from it toward huge piles of money, creative control, and self-respect, people like me should scare them a hell of a lot more.

I never even considered querying. I never for a moment thought it was a good idea to submit a book. I am not alone or in the minority of this generation of aspiring and new authors. It won't be long before the legacy system begins to shrink by means of implosion. There just won't be enough authors to support their massive and outdated infrastructure.

I won't cheer for that. Like most of the people that read this blog, I've been a voracious reader for most of my life. But I won't shed tears when it happens, either. 

Joe sez: Congrats on your success, Joshua, and I hope it continues.

I'm reminded again of the old song "How you gonna keep 'em down on the farm after they've seen Paris?"

There are still scads of newbie authors who write a book and are clueless what to do with it. Some may wind up at the Authors Guild blog, or an agent blog, or the woefully anachronistic Absolute Write forum, and think the only way to reach readers is to submit to the legacy system. Others, who have heard of self-publishing, may come across AuthorHouse and likely get ripped off, leaving them with a sour taste and an empty wallet.

But a few authors will find this blog, and find outspoken authors like Dean Wesley Smith, Joanna Penn, David Gaughran, Bob Mayer, Courtney Milan, Kris Rusch, and Hugh Howey, and hear stories about Amanda Hocking, HW Ward, Brenna Aubrey, Blake Crouch, Barry Eisler, HM Ward, Marie Force, Bella Andre, Selena Kitt, Liliana Hart, Chris Culver, TR Ragan, Russell Blake, Darcy Chan, BV Wallace, Michael J Sullivan, and so many others. And they will be inspired to self-publish.

Two things helped legacy publishers maintain a quasi-monopoly on the marketplace (a cartel engaged in kabuki competition) for so many years.

1. They controlled distribution to bookstores and libraries, and there was no simple, direct way for authors to reach readers without them.

2. They indoctrinated whole generations of writers with the nonsense that they had to find an agent and submit to a publisher in order to be considered a real author.

Magazines, how-to books, conferences, conventions, all perpetuated and glorified that path to success: Get an agent. Sell your book to a major publisher. Become a bestseller.

The propaganda they used, and still use, is pervasive, insidious, and widely believed. Vanity presses are making a fortune.The Authors Guild and the AAR are steadfastly pro-legacy. Industry pros try to marginalize the self-publishing option by crowing how 70% of books are sold in bookstores, stating that self-publishing isn't really publishing, pontificating that no one takes self-pubbing seriously.

Self-publishing is a shadow industry that has grown without anyone fully understating how big and powerful it is getting. Yes, every hears about the huge successes, but very few hear about authors like Joshua, quitting their day job, paying bills. How many like him are there? How many more who make just a $1000 a year, but that's enough to take the family to a nice meal once a month? How many are paying their electric bill, or affording an iPad, or simply smiling ear-to-ear because some complete stranger gave them 5 stars and a glowing review on Amazon?

This revolution isn't about Konrath making a million dollars a year. 

This revolution is about writers, for the first time ever, having power.

We have a choice. And it's our duty to make ALL writers aware of this choice. 

Visit www.authorearnings.com. Fill out the survey and petition. Link to it. Tweet it. Discuss it on Facebook. Speak out and tell your peers what your experiences are. Even if you make $10 a year, you're not a failure. Failure is giving up. Failure is handing your fate over to someone else. Failure is not arming yourself with information.

Ebooks are forever. Understand what copyright is. Understand that money flows toward the writer. Understand that the more control you have, the less likely you are to be at the mercy of others. 

The first step, in any revolution, is making the exploited aware of how they're being exploited. We have a growing body of evidence that shows self-publishing is good, and legacy publishing is exploitative. 

We need to share that evidence if we want change to happen. 

Tell your stories. Be proud of your accomplishments. Stop succeeding in silence. 

I used to tell an old joke about Smokey the Bear. His catchphrase was, "Only you can prevent forest fires." And I was going broke, spending 24 hours a day, 7 days a week, without sleep, running around the country preventing forest fires. Because only I can."

In 2009, I began to live that joke. I blogged about Kindle, and self-publishing, and was met with disbelief, disapproval, and outright scorn. I was called a liar, an anomaly, and outlier. My success was falsely attributed to my legacy background. When I suggested others try self-pubbing, I was met with fierce resistance. I was despised. 

But some people listened. Others figured out what I had without me. And soon there were a whole bunch of us, posting our numbers, enlightening each other. 

It took five years, but the legacy industry is finally engaging us. And they're scared. As they should be. Because without authors, they have nothing to publish. And the more authors who know how easy it is to self-publish, and how unconscionable those legacy deals are, the better off we're all going to be. Legacy publishers, when faced with fewer and fewer quality submissions, will either have to change their terms, or perish.

The more writers who understand this, the better off we all are.

Talk about it. Be proud of it. Fight bullshit when you see it. Educate those who don't understand it. 

www.authorearnings.com

The exploitation of writers stops, right now.

A Case of the Shatz - Fisking Mike Shatzkin

Mike Shatzkin, sounding more and more like an apologist and less like the forward-thinker he's been in years past, took a stab at poking holes in Hugh Howey's new www.authorearnings.com endeavor.

In the comments, Hugh gracefully said he agreed with 86% of what Mike said.

I, however, found little to agree with. I'm also not much in the grace department.

I'll take Mike point-by-point, which begins after a few paragraphs of introduction.

Mike:  Hugh’s latest business inspiration — a call to arms suggesting to independent authors that they should just eschew traditional publishing or demand it pay them like indie publishing — is potentially much more toxic to consume. (The agenda here is unclear. Is Hugh most interested in getting more authors self-publishing or in organizing authors to demand better terms from publishers? It’s hard to tell, but there is an agenda, it would seem.)

Joe: Hugh's agenda is transparent, both on his blog, and on www.authorearnings.com, and in the email exchanges and conversations I've had with him.

He wants authors to be informed so they can make correct decisions.That's also my agenda.

Your agenda, Mike, is also transparent. As is the agenda of the Big 5, most literary agents, and the Authors Guild. You all earn your living from the legacy industry, and if there is a mass exodus of authors to self-publishing, you all are in deep doo-doo.

I'll reiterate: Hugh is losing time and money on www.authorearnings.com. He won't get his time or money back. I could have written a dozen novels instead of blogging these past years. Neither of us charge authors any consulting fees. We do what we do as a public service.

Mike: The long story short is that Howey analyzed a bunch of Amazon rank data (apparently a single day’s worth, 1/28-29/2014, which has so many obvious problems associated with it that all by itself it raises questions about what of value can be gleaned) and from that extrapolated some breathtaking (and breathless) conclusions that go way beyond what the data could possibly tell anybody.

The analysis purports to compare how authors do self-publishing versus how they’d do with a publisher and comes to the conclusions that they make more per copy on average self-publishing and maybe even sell more and make better books to boot. (For much more and better analysis of the data biases, I’d check Dana Beth Weinberg’s post on this subject. Her objections and my objections have very little overlap.)

Joe: I've been doing similar data studies for years, though not nearly on the scale and scope of Hugh's study. And I never took it to the extreme level Hugh did, crawling Amazon, finding data on 7000 titles (soon to be many, many more.)

And Hugh's conclusions do not go way beyond what the data could possibly tell anybody. Comparable anecdotal data has been telling me the same exact thing for years. It's also been telling thousands of other authors the same thing. There just hasn't been a way for all of us to prove to the world what our monthly bank statements have been showing us: self-publishing is a lot bigger and more lucrative than anyone assumed it was.

Mike:  My problem with the whole exercise is that there is a long list of relevant facts not included in the data and therefore ignored in the subsequent analysis:

1. Author revenue from print sales. Authors not only make a lot of money on print sales, but print in stores (as opposed to printed copies available through Amazon) is also a marketing element. This all still matters. In a comment on Howey’s site, one author estimates her Amazon sales as anywhere from 10% to 30% of her total sales. Obviously, for some other authors it is a lot more than that, maybe north of 70% of their sales. Which kind of author are you? And if you’re the kind selling mostly on Amazon, is that an inherent characteristic of your appeal or a deficiency in your non-Amazon distribution?

Joe: Hugh just posted about print sales, using Bookscan to get data from the Top 100 bestsellers in paper.

His conclusion: "It turns out that traditionally published authors give up more pie for their crust than indie authors give up for their crumbs."

In other words, those extra paper sales that the legacy industry can offer authors aren't worth taking the lower ebook royalties.

And that’s for the Top 100 print bestsellers. I’d guess midlist author paper sales on bookstore shelves are much smaller, percentage wise, than their ebook sales (legacy or self-pub).

In other words, a Top 100 Bookscan bestseller in paper is someone making scads of money with paper, whereas the overwhelming majority of legacy authors don't hit the Bookscan Top 100. But even those huge bestselling authors would do better forsaking print and self-publishing their ebooks.

If that's the case, the midlist authors are getting royally screwed, because they're giving up 75% in net ebook royalties to publishers in exchange for very little paper sales.

I'm guessing this point will be proven as Hugh digs deeper into Bookscan figures.

Mike: 2. Getting an advance before publication versus having costs before publication. Although Howey cites one author who turned down an advance to self-publish, those stories appear to be few and far between. I was really struck by one such author announcing nearly two years ago that he was doing this, but, in the end, that author took a publishing deal — not a self-publishing deal — from Amazon. And the size of the advance is also a consideration that Howey’s analysis doesn’t touch on. It can’t, because that data — however relevant — isn’t available. (But then, can you draw valid conclusions without it?)

Joe: I've personally spoken with five authors who have turned down deals. And I doubt they're the only five. Not every author has the desire to make their business dealings known. And not every author goes looking for legacy deals.

Mike: 3. Unearned advances and their impact on author earnings. Unearned advances are a substantial part of author compensation. I know of one Big Five house that calculates that they pay more than 40% of their revenue to authors and another which says that number is in the high 30s. That’s not all digital, some of that is print with manufacturing and warehousing and shipping costs associated with the revenue. How can you compare how authors are compensated if you don’t calculate the benefits to authors, meaning the resulting higher percentage of the revenue they’ve taken, of unearned advances? That relevant data is also not available.

Joe: Mike, could it be the advances are unearned because legacy royalties suck?

If you were a genre author offered a $100k advance earning 12.5% royalties off of the digital list price (25% of net, and publishers sell to Amazon at roughly 50% off their digital list price), and your ebook is priced at $4.99, you earn $0.63 per ebook sold. You need to sell 159,000 ebooks to earn out your advance. And when you do, you're stuck with 63 cents per sale, FOREVER.

The same ebook, self-published, earns the author $3.49 per copy sold. If they sell 28,653 copies, they made the $100,000. Every copy they sell after that, they make 5.6x more money than they do on a legacy ebook.

Which seems like a better deal for authors?

Also, unless the author is a mega bestseller commanding astronomical advances, guess what happens if the author doesn't earn out? They don't get any new deals from their publisher, even though the publisher STILL holds onto their backlist rights.

Publishers can afford advances because they make triple what authors do in royalties. It's a high interest loan (ridiculously high interest), and even if it isn't paid pack by earning out, the publisher can still do very well.

Mike: 4. Getting paid for doing the work of publishing which goes beyond authoring. Frankly, the biggest omission to me is the eliding of the costs — in time and money — of doing the work the house does for an author. Howey mentions that editors and cover designers can be hired. That’s true, and good and competent ones too. But is a good writer necessarily a wise chooser of an editor or of a cover design?

Joe: Check www.authorearnings.com for your answer to how good indie authors are at choosing covers and editors. Or just look at the Amazon Top 100 lists yourself and count the indie authors there.

And these are SUNK costs. A house that does work for an author continues to charge that author forever.

Sorry, but it took me longer to write the book than it took my legacy publisher to edit it and create cover art. Yet they make 37.5% royalties off list, and I only get 12.5%?

And they set the Digital List Price, which is often too high. You knew this back in 2011, Mike, when you blogged about me.

Mike: How much does it cost if you don’t get the right one the first time? (We know publishers aren’t perfect at these jobs either, but they’re bound to be better most of the time than somebody who hasn’t ever done it before.)

Joe: I've changed my covers multiple times. Yes, it is an extra cost. It's also a cost I would have gladly paid some of my legacy publishers if they'd changed the bad covers they did for me. But, alas, they knew better, and change simply doesn't happen in the legacy world. Imagine if they did. I'd love to hear that phone call:

"Mr. Konrath, this is Legacy John over at Big 5 publishing. Remember that cover we did for you? The one you hated? The one we didn't show to any sort of focus group? Well, we've finally decided to listen to you, and we're changing your cover and relaunching your book!"

Right.

Except, I've done that many times on my own. And so have many self-publishers.

Mike: And is that how you want to spend your time? Authoring is a job but doing the work of self-publishing is also a job. And it entails real risk. Advising a writer to self-publish without considering these things is like telling somebody who’s a good cook that they might as well just open a restaurant.

Joe: Actually, it's more like telling someone who plays a guitar that they should go to open mic night and see what the audience thinks. Publishing a book doesn't require a bank loan like opening a restaurant does. All it requires is a little bit of time and money. If it were rocket science, 50% of the top selling books on Amazon wouldn't be indie books.

Mike: 5. Current indie successes where the author name or even the book itself was “made” by traditional publishers. Another factor any author self-publishing has to consider is the likelihood of success, which is much greater if the books are backlist (have some fame in the marketplace) or even if just the author has been previously published. Successes like Howey’s, from a total standing start with no prior writing track record, are quite different from others who have reclaimed their backlists and used them as a platform to build a self-publishing career.

Joe: Mike, reread what you just said.

"others who have reclaimed their backlists and used them as a platform to build a self-publishing career. "

First of all, these backlist books obviously weren't selling for the legacy publisher, or else the legacy publisher never would have returned the rights.

Second of all, if the authors who got their backlists returned were able to build a career, WHY THE HELL WOULD ANYONE SUBMIT TO LEGACY PUBLISHERS EVER AGAIN?!?

Pardon my yelling, but what you just said shows your absolute inability to understand what's happening here.

To rephrase what you just said:

Legacy publishers couldn't sell the same books that went on to make self-published authors successful.

Mike: Now, that data could be obtained. Wouldn’t you like to know how many of the “indie authors” at various income levels were cashing in on what was originally publisher-sponsored IP and how many started from scratch? (It’s more challenging, of course, to assemble the data by the author rather than by the book.) But I sure think it would be necessary to understand before drawing conclusions about who should self-publish.

Joe: Are you arguing the old "you were published before and that's why you're successful now" meme? If so, I dispelled this in 2012. It's demonstrably false. I've consistently outsold my old publishers on my own, and if I had debuted in 2009 and not 2002, I would have self-pubbed those books and skipped the legacy industry entirely.

Or are you saying that having multiple ebooks improves your chances at self-pubbing success? Does something this obvious even need to be said? You know having multiple books in print also improves your chances at legacy publishing success, right? The more shelf space you have, the better.

But with virtual shelf space, it's an even playing field. Brown has one page for The DaVinci Code on Amazon, and I have one page for Whiskey Sour on Amazon. In the old days, he had 300 copies on the front table, 40% discount, and I had two copies, spine-out in section and full price.

Mike: 6. Rights deals. Howey himself has benefited from having a stellar agent who has made foreign and movie rights deals for him across the globe. (She even made a print-only deal for Wool with S&S.) Yes, you can (if you’re lucky) do this like Howey did: finding an agent to represent his self-published material. But that’s another thing to find and manage that comes with the deal (and the advance check you get to cash) if you do a deal with a traditional publisher (although, admittedly, you would probably have had to find the agent in the first place, and self-publishing could be a way to do that.) Nonetheless, you get more rights-selling firepower on your side if you’re with a publisher.

Joe: Wha?

I've sold world rights to publishers that didn't do anything with them. They didn't return those rights to me, either.

Then, when I got my rights back, my agent sold my self-pub books to more than twenty countries.

You certainly get more subsidiary rights-selling firepower with a good agent. But with a publisher? Maybe, if you're a huge bestseller. But I wager I know more authors whose publishers didn't sell foreign rights than those who did. That used to be common bar conversation at conferences.

"You sold to Korea? I wish my publisher did that..."

Mike: 7. How well Amazon data “maps” to what happens elsewhere. Is it really projectable? A massive flaw in the analysis is the biased nature of the data. Amazon’s sales profile is not the same as the market as a whole. (One day of data isn’t a projectable sample either.) One agent pointed out to me that they are weak at selling mass-market fiction, for example, and that their ebook sales tend to the fresh and new, so they don’t get a bump when a mass-market paperback comes out. But we can be pretty sure that Amazon sells ebooks more successfully than the market as a whole, because Kindle has the biggest installed base and Amazon has the most book customers.

Joe: More data is coming, Mike. Hugh is just getting started.

As an author who makes 90% of his income on Amazon (and I'm far from the only one, both self-pubbed and legacy), I'm not very concerned if the Amazon data Hugh came up maps to what happens elsewhere. I don't care if Amazon is weak selling mass-market fiction, because I don't sell mass-market fiction. I don't need to. I only need to sell ebooks.

And Hugh's data shows how much more an author earns self-pubbing on Amazon than a legacy author earns on Amazon.

And today, Hugh's data includes Bookscan, which shows that even if authors give up a paper deal with a legacy publisher, they still earn more via self-pubbing.

Authors are reading this, and soaking it in. So many were anxious to get this data it crashed Hugh's website when he launched.

As this data spreads, do you really think publishers are going to continue to be able to acquire the best books? What can they offer?

Mike: This bias of sample is compounded by the focus on genre fiction. No matter how big a percentage of those niches is served by Amazon, it is important to remember that it is where they are relatively strongest in relation to the big publishers. If we were comparing literary fiction or biographies — both of which have lots of worthy authors too — the chances are the cost of an Amazon-only distribution strategy, or an ebook-only distribution strategy, would be far higher. And the chances of success would be far lower.

Joe: Then publishers should have nothing to worry about. They'll still get lit fic and biography submissions. Problem solved.

That is, until ebook sales climb in those categories as well.

Hmm, how much lit fic and biographies to publishers actually sell? How big are those pie slices?

I wonder, when the data come in, if those authors also do better self-pubbing. I guess we'll have to wait and see what Hugh digs up.

Mike: 8. The apparent reality: flow of authors is self- to traditionally-published, not the other way around. But I think part of the motivation for this piece was frustration in the indie author community at the fact that many of the best ones get signed up by traditional houses, who view indie publishing as a farm system, and very few established authors will actually turn down an advance to go indie. They’ll reclaim their backlist and self-publish it, or do a short ebook on a subject that is timely and can’t wait for print or be made longer. But there has been very little evidence that I am aware of that publishers are having wholesale difficulties getting authors to come aboard with them on a traditional deal.

Joe: I notice newbie self-pubbed authors signing legacy deals. I also notice them declining legacy deals. But how many former legacy authors go back? And how happy are those newbie authors who sign legacy deals? Where are their ringing endorsements?

Where's that self-pubbed book that became a huge legacy bestseller? Has there been one yet? (50 Shades was small press originally, BTW.)

How about all the authors who never turn down legacy deals because they never even bother to submit to legacy publishers?

And how about all those authors you mentioned earlier (and apparently forgot about) who built their self-pub career using previously legacy-pubbed books? Aren't they the apparent reality? I can name dozens of those. That seems to be the real flow--legacy pubbed authors who get their rights back and start making money for the first time.

Is the Big 5's long term plan to make money off of self-pubbed authors as long as authors remain naive? Is that sustainable? Especially now that Hugh's data is being read by everyone with Internet access?

Everyone should self-publish, by your own admission. Why should anyone send out query letters to agents and publishers and waste months of time? Why not self-publish and get discovered that way, while earning money? That's the "flow" you're referring to, right?

Mike: 9. Publishers can raise royalty rates (or lower prices) when it becomes compelling to do so. Which brings us to the final point that I think is relevant and ignored. As Howey and others have pointed out, the early days of ebook publishing appear to have been good for publisher margins. They can afford to give authors more. (In fact, I encouraged them to do that before their accounts come after them for the extra margin in a post nearly three years old.) But they’re not going to give it out of some spirit of generosity or because Hugh Howey (or Mike Shatzkin) thinks it would be a good idea. They’ll give it when it is a competitive necessity to do so.

Joe: I remember that post of yours, and agreed with it wholeheartedly.

But legacy publishers couldn't afford me, or Hugh, or thousands of other authors. Ebooks are where the money is, and even if a publisher offered me 95% ebook royalties, that still only amounts to 47.5% of list.

I can make 70% of list on my own.

I'll repeat that.

Even if a publisher offered me 95% ebook royalties, that still only amounts to 47.5% of list. 

I can make 70% of list on my own.

The other things that publishers offer (editing, covers) are one-time costs. And print? There's a whole generation of authors who don't care if they're ever in a Barnes & Noble. We can sell our Createspace and Lightning Source paper books on Amazon.

Mike: So my advice about Hugh Howey’s advice is simple. Totally ignore it if you’re not a genre fiction author; there’s precious little evidence or thinking in it that applies to you.

Joe: Yet. Hugh hasn't presented the data yet. And even if lit fic or biography or non-fic or children's books still earn more in paper, they won't once B&N is gone. I know children who are learning to read on Kindles and iPads. They won't have the nostalgia for paper any more that I have nostalgia for 8 track tapes. It's not as if action, horror, and romantic comedy movies went to DVD and BluRay while documentaries and musicals still sell in VHS.

In 2010 I predicted print would become a subsidiary right. And for a whole lot of authors, it has.

Paper won't ever go away. But it will be a niche market, and not the most lucrative way for writers to make money.

Mike: And if you are a genre author, be very clear about the extra work and extra risk you take on in order to get some extra margin. Both will be required for sure whether the extra margin materializes or not.

Joe: The "extra margin" is 5.6x the royalties your publisher is offering you. So a better way of thinking about it is, "Sign with a publisher and they'll give you 12.5% of list price and do your editing and cover, or self-publish and make 70% of list price and do your own editing and cover."

Mike, you have a consulting business. What if you had to do a bit more work than you currently do, but you'd make 5.6x as much money?

That's the current dilemma authors have. And I don't see it as a dilemma. I see it as a no-brainer.

That said, every author has different goals, and legacy publishing does offer some advantages, and every writer needs to find out as much as they can before they make any decision.

I suggest they start with www.authorearnings.com.

Mike: Self-publishing is definitely an incredible boon to commercial writers and they should all understand how it works. Increasingly, literary agencies see it as their job to provide that knowledge. It is almost certainly a good idea to self-publish for many writers who have reclaimed a backlist that has consumer equity.

Joe: Again, if it had "consumer equity", why didn't legacy publishers exploit that?

Mike: It is a perfectly sensible way to launch a career, either before going after the commercial establishment or as a part of the strategy to engage with them. (Editors in the big houses are well aware of the self-publishing successes; it’s a new farm system.)

Joe: It's a farm system for naive authors. BTW, Steve Zacharius used this same analogy. But even though I've sold over 1 million self-pubbed ebooks, he still hasn't called me with a print-only deal.

Why aren't I being farmed? Could it have been something I said?

Mike: If an author has access to markets, it can be a better way to get short or very timely material to them faster. But to say it has its advantages and applications is a far cry from saying that it is a preferable path for a large number of authors who could get publishing deals.

Joe: Calling all authors with publishing deals who later went and self-pubbed: which is the preferable path?

Which is better, 12.5% royalties or 70% royalties?

Which is better, having control over cover art or not having any say?

Which is better, choosing the edits you want to make or having your editor force them on you?

Which is better, being paid monthly or twice a year (with reserves against returns held)?

Which is better, owning your rights or selling them for the term of copyright (your life plus 70 years)?

Which is better, releasing as much of your writing as you want to or non-compete clauses preventing that?

Which is better, publishing when you finish the book or waiting 18 months for a legacy publisher to release it?

Which is better, being on the shelves of B&N (while they're still around) and contending with a high return rate, or selling your paper books via Amazon and Createspace (and making higher royalties)?

Which is better, working hard and keeping control or working hard and having no control?

Which is better, listening to industry experts who make money by telling you to sign with publishers, or listening to industry experts who do it for altruistic reasons?

Mike: I can’t “prove” this so I won’t try, but it bears further emphasis that it still looks like the number of authors who start as self-published and then get “discovered” by the establishment and switch over is still larger than the number of authors who say “keep your stinking advance” and turn down a deal to do the publishing themselves. None of the parties involved is stupid — not the traditionally-published authors, nor the self-published authors, nor the hybrids — not even the publishers. And they might not be evil, either. As for self-interested debaters, they exist on all sides.

Joe: Unless publishers drastically change how they do business, I don't see how authors will keep signing with them. Some still may. Every author has different goals, different paths to follow.

But whatever authors decide to do, it is important that they make informed decisions. That they understand the pros and cons. That they study the industry and weigh all options and go into this believing they're doing the right thing, not because they have no choice.

I am one of tens of thousands who had no choice. I wanted to write books that reached readers, and the legacy system was the only way to do it.

The fact that a choice now exists is amazing. Thousands of authors are making money for the first time every. Some are paying bills. Some are making a living. Some are getting rich. Some are finding success and signing with legacy publishers. Some are finding success after getting dropped by their legacy publishers.

But one thing is 100% certain. The balance of power has shifted. Writers are now in control.

How we use that control depends on how informed we are, and what we each want.

Mike: PS: I HATE long comments. If you disagree with me and want to use my space to make your case, please be concise. (And frankly, although I also prefer you to be concise if you agree with me, I’m made less cranky when I get long-winded support.)

Joe: No worries, Mike. I'd just assume keep the debate over here, where more people will see it.

And people here are free to leave long comments, as many as they like.

I was recently Skyping my friend and frequent collaborator, Ann Voss Peterson, and she wrote back:

"There's a total inability to see anything from the authors' points of view. That is pervasive among these legacy defenders. None of them consider what is financially good for the author AT ALL."

That's because we're cattle. We're the farm team. We're the limitless resource, useless without a firm hand to connect us with readers.

At least, that's how it used to be. That firm hand has always charged a premium for the services it provided. They could get away with charging a lot, because there was no other choice.

But now those services are optional, not necessary.

And Hugh Howey, and his nameless Data Guy (who will soon be writing a post for this blog) are showing all indie writers how unnecessary legacy publishers are.

Yes, Mike, this is potentially toxic. Especially since Hugh and Data Guy aren't planning on stopping. They're going to release more and more data until even you won't be able to dismiss it.

But you did your best to warn the legacy industry. For years you've been warning them, Mike. And you're to be commended for that.

Which is why I'm saddened you've stopped warning and advising them, and started this apologetics approach, defending an indefensible industry, coddling them rather than hitting them with the frightening reality; a reality they should be very worried about.

You could have used Hugh's data as a call to arms. As an industry-wide wake-up.

Instead, you've used some really poor arguments to try to discount Hugh's work.

It doesn't matter, though. More data is coming. It doesn't matter if you discount it, or ignore it, or tell the legacy industry not to worry about it. Because writers are listening to it.

And without writers, the legacy industry is finished.

Addendum

Mike continued to say silly things in his comments, and I wanted to respond to some of them.

Mike: Doing an (incomplete) analysis of how (some of) the top 0.5% of titles do tells me (and everybody else) *nothing *about how many tried and failed and how much it cost them to try and fail.

Joe: So how many authors have tried to be published by the Big 5, or attain an agent, and have failed?

I have no doubt many authors aren't doing well self-publishing. But would those books have ever been published by the legacy industry?

Compare that to books rejected by the legacy industry (like mine) or that have gone out of print (like many others) and have gone on to make a great deal of money. ORIGIN was rejected in 1999 by over 20 publishers. It just hit the Top 100 Bestsellers on Amazon last week, and made me about $3k in two days.

And compare it to the books that were accepted by publishers, and failed. Which are the majority, last I checked. Two out of five make money, two break even, two lose money, last I spoke to my old editor. (Konrath fail update: 2x3=6 not 5. It's 1 makes money, 2 break even, 2 lose money.)

A self-publishing author who failed at least did so having a fighting chance. The same cannot be said by those rejected, orphaned, and ruined by the industry you're defending.

As for self-pubbed authors failing--haven't you heard that ebooks are forever? There is no shelf life. Today's failure may be a hit next year, or next decade. Ebooks can't be stripped, remaindered, or returned.

Mike: it is possible that a genre author might be able to glean some value from your analysis. But it is worthless for any other kind and we are a LONG way from the time when MOST authors -- even genre authors -- will be better off self-publishing than being published.

Joe: Show me an author who has done both--self published and legacy published--who agrees with you. Any author at all. You can read my thousands of blog comments for hundreds who disagree.

Mike: If bestsellers were arrayed by CUSTOMER SPEND, we'd see a very different picture.

Joe: To quote Jake Blues: Jesus H. god-dancing christ! Mike! MIKE! AUTHOR'S DON'T CARE ABOUT CUSTOMER SPEND! THEY CARE ABOUT HOW MUCH MONEY THEY CAN EARN!

Hint: This is why Hugh's site is called "Author Earnings". Because his data reflects... wait for it... Author Earnings.

You simply don't get it. Forest for trees? Blinders on? What can't you understand here?

Mike: If you've already got a publisher, you'll still benefit from doing the digital marketing with your readers and fans. That's another thing missing from the analysis. Whatever an author can do on behalf of a self-published book, they can do on behalf of one that has a publisher too!

Joe: They sure can!

And next time you get paid to speak, Mike, you can give me 3/4 of the money you made! You don't mind doing all the work and letting someone else make the lion's share of the profits, right?

(Am I wrong, or did Mike just cross over into self-parody here?)

Mike: I know that all the big publishers are developing digital marketing capabilities and lists of names and ways to interact at scale.

Joe: Yes, the big publishers have a history of respecting readers: High ebook prices, collusion, price fixing, windowing, $30 hardcovers, year waits for paperbacks... it's almost as if they treat readers as well as they treat their authors.

But if, after a hundred years of treating bookstores as their customers, they've finally figured out that readers are their customers, good for them. Looking forward to seeing them innovate... well... anything.

Mike: I'm 66 years old and I have been in the publishing business since I was 11. Based on all those years of observation, I refuse to believe that the size of the advance isn't the most important thing to 9 out of 10 of the authors who do it for a living, if not 99 out of 100.

Joe: And you damn kids get off my lawn!

I really can't argue with someone who refuses to believe something. But I urge you to not confuse "advance" with "earnings". I got a $33k advance for my first book. I've made that self-publishing in a good week. An advance is not the most important thing for me, or for many other authors I can name. Perhaps it was like that, back in your day, but the times they are a' changing.

As I mentioned, an advance is a high interest loan, which is very difficult to pay back.

Do you have a pension plan, Mike? A 401k? Let's say it's worth $50k a year in dividends, and will continue until you're 100 years old. How about I give you $200k for it, right now? Does that seem fair to you? It's a large sum of money upfront. Why worry about what you'll make ten years from now?

If I made that offer to 99 out of a 100 people, think they'd take it?

Also, I've called the US Department of Labor to arrest your parents for putting you to work at age 11. Sorry I had to do that, but children need to be protected.

Mike: In the agented world, the average advance is considerably higher than Jackie's. Her publishers are setting a very low bar for her to do better on her own. No agent can afford to negotiate contracts for 15% of $2500 per book and none of them do.

Joe: None of them, huh? So no agents ever represented authors who sold to Harlequin? Or Silhouette? Or Leisure? Or Pinnacle? Or Five Star? Or Medallion? Or Kensington? And no doubt many others? None of them do? Really?

You seem to know a lot about the average advance. If it isn't the $5000 mentioned in your comment thread, what is it? You neglected to mention it, though you're obviously sure of yourself.

Mike: I mean is that there are people doing it for a living and there are people who are doing it for other reasons, ranging from pin money to personal satisfaction to whatever.

Joe: Such a modest lot, we writers are. All we need is pin money and a pat on the head, or just the knowledge of a job well done. We're more like hobbyists, really.We don't write to be read, and very few of us aspire to make a career out of this. Especially the ones who read our blogs, and who are wiping the floor with you in your recent comments section.

Don't take it personally, Mike. I know your blog is just a hobby for you, something you do for personal satisfaction or whatever. If you put up a Paypal donation button, I'd be happy to give you a few bucks for pin money.

Mike: Authors who have built a following already and are suffering declining sales are, indeed, good candidates to switch to self-publishing.

Joe: Know who's a better candidate? Authors who have built a following and have rising sales. That's why I got my rights back. Because as my legacy ebook sales began to grow, I kept a running tally of how much money I was losing.

Happily, that money now all goes to me.

Mike: The use of a single-day's data as a base for projecting a year's sales is a particularly egregious error of logic and the laws of probability.

Joe: Which is why it will be great to see Hugh and Data Guy crawl for more numbers. But I can guess the response:

"The use of a week's data as a base for projecting a year's sales is a particularly egregious error of logic and the laws of probability."

"The use of a month's data as a base for projecting a year's sales is a particularly egregious error of logic and the laws of probability."

"The use of a year's data as a base for projecting a next year's sales is a particularly egregious error of logic and the laws of probability."

Ad nauseum.

But I kid. Maybe a single day isn't enough.

So I just checked the Amazon Kindle Top 100 five minutes ago.

Hmm. There are 35 self-pubbed titles.

Well, I'll be darned. That's the 35% Hugh mentioned in his report from a few days ago.

I suppose I could waste more of my time checking the Top 100 Romance, or Sci-Fi, or Police Procedural, or Horror, but I have a strong suspicion what I'd find. I came upon this suspicion because I've been counting indie authors in the Top 100 for years. Have you, Mike? If so, you'll find that sometimes, on certain bestseller lists, more than half the list is self-pubbed. It fluctuates, of course, but I'll make a crazy prediction and say that the more data Hugh reveals, the more it will show how indies are making a lot of money without the legacy industry.

Or, as William Ockham just commented in response on your blog:

"No, you are just wrong about that. It would be wrong for projecting the earnings a particular book based on its position on that day, but likely to be excellent for projecting the shape of the market."

Zing. Thank you, William.

So I'll repeat my question:

Why do you think any indie author, when exposed to these numbers, would sign with a legacy publisher?

One last gem from Mike, then I really have to get some work done.

Mike: I have a limited appetite for meaningless data interpreted with an ax to grind.

Joe: And I have an unlimited appetite for fisking legacy pundits who say stupid shit. So please, keep it up.

As always, you're welcome to respond here, and I'll post your unedited comments, however long.

Guest Post by J. Scott Nelson

Joe sez: A reminder to all guest bloggers--if you want to make sure I post your guest blog for Tess you have to email me with the header GUEST BLOG FOR TESS along with the DATE. Email me when your blog is finished, and email me again the day before the blog is supposed to go live, attaching all the cover art and the Word doc file. Today the guest blogger is James Scott Nelson, and he reminded me yesterday with the email GUEST BLOG FOR TESS 2/13/2014. And, of course, attach the receipt for your Tess donation.

The amount of email I get is staggering, and I can't reply to it all, let alone try to schedule dozens of guest posts without you helping me out by following these instructions. You can email me a zillion times, but if there is no date in your email header, I'm going to miss it. And if I did miss it, even though you put the date in, email me again. I had some health issues for a few months, and my email backed up. So email me again and we'll reschedule.

Here's J. Scott Nelson...

J. Scott: Joe evangelizes in favor of self-publishing for a myriad of compelling reasons. For me, I finally gave up on the traditional publishing process because of their complete disregard for my time.

I've always been a writer.  As a kid I wrote mysteries ala The Hardy Boys.  I penned a popular newspaper humor column in high school and won numerous awards in in my college’s literary magazine. In my spare time I wrote fantasy novels.  I knew the first few were not good enough for publication, but I was content to keep learning my craft. 

Then several years ago I started The Riven Blade Saga  -- a gritty, multiple-POV epic trilogy.  It brims with political intrigue, empires warring over resources, and vengeful plots.  Some characters evolve and grow.  Others die.  Each book raises the tension:  “Path of Peril” focuses on two massive battles.  Civil wars erupt in “Road of Rebellion.”  Finally, a genocidal apocalypse is unleashed in “Crucible of Chaos.” 

I queried some agents.  One told me that simultaneous submissions were an insult and he wouldn't even consider me.  So instead I queried one agent at a time to “follow the rules”.  It took about nine months to collect three rejections before an agent called to request the manuscript.  I sent it off that very day.

And waited. 

After about three months, he contacted me and said he loved the characters -- but I would have to cut the word-count in HALF before he would consider sending it to a publisher.  

Both I and my main editor (and now co-publisher) bought the book "Self-Editing for Fiction Writers" by Renni Browne and Dave King and got to work.  After following the suggestions in the book we were shocked how much better the book had become at half the size.  So I sent it off to the agent again.

And waited.

Five months later I got a brief email, "I am really enjoying the book, and I am pretty sure already that this is something I want to submit to publishers."  I was so excited!  But he needed to finish it to be sure.

Three more months went by. 

Then I got a call.  The agent wasn't going to work in the fantasy genre anymore, but he had recommended my manuscript to another agent who was willing to take a look.

The next twelve months was spent waiting for the second agent to review the manuscript, making his requested changes, and waiting for him to read the revised manuscript.  He only accepted five unpublished writers a year out of around 2200 queries, but by then the euphoria of having an agent was long gone.  An unpublished writer is at their agent’s mercy.  You sit at the bottom of their to-do list, behind all their published authors who pay their rent today.  While it makes a certain sense, it was a recipe for frustration.  

Finally, he did submit it to the Big Six publisher he felt would be the best home for it.

And I waited again.  

I created a website and offered sample chapters for readers to review.  Hundreds of people sent me emails (which I included on the site under "Raves from Readers") expressing their interest in the rest of the story.  I kept my agent informed of both the traffic and the growing list of “Raves”.  Certainly the publisher would see this positive response as a great sign, right?

But after several months it was rejected.  The editor-in-chief said the genre was crowded and the sales of some current epic series were struggling.  She added that a couple years earlier (when I had actually started this process) it would have been an "easy buy"!  She called my characters interesting and writing style engaging – but vampire stories were hot right now -- did I have any of those?  I outlined a story about a vampire book publisher sucking the life out of would-be writers.  But the vampire kept dying in the first chapter.

After another rejection that also gave mostly-positive comments, my agent said that we should hold off submitting for awhile.  His contacts just didn’t want epic fantasy right now and were looking for urban fantasy instead.  We should wait for the market to turn more positive on my genre. 

Over a year went by.

It began increasingly clear that my agent had lost interest in me.  Several of his other big clients were releasing new books.  I felt lost in the shuffle.  I asked him pointedly for “the plan” and it became clear there was none.

I doubted other agents would even consider the manuscript now since several Big Six publishers had passed on it.  Life happened, I took a new job that involved a lot of travel and time, and a couple more years went by while I tried to work on some urban fantasy ideas that ultimately just didn’t excite me.

Then one day I got an email from someone who had read the Path of Peril samples online and asked, “I love the first few chapters -- when is this book coming out?”

The traditional process seemed a lost cause, so I started researching self-publishing, found Joe’s blog and here I am. The complete trilogy is available on Amazon in digital and paper format, and I’m starting to work on getting the word out using suggestions from Joe and those of you who have blogged here already.

So how do the two routes to publishing compare?  One was lengthy, uncertain, and I was at the mercy of others to represent my interests.  The other still has uncertainty, but I am in control of representing my interests.  I just need to focus on creating the best stories I can and working to build a reader base. 

I thank Joe for the opportunity to share my story and invite you to check out my books, my website, or the novel trailer for the series here.    

Joe sez: I wasted nine years querying.

Nine whole years.

And once I did sign a pub deal, it took 18 months for that book to be published.

Legacy publishing is not a rocket ride to heaven. It's a very slow frustration train. YMMV, but if Amazon KDP had existed back in 2003, knowing what I know now, I would have never submitted a single query letter.

Figure out your goals and act accordingly, armed with as much information as you can find.