Authors on one side of the industry are getting screwed into the poor house

Link.

While this isn’t iron clad empirical proof, it does qualify as data.  And it tracks with what most authors already know.  Even the ones who still willingly embrace the folks taking all their money.

Publishing companies are impoverishing authors.  They have been for decades.  People, especially those on the trad side, have all sorts of word games and accusations and pleas and misdirections and everything else that distracts from reality, but scrape all that aside and that is exactly what’s happening.

Authors who go traditional wait for years, in some cases most of – or more than – a decade.  At the end of that, after they’ve plied their manuscript through the submission game and somehow managed to ‘win’ the lottery, they’re offered an advance that is typically in the low to mid four figures.  I’ll be more clear; that means most of them are offered a check for between three to seven thousand dollars.  This money is ‘advanced’ against their future royalties.  Those royalties are usually in the 10% range, maybe as much as 20% but that’s pretty uncommon.  Most of these same authors are contractually required to give the copyright up to the publisher; so they no longer even legally own their own work.

And these same authors have no say over anything that happens with the book.  In some cases, contractually, they don’t even have what a Hollywood director would refer to as final cut; some of these authors sign contracts that say the publisher, if it so chooses, has the last word on which manuscript actually gets published.  So if the author and publisher disagree, and this clause is active, publisher wins.  The authors also won’t ‘win’ the lottery unless they’ve built a social media presence already.  More and more publishers are reluctant or outright refusing to sign authors that don’t have an active website and/or Facebook page with a readership, lots of Twitter followers, and so forth.

That lack of a voice for these hapless authors continues to the pricing and marketing of the book.  As we’re seeing, even though the Big 5 were convinced they’d prove out differently, readers (i.e., customers) have a price line where keep their wallets closed.  Thirty plus dollars for hardbacks, fifteen plus dollars for ebooks, and ten plus dollars for paperbacks . . . these price points are proving to be past those lines.  Sales are down, and pricing is a big part of the reason.  Plus you have things like windowing releases, where the publishers insist on launching only a hardback and making that the sole option for a time, to drive fans who just can’t wait into buying the expensive product.  And those fans who wait are still bent over the barrel.  Unsurprisingly, many of them are saying no thanks.  Then the window finally closes and ‘normal’ (but still screwed up) pricing opens, and a lot of those would-be readers have forgotten about it.  They’ve moved on.  Shocking, right?

These authors are being told to pay for marketing out of their very small cut.  So they’ll get a $4,000 advance, then are expected to pay for flights and hotels for a signing tour, or convention appearances, domain name registrations and hosting bills and online ads, or whatever, out of that.  Any other industry, any other industry, and the industry pays for the appearances, the marketing, the hotels.  Salesmen aren’t told to fly to New York to represent the company on their own dime; the company pays.  Baseball players don’t show up at a trade expo on the hook for expenses; the expo or the team will foot that bill.  Yet authors, already being shafted, suffer the indignity of having that shaft shoved just that much deeper when the publisher expects them to hit three or four major conventions that aren’t anywhere near the author’s home, or do a twenty state bookstore signing tour, and do it on their own.

Let’s get back to the advance and royalty.  That check is an advance, and it represents prepaid royalties.  So at 10%, when the ebook is going for $14.99, the author receives $1.49.  Every thousand bucks of ‘advance’ requires 671 copies to move.  Doesn’t sound too bad, right?  The book they’ve spent years pouring sweat and blood and hope into only has to sell a little under 2,700 copies to pay out a $4,000 advance. Oh wait, physical copies sell at wholesale prices when bookstores are involved.  So that $30 hardback is likely selling to the store at $15, because the other $15 represents the store’s cut.  So the hardback is really only paying out to the author at half the cover price.  Same for the paperback.  Even ebooks are selling under the ‘agency’ model, so they’re not even paying the author a percentage off the full sale price.

But still, five thousand or so copies have to move, and then the author’s in the black, right?

Right.  And for the life of the book, they’re only getting a $1.05 per ebook (($14.99 * 70%) * 10%), $1.50 per hardback (($30 * 50%) * 10%), and fifty cents per paperback (($10 * 50%) * 10%).  And those are from new sales; used sales they see nothing from.  And again, they have no control.  They can’t goose sales by adjusting the price.  Sure they can do appearances and run ads, ask fans at conventions or where ever to please buy the book; but remember, those costs are coming out of their pocket.  If they drop $100 on an ad, or $1,000 on travel and hotel to do a convention, they’ve got to see a lot of copies move before their measly ten percent pays it back to them.  And, of course, the publisher LOVES when authors play that sucker game; the company’s raking 9 cents out of every dime that comes in.  Please authors, please spend your money to make me money.  Please go right ahead.

Now obviously some contracts are different.  We’re going to ignore the really big names, because everyone – even readers who’ve never looked behind the scenes of the industry before – know they’re in a different category.  The contracts a really big name gets have little in common with new authors, midlisters, or smaller sellers.  But you’ll have to look pretty hard to find a new author who’s being offered terms much better than the examples I’m giving here.  If you can find even ten percent of the new authors signed in the last twelve months who have significantly better terms than these examples, that’d be amazing.

Why do I scream about these things?  Because indies don’t get shafted.  It’s just that simple.  Let’s extend the example above.  Mr. New Author’s precious opus sells ten thousand copies in the first twelve months of release.  Let’s say it’s half hardback and half ebook.  Calculator, math is hard, okay here we go.  $7,500 from the hardback sales, $5,250 from the ebooks, totaling $12,750.  Definitely not a living wage.  And remember, they can’t publish more often than this; traditional publishing companies can’t publish quickly unless the author’s a big name.  Trads only have so much ‘space’ in their print runs; the presses only run so fast.  Packers only pack books into boxes so fast.  Those boxes only ship to stores only so fast.  And those stores only have so much physical space on their shelves before they boot the books back to the publisher to make room for the next book that shows up to get displayed.

This example completely ignores returns, which usually get charged against the author, but keep that in mind.  But, again, let’s ignore it.  So we’ve got $12,500, but it’s for the full year.  If they’ve got a very agreeable publisher, they can squeeze out that one book a year.  Their physical sales drop off after the first month or so, because the stores can’t display everything.  And their ebook sales drop off because after the initial wave of suckers who bite on the $15 dollar price, plus any true fans the author’s managed to collect, the ebooks sink in the rankings and loose visibility electronically as well.  So once a year, in a pretty good midlister or small-author circumstance, they can put that one book out, sell ten thousand copies, and get their twelve-five.  If the publisher makes them wait to publish, trade the year for eighteen months, or even two years.  Now we’re at $12,500 every 1.5 or 2 years.

Indies don’t get shafted, right?  Here goes the indie math.  Same author, same ten thousand sales.  We’ll assume the author prices as an indie does, $2.99.  That price – selected by the author – at a 70% royalty, pays out $2.09 per ebook that moves.  Multiplication, more math, and the same number of copies moved generates $20,930 for the author.  Holy Cow Batman!

But wait Dave, indies have to pay for things publishers normally pay for.  So right you are.  Editing and cover are the main ones.  Remember, most publishers push marketing costs over to the author anyway.  With a little looking these days, editing can be had for a few thousand dollars for a ‘typical’ 100k word manuscript.  It could be around a thousand, it could be as much as four or five.  More doesn’t mean better, and lower doesn’t mean worse; but those are the ranges.  Let’s say three.  Covers, a very fine cover can be had for $500.  It could be as low as $50 or $75, or as much as several thousand.  Let’s go with $500.

So Mr. Indie Midlist has paid out $3,500 and earned $20,930, net $17,430.  Still more than the trad author’s getting screwed for.  But we’re not done yet.  Mr. Indie can write another book, and another, and another.  The term here is ‘the tail’, and the short version is when you have a catalog, any one of those books serves as a hook for someone who finds and likes it to then ask that very basic question; “Does this guy (or gal) have any more stuff out?”  Mr. Indie can publish as fast as he can write.  A conservative figure would be two books a year.  Fast writers can squeeze out more, and those writing shorter can go faster still, but let’s go with two.  So if he can score two 10K sellers a year, $34,860 to him.  That’s before taxes.  And it doesn’t figure any marketing expenses.

Here’s the deal though.  Once there’s a catalog to provide tail benefits, marketing tends to be a positive Return-On-Investment situation.  So at the end of year two, when the author’s got four books out, he drops $300 into advertising in conjunction with a sale that prices a key book to $0.99 (usual price $2.99), and not only gets a lot of extra discoverability, but also has a pretty good chance to convert every sale buyer into making one or more purchases from the rest of the catalog.  So he might move, conservatively, several hundred sale copies and only earn seventy cents for each of them; but if half of those buyers get even one full price book, that’s a ‘bonus’ $2.09 per that rings up.

Above we mentioned authors needing to build their own social media presence or they can’t get in on the traditional side?  That’s a lot of time and effort, and usually at least some money, to accomplish.  Lots of new indies, wanna-be-writers, think social marketing is easy because it looks free.  It’s not.  Actual followers, real readers, don’t just materialize.  They’ve got to be built, the same way anything else worth having is.  When you’re an indie, that effort pays you; not a company.  You manage to assemble followers and clicks, and they reward you and your catalog; not an entity who doesn’t even know your name except as a line item on an expense report.  And as an indie, you not only benefit yourself for that work, you aren’t paying for it out of the pauper’s share of the proceeds.  When you’ve got a presence, a brand, and you launch a book or run a sale, the benefits increase that much more.  You reap the rewards.

Remember those royalties?  The trad author is stuck on 10% forever.  He gets most of his sales early and then they tend to degrade sharply.  Indies don’t have sales curves that steepen like that; it’s more common for indies to maintain a steadier curve because they’re not reliant on inefficient book stores that are eager to boot them out anyway.  And the indie gets the 70% for every copy.  The year after release, five years after, ten years after.

Now this is just a long example.  It is not going to be concrete reality for each and every author.  And it does rely on the books finding buyers.  But for every argument one can bring against “your indie book will flop”, the exact same argument applies to the trad book as well.  No one can predict what’s going to sell.  Audiences like what audiences like.  No one saw Harry Potter coming; not even the guy who finally bought it against his personal judgment because his eight-year-old daughter liked it.  Another year it was 50 Shades of Gray.  One year it was John Grisham bursting out onto the scene.  Another it was Tom Clancy, when no one knew who Tom Clancy was.  But one year it was Hugh Howey.  Another it was Andy Weir.  Joe Konrath.

As an indie, if your book doesn’t hit, you’re only out a few months.  Maybe six.  You didn’t spin in place for a couple of years writing and submitting and revising and waiting on that single manuscript.  As an indie, you write it, release it, and move on.  If it hits, great; follow it up because people like that one, and those readers will probably want a sequel or something from you that plays in the same universe or space or genre.  If it doesn’t, you’re out six months but you move on to the next one.  If it takes an indie five books to get one that doesn’t flop, he’s only out a couple of years.  A trad author (or, in this case, trad wanna be author) would be out at least a decade to have flopped through five different books.

The only rich traditional authors are the ones who are known by everyone.  The ones who are on the airport book racks, the supermarket end caps.  The 1%ers.  There are thousands of indies who are making a living because the math is so much more forgiving when you don’t have to somehow find the needle in the haystack.  When you don’t have to wait years and years to win that gatekeeper lottery, when you aren’t getting a handful of pennies on the dollar, when you can publish at a pace and speed dictated only by your own output level, and one that can maintain awareness among your fans so you don’t get forgotten as two or three years roll by with no new books, it’s considerably easier to not need the day job.

And when you can write full time, oh my.  So many amazing things can happen.  You can have a real career as an author, not just a sideline hobby.  When you get up and write.  When you don’t have to clock out fifty or fifty-five hours out of the week driving to and from someone else’s workplace to serve them, it’s amazing what you can get done on the writing front.  Even the slowest writer, no longer working on the side, can flesh out their catalog pretty fast.  One title becomes two, becomes five, becomes ten.  Soon you’re not just into double digits, you’re well into them.  And each one is paying you, not someone else.  Each one builds your brand, that you control and support and nurture.

Most authors today aren’t living off their writing income.  All the fuss readers who aren’t invested in the industry have been sort of noticing over the past few years, all the fuss that’s going to keep being kicked up for at least a few more, is related to this.  The people who’re getting rich off authors don’t want the gravy train to stop.  They want those good times to keep rolling.  Who wouldn’t?

The ones getting screwed wouldn’t.

And that’s where the fuss, the name calling and crying and strawmen and ad campaigns enter.  That’s where trad mouthpieces like the New York Times come in.  That’s where the cursing of Amazon’s name comes in.  Indies are coming, and every dollar we earn is a dollar the trad side didn’t take ninety percent of.  With that fiscal shift, their companies are folding.  They’ve built themselves up on authors who didn’t have any other options.  We have those options now.  Modern options.  Better options.  Fairer options.  They hate it

Too bad.