What the Golden Ticket Really Costs

I am in the process of querying the first novel in my fantasy romance series. I decided to directly query publishers, without an agent, because most of the publishers I wanted were epubs who took unagented submissions. I feel good about that decision, most days anyway, but I still have very mixed feelings about traditional publishing in general.

Disclaimer: I love books. I love reading books. Print books. Ebooks. As long as it has words in it and is a genre I like, I will read it so I am not snobby about format. I also buy my books and ebooks from a variety of sources: Amazon, used book sales, brick and mortar book stores, direct from publishers, and places like Smashwords, so I am not snobby about where the book comes from either.

The trouble comes when I start looking at numbers comparing traditional publishing to self publishing. Courtney Milan wrote an honest discussion with Ask A Mermaid recently where she discussed how to do a Profit and Loss (P&L) analysis for a book. Milan is a very successful romance author with an established author platform. She started doing P&L comparisons for books when she received an offer from Harlequin for a book she was also considering for self-publishing.

So if I only looked at the first year of my P&L, I would have said to go with Harlequin’s offer. But year two was where I thought I would get ahead: I projected about half the sales from year 1 in year 2, making the worst case scenario $12,568, the best guess scenario $39,000, and the best case scenario $77,775.

Doing the P&L this way forced me to accept that I was taking a risk—that there was a real chance that I would lose money by turning down Harlequin’s offer—but that the upside potential for the book was much, much larger by choosing to self-publish.

Milan’s established platform has allowed her to be successful publishing both traditional and self-published books. The catch here is that she had a very well established author platform.

Recently, Mike Corker, founder of Smashwords, shared a long post which analyzed the indie book market using data from Smashwords. Smashwords enables authors to publish their work and easily distribute it to all major eretailers while allowing them to retain their rights and keep 85% of the net profit. The standard net for authors from traditional publishers is 25-40% for ebooks and range from 10-20% for print.

The analysis of the data from Smashwords is fascinating in terms of title length, price points, and word count. Where it really drives home, though, is author profit:

Allow me to break it down this way.  An indie ebook author earns about $2.00 from the sale of a $2.99 book.  That book, on average, will sell four times as many units as a book priced over $10.00.  In order for a traditionally published author to earn $2.00 on an ebook sale, the book must be priced at  $11.42 (if the publisher has agency terms, as Smashwords does) or $16.00 (if it’s a wholesale publisher).  Remember, traditionally published authors earn only 25% of the net, whereas Smashwords authors earn 85% net.  If your book is traditionally published, and your publisher sells under the wholesale pricing model, you earn only about $1.25 for a book priced at $9.99, whereas an indie ebook author would earn $6.00-$8.00 at that price.

If a reader has the choice to purchase one of two books of equal quality, and one is priced at $2.99 and the other is priced at $12.99, which will they choose?

The numbers are staggering, but Corker’s last question is an important one and too often overlooked. There are buckets full of arguments for or against self-publishing. Some of those arguments have merit and some are just people being ugly to the wild child threatening the marble halls of the publishing industry.

As a reader, I choose, almost always, to buy the cheaper, equal quality book because I can only buy so many and I would rather have more for my money. If I am going to spend over $10 on an ebook, I spend a long time thinking about it. Sometimes, I spend so long considering the purchase, I forget to buy it, even for authors I love. It is the main reason why there are some very popular series on my TBR list where I am more than one book behind. I love them, but I do not $10 love them.

Not only are books and ebooks from traditional publishers often more expensive, less of that price goes back to the author. Now, I know all about overhead costs with traditional publishing. I know why publishers price their books the way they do, but there will come a day, and that day might be now, when the way we do publishing changes and those price points will change too.

I did not decide to start writing for the money. No person with any bit of sanity and self-preservation does this for the money, but that does not mean I do not compare the number 85% and 40% and see the difference between them. I may not be great at Math but I can do addition and subtraction well enough.

There are costs to self-publishing, if you do it well. Editors, book covers, and marketing take both money and time. A P&L, as Milan pointed out, is essential to understanding the business behind your book. Even with these costs, if an author intends to build a platform over the course of a lifetime, self-publishing seems to be a better deal.

Recently, an author behaved badly and ranted about how good books do not earn money but popular trash, in this case erotic romance, sells well. (The original post was deleted by the author, but Heidi Cullinan’s response is brilliant.) Writers hear advice all the time about not writing to the market and writing the story they want to tell. That is good advice, but I am realistic. I know romantic epic fantasy is not a high selling genre. I have seen editors share frankly on Twitter that people say they want fantasy and sci-fi romance, but the sales numbers do not support it.

Sadly, if you go on almost any sci-fi/fantasy blog or website which reviews or lists books, there are very few by women and even fewer with romantic elements. Without some romance, the stories always feel flat to me. I want romance in the books I read and I want to write those books. I have done enough reading on the industry now, though, to know my audience is probably going to be small. I am fine with that, but a publisher may not be fine with the smaller earning potential.

Controlling my copyright is also important to me. It is hard to imagine signing over a significant portion of copyright for a small share of the profits. It breaks my librarian heart. I have done it for non-fiction in the past and it was hard to sign that line. I did it because I knew I had to sign to get what I wanted: a pretty print book in my hands. That is not to say I did not love my non-fiction publishers and editors, I did. They were wonderful to me.

When I started talking to Mr. Rochester seriously about writing fiction, he suggested I self-publish. I shook my head. I wanted a contract with a publisher, the golden ticket of affirmation in my hand. When I told my friend Jason Griffey I was writing fiction two years ago, he immediately laid out all of the reasons I should self-publish, most of which I have discussed in this post. I told him I would think about it, but what I was really thinking was that was not for me.

I have learned in two years things I did not know then, about writing and about the industry. My opinion is still evolving, but indie publishing has grown from a squalling infant to a college graduate, eager to please and show what it can do. I think the potential for indie/self-publishing is enormous  I think the way traditional publishing stands at this moment there is no growth potential. Traditional publishing is having growth and change pains. They will figure it out eventually, but it is going to be a messy, rocky road.

I have been querying publishers for almost a year now. I am waiting on four more responses. If they all come back negative, I am going to make a detailed P&L for self-publishing, draft a plan for editing and marketing, and then move forward. If I receive an offer from one of the publishers, I am still going to do a P&L and I am going to think very long and hard about saying yes.

I want a better share of the profits. I want more control over my copyright. I also want that golden ticket of affirmation from the industry, but I want to build a platform over the course of my career more than I need a publisher’s approval.

–Jane, happy to be writing

2 thoughts on “What the Golden Ticket Really Costs

  • May 20, 2013 at 11:36 am
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    It’s been so interesting to me, working with authors and reading the relevant discussions as I do. Of course there are “traditional publishing or bust” voices and “anyone who doesn’t self-pub is an idiot” voices and I think both are extreme…

    My opinion now is that self-publishing clearly works out better as a numbers issue unless you’re one of the tiny handful of books that a big publisher decides to do a huge publicity campaign for (jackpot!) — BUT it requires a ton of skill to market. These are skills that are easy to overlook if you happen to live on social media — they just get incorporated into your day and feel like air — but they truly are learned things and not everyone has learned them, and not everyone is interested in spending their time that way. Being good at writing doesn’t confer skill at this stuff.

    You live on social media, and I think you have the skills required to do it. Were I to write a book I would have to seriously consider which route to take — I think I could do a better publicity campaign self-pub than a publisher would be likely to do for me (they don’t by and large know this web stuff either), but I don’t know that I’d want to spend the time on editing and art and distribution issues; nothing wrong with subcontracting.

    But I think at this point I would treat self-pub as my default case, and publishers would have a burden of proof in demonstrating they could be as clueful about marketing as I can be, or that the things they had to offer on the other axes made up for it.

  • May 20, 2013 at 11:42 am
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    I completely agree about the marketing aspect. While publishers want all their books to do well, they can not market them all with the same force. Some publishers do great with online marketing, Carina Press for instance is the BEST example of how to use an editorial team and authors in conjunction for great results. All the other publishers I follow pale greatly in comparison.

    If I do self-publish, I will contract with an editor and an artist for the cover. I already have some ideas about those things. I think about this often.

    It might break my book shelf loving heart to self-publish, but I think my writer’s soul will enjoy it more.

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