The Shatzkin Files


Much as I like Hugh Howey, I disagree with just about all of this recent post of his


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I need to say couple of things at the outset here. The first is that I really like and admire Hugh Howey and the fact that I disagree with almost every paragraph of this post of his shouldn’t suggest that I don’t. That’s not snark or irony; it is sincere. I think it is both noble and natural for people to defend the entities and circumstances that make possible their commercial success and it is just human nature that those who have benefited from a paradigm reflexively want to defend it. I only wish that Hugh would exhibit the same respect for that tendency when it is exhibited by authors who have done well with publishers.

The other is that I don’t see the “Amazon versus the publishing establishment” battle as a moral choice, just a tug of war between competing business interests. (There are societal questions at stake, which some might see as moral choices, but the companies involved are doing what is best for them and then arguing afterwards that it is also better for society.) When I wrote what I intended to be a balanced piece about the Amazon-Hachette battle, it brought out the troops from the indie author militia in the comment string to call me to task and accuse me of many things, including being a defender of the people who pay me (although my overall revenues from Big Five publishers is actually pretty paltry with not one active consulting client among them for well over two years). I expect this post will do the same, which I find an unpleasant prospect. On the other hand, I’m sorta stubborn about saying the things I believe nobody else is saying…

I am not trying to “make a case” here for anybody: not for the publishers and obviously not for Amazon. All I am trying to accomplish is to call out what I see as the almost certainly unintended bias in the arguments as Hugh frames them. I continue to believe that self-publishing is a useful tool that most authors should employ at one time or another but that, still almost all of the time, an author who is offered a publishing deal from a major house willing to pay an aggressive advance is better off to take it than go it alone. (If you’re not offered a substantial advance, the calculus shifts, but there is a lot of work involved in self-publishing that is not described in much detail in this post, even though Hugh Howey knows much better than I do how much work it is!) And I think that generalized advice to authors to eschew publishers in a world where print still matters and stores still matter remains, as of today, unwise. That may well change in the future, but it hasn’t changed yet.

In this post, everything preceded by [HH] was written and posted by Hugh Howey. Everything preceded by [MS] is my response. I have left nothing out from Hugh’s original post.

[HH] A few weeks ago, I speculated that Hachette might be fighting Amazon for the power to price e-books where they saw fit, or what is known as Agency pricing. That speculation was confirmed this week in a slide from Hachette’s presentation to investors:

HachetteLivre-Investor-Slide

So, no more need to speculate over what this kerfuffle is about. Hachette is strong-arming Amazon and harming its authors because they want to dictate price to a retailer, something not done practically anywhere else in the goods market. It’s something US publishers don’t even do to brick and mortar booksellers. It’s just something they want to be able to do to Amazon.

[MS] Uh, yes. It is something they want to do in the market for ebooks that they don’t need to do for print. And it is something they want to do to the entity that controls 60% of their ebook sales, which no print bookseller does. And you’d be forgiven if you got the impression from this that Hachette only wanted to control the price Amazon sells at, not the price everybody sells at, keeping it the same across retailers. It does matter how you frame things…

[HH] The biggest problem with Hachette’s strategy is that Hachette knows absolutely nothing about retail pricing. That’s not their job. It’s not their area of expertise. They don’t sell enough product direct to consumers to understand what price will maximize their earnings. Amazon, B&N, Kobo, and Apple have that data, not Hachette.

[MS] But what Amazon, B&N, Kobo, and Apple know is not how to maximize Hachette’s or Hachette’s authors’ “earnings”, however they get divided between author and publisher. What they know is how to maximize their earnings and, mainly, their market share. And only Amazon and B&N have any picture of how the interaction between ebook prices and print sales works, which deeply affects an author’s and publisher’s earnings. None of the other ebook retailers have a clue about that, and Amazon doesn’t know how bookstore sales are affected (and it would be their objective to have them affected negatively, wouldn’t it?)

[HH] Beyond their ignorance of pricing strategy, Hachette also has a strong bias toward print books. Their existing relationships with major brick and mortar retailers gets in the way of their e-book pricing. This has been confirmed by my own publishers, who have admitted privately that they would like to experiment with digital pricing but don’t want to upset print book retailers. This puts their pricing strategy at odds with their investors’ needs, their authors’ needs, even their own profitability. In sum, they are making irrational decisions with their pricing philosophy. Hachette is making the same mistake that many publishers make, which is to think that harming Amazon somehow helps themselves.

[MS] Publishers are trying to keep a print book physical distribution infrastructure alive. That’s not irrational. It is rational. And it is the crux of the difference in objectives between a publisher’s strategy and Amazon’s strategy. The more bookstores fade, the better it is for Amazon and the worse it is for publishers. This is a problem you could have read about on this blog a long time ago.

[HH] The same presentation by Hachette to investors stressed the importance of DRM and the need to fight piracy. The presentation had very little to say about authors, which would be like an oil company giving a report to prospective investors and not discussing how its current wells are performing, the proven reserves it has on-hand, and what they are doing to discover new sources of oil. You know . . . the product they make their money from. Little is also said in the presentation about readers, possibly because Hachette doesn’t know who their readers are. Again, this is a presentation to investors by a company that doesn’t know its customers. Because they have too long relied on and been beholden to middleman distributors.

[MS] I’d substitute “leveraged” for “relied on and been beholden to” in the sentence that concludes that paragraph. Up until very recently, there was no efficient means or mechanism for publishers to sell directly to readers. Their “customers” were bookstores, and they understood them very well. And all the big publishers I know are investing in learning more about who are their readers. This graf begins with the complaint that authors aren’t acknowledged by publishers and ends with the complaint that publishers don’t know their readers. And the cherry on top is a biased characterization of the value and role of brick and mortar retailers. I guess the oil company reference is just to associate bad people with each other, but it otherwise seems gratuitous. The important and relevant point is that we’re still waiting for the first major author to say “no” to a publisher. It will happen, but it hasn’t happened yet.

[HH] DRM, piracy, and high e-book prices are not what a publisher should be fighting for and bragging to its investors about. Many consumers aren’t even aware that Amazon isn’t the source of their e-book DRM. Publishers (and self-published authors) opt in or opt out of DRM as they see fit. Those of us who think about the paying customer first and foremost opt out, and we are rewarded with their repeat business and their advocacy. Those of us who don’t fret over piracy invest our time where it can actually achieve something. Publishers need to adopt these same policies with all haste. More importantly, they need to stop ripping off their authors and their customers when it comes to digital pricing.

[MS] Recent data suggests pretty strongly that taking down pirate copies increases sales. But the efficacy of DRM is a good debatable point and it shouldn’t be in a paragraph that concludes with a gratuitous slam at big publisher pricing and royalties, which have nothing to do with DRM.

[HH] We know publishers are ripping off artists and readers when it comes to e-books. Harpercollins released this slide one year ago this month:

Harper-NewsCorp-Profitability

As author Michael Sullivan broke down in this damning blog post, it shows publishers making $7.87 on a $14.99 e-book while the author only gets $2.62. For a hardback that costs twice as much at $27.99, the publisher makes $5.67 to the author’s $4.20. What used to be a fair split is now aggressive and indefensible as publishers make more money on a cheaper product while the author makes far less. Publishers are ripping off readers and writers as they shift to digital, and they are getting away with it. They are even winning the PR campaign against Amazon, a company that has fought for lower prices for its customers and higher pay for its authors.

[MS] I agree that ebook royalties should be higher. But, in fact, only authors who sell their books to publishers without competitive bids (which indicates either “no agent” or “limited appeal generated by the proposal”) are living on that 25% royalty. The others negotiated an advance that effectively paid them far more than that. And guaranteed it before the book hit the marketplace. Publishers are making a massive PR error not raising the “standard” royalty since they effectively pay much more than that now, but the authors signing contracts with them know the truth.

[HH] Let me repeat: Publishers are waging a war here for higher prices and lower royalties. $14.99 is their ideal price for an e-book that costs nothing to print, warehouse, or ship. That’s twice what mass market paperbacks used to cost, which is what they are replacing. Reminds you of how cheaper-to-produce CDs suddenly cost twice as much as cassettes simply because they were new, doesn’t it?

[MS] Now, who’s not paying attention to authors? Right, it cost nothing to print, warehouse, or ship an ebook. But it cost something to create. And for many, if not most, publisher-published books, the publisher gave the author a substantial payment before publication. Focusing on the price without considering the value is the grossest form of “ignoring the author”. And the $14.99 price is more like the equivalent of the hardback; most publishers I know charge much less for the ebook when it is being published against a printed version that’s a paperback. And, in fact, they often charge less than $14.99 when the print edition available is a hardcover!

[HH] Publishers are also colluding with one another to offer lockstep digital e-book royalties of 25%, which is indefensible. Their every actions, when it comes to DRM, to pricing, to selling direct, to offering abusive services like Author Solutions, screams to anyone with ears that they don’t care about the writers and they don’t care about the readers. It doesn’t matter what they say, it matters what they do. And what they do is charge as much as they can get away with and take as much of the split as they possibly can. And they work with their competitors and against their retail partners to pull it off.

[MS] Publishers live in a competitive marketplace in general but nowhere more than when it comes to signing authors. The 25% hasn’t moved, but every book that is signed based on a competitive situation (one agent told me that’s at least 2/3 of them; one big publisher believes they compete for 95% of what they sign) is getting an advance that is calculated on a much higher percentage than the “standard”. So they “care” about the writers. If “caring about readers” is only demonstrated by low prices, then I’d say “Hugh has a point.” The problem is that the point is in direct conflict with “caring about the writers”, whose revenue is directly related to what readers pay (with only one exception: unearned advances paid by publishers).

[HH] Their own authors defend them, partly because they don’t spend any time investigating or understanding the business in which they are engaged. One Hachette author — a good friend of mine — said something to me the other day that made me realize they don’t understand how their books are ordered by retailers or delivered by the publisher. I suppose it’s okay to write books and not worry about the rest of the business, but this same author and friend had much to say about the Amazon/Hachette dispute, but without the basic understanding of how the relationship between those two companies works. Part of the blame for not knowing falls to publishers, who keep authors at bay and away from the business aspects of publishing. It was one of my primary complaints in that old blog post. Publishers need to embrace authors as business partners, and any author who hopes to make a career at this needs to be at least a little curious about how the industry works.

[MS] This slam at Howey’s fellow authors is both uncharacteristic of him and beneath him. The Hachette authors are doing precisely the same thing Howey is doing: defending their biggest source of revenue. What’s so surprising about that? And let’s not get too worked up about what people do and don’t understand. This piece demonstrates very little understanding of the economics of brick-and-mortar and the overall effort to sustain it as long as possible.

[HH] So we can see in their own slides that publishers do not have the best interests of their artists and consumers at heart. What about Amazon? Here we have a company that forsakes profits in order to pass along the savings to: A) Readers in the form of lower prices and to: B) Authors in the form of higher pay. That’s what we know today based on their actions. Of course, some interpret Amazon’s behavior as: “Once they are big enough, Amazon will gouge customers and take advantage of authors.” If you press on numbers, you might hear that Amazon will raise e-book prices to $12.99 one day and pay authors a miserly 25% of gross. Both of which are better than what publishers offer right now.

[MS] The pricing and split speculation is a pure straw horse. We know that what Amazon does today that pleases Howey also serves their larger strategic interests: growing market share and building the installed base of Kindle users. It’s nice when interests align. But what happens when they align tells you nothing about what will happen when they don’t. The recent changes that reduced author splits from Amazon-owned Audible shouldn’t be ignored in a paragraph like this one. (Emphasis here: I don’t think Amazon was wrong or immoral to have done this, but I think those making the argument that worrying about terms changing in the future is silly should at least acknowledge what has already happened!)

[HH] This bears repeating: The very worst that Amazon might do, in some hypothetical future, according to their fiercest critics, is still better than what publishers brag to their investors about doing today.

[MS] And this bears repeating. It’s a straw horse. The argument is attributed to these unidentified “fiercest critics” because it a straw horse. Pure speculation. Who knows what is the “the very worst that Amazon might do”?

[HH] Instead of operating under the hope that publishers will improve their business practices in the future and that Amazon will reverse course and start harming writers and readers once they gain more market share, why aren’t we condemning publishers for being the problem right now while celebrating Amazon for all they are doing to expand reading habits and to provide for artists? Why?

[MS] Simple answer. Because many authors are still being very well paid and well served by publishers. That’s why.

[HH] I think two reasons: The first is that we equate publishers to bookstores and Amazon to the loss of bookstores, and we all love bookstores. This is fallacious reasoning, though. Online shopping has impacted all of retail. These changes were inevitable, and they are the result of consumer choice. How those changes played out could have been publishers colluding with a distributor to price digital works higher than their paper counterparts. That would have been bad. Amazon leading those changes with their pricing philosophy has been good.

[MS] Much of this is true. Online shopping is inevitable; the pressure on brick-and-mortar is inevitable. And we all love bookstores, even though they don’t “map” into the future very well. But it is really disingenuous to just forget that Amazon benefits by brick stores going down faster and has discounted print books as aggressively as possible as well, which has contributed to the brick-and-mortar stores decline. I’m not demonizing Amazon over this; everybody has to run their own business and they run theirs very well. But let’s not pretend that altruism is all that is working here, or that changing circumstances couldn’t change Amazon’s pricing philosophy.

[HH] The second reason for the anti-Amazon bias is that some see Amazon as the giant and little old publishers as the underdog. That’s also wrong. The publishing and bookselling arm of Amazon is likely smaller than the combined earnings of the Big 5 publishers. Amazon makes a pittance on every e-book sold, while the Big 5 make out like bandits. Also, to say that these wings of Amazon’s operations are owned by a larger entity is to ignore that the same is true for the major publishing houses. If anything, Amazon is the clear upstart and underdog here. They are new to the market, rapidly innovating, blacklisted by brick and mortar retailers, setting up shop away from the established players, and ganged up on in an illegal manner.

[MS] No question Amazon gets “ganged up on”. We have two book businesses now: Amazon and everybody else. Everybody else includes publishers and retailers and wholesalers and agents and established authors. Amazon’s decision to “make a pittance” on certain products, including some ebooks, is tactical, not altruistic. I have to admit that characterizing Amazon as an “underdog” does activate the “gag reflex”. If this doesn’t qualify as hyperbole, I’m not sure what would. Let’s be clear and real: Amazon and Hachette are both leveraging their respective negotiating positions as best they can. It’s called business. (And,, from where I sit, it looks Amazon is in the stronger position, not Hachette. I’m not sure by what measurement Amazon could be considered the underdog here; I haven’t read any other analysis that makes that claim.)

[HH] I’ll go one step further and state something both outrageous and obvious: If the Big 5 had gotten together twenty years ago and DREAMED UP an ideal business partnership, one that would increase their distribution, provide excellent customer service to their readers, improve the livelihood of their authors, keep their backlists viable and books from going out of print, reduce their 50% return rate from bookstores to 4%, provide next-day and even same-day delivery, all while only costing them 30% instead of the 45% they lose to bookstores, they couldn’t have done better than what Amazon did for them.

[MS] Lots of truth in this paragraph, up to a point. Publishers (and authors) have benefited for years from Amazon’s willingness to sell books for almost no margin and by the shift from the less-efficient sales in stores to the more-efficient sales online. I spelled out clearly in my Amazon-Hachette post that Amazon has been the most profitable print account for most trade publishers for a long time. And I am happy to give them the full credit they deserve for making the commitment necessary to make the ebook business happen. That doesn’t change the reality that as their market share grows, we can see a concentration that changes what has been a good thing into a threat. For everybody else in the book business: those who are aware of it and those who are not.

[HH] Soak that in. Publishers should have engineered Amazon from the ground-up. A company that invests in distribution networks for their products rather than pocketing profits. And instead of celebrating all the hundreds of benefits, like pre-orders and customer reviews and the savings on print runs and returns that Amazon’s algorithms provide, they are trying to figure out how to put their best resource out of business. It boggles the mind. Like those authors who fear Amazon might take royalties away tomorrow, so are happy to give up those royalties today, publishers are siding with companies that are hurting them today out of fear of their greatest ally getting even more market share tomorrow. And readers and writers are the victims of this illogical behavior.

[MS] The unreality in the suggestion that publishers are trying to put Amazon out of business is mindboggling. I have cognitive dissonance. On the one hand, I believe Hugh Howey believes what he says. On the other hand, I can’t believe he believes that! Any publisher that thought this was possible would be deluded. The idea that it is some sort of deliberate strategy to put Amazon out of business is as far from the world we actually live in as the world of Hugh’s novels is.

[HH] What is the solution? As a writer, the solution is to retain ownership of your rights. This has never been more important than it is today. E-book royalty rates are going to move to 50% of net. I know from some insiders that this is already happening for top-name authors and hot new acquisitions. Selling your manuscript now for half of what it will be worth in the very near future is a bad move. It takes years for books to come to market with a traditional publisher. If that is your publishing goal, exercise a bit more patience. Hold on to that manuscript (or self-publish it) while you write the next. Let the market come to you.

[MS] This advice ignores the fact that a large number of authors got an advance that already pre-paid them for the royalties they could conceivably have earned by doing their own self-publishing when the publishers’ sales died. (Those “insiders” referred to are almost certainly talking about how the ebook component is calculated for advances paid to big authors, not a change in the contractual percentage.) Howey is conflating agreeing to a “half of what it should be” digital royalty with “selling your manuscript for half of what it will be worth” in the future. They’re not the same thing. I guess it’s just part of the campaign to find that first big author who turns down a publishing deal to do it themselves instead. To read this post, you’d never know we haven’t had one yet! (I thought we had one three years ago, but the one author who really threatened to do it changed his mind and signed a publishing deal with Amazon instead.)

[HH] The other option is to embrace a smaller press that has more flexibility. Online print book sales and e-book adoption have helped level the playing field for small publishers. They are becoming more viable every single day. These are the true Davids. They now have the tools and ability to see their works sell to a wide audience and win awards. I put them as the second best option behind self-publishing, and I include Amazon’s imprints in this category. They offer higher royalty rates and terms similar to small presses, though some have grumbled lately that Amazon’s imprints are becoming more and more like the Big 5, so watch what you sign.

[MS] I’m always happy to see smaller presses succeed, but they have a hard time competing against the Big Five, mainly because of Amazon. They are forced (by Amazon) to sell their ebooks on “wholesale” terms, which means giving much more of the retail price they set to the supply chain. This leaves them two choices. They can set a reasonable retail price (like an Agency price) and get nearly 30% less revenue than an Agency publisher. Or they can set an artificially high price and hope the retailer will discount from it. So even if they give the author a higher percentage of ebook sales, the net might not be higher. It is hard to succeed in today’s environment as a small press, not easy.

[HH] For readers, keep doing what you’re doing. Self-publishing and small presses are booming because you care about great stories, not where they come from. You are the disruptive force in this industry, and I say that with every ounce of love I can muster. Keep disrupting by doing what you do best: Read. Write reviews. Share your enthusiasm. Infect others. Spread the joy of this greatest of pastimes. And we will trust that those who cater to your needs and to the needs of the artists you admire will be the ones who come out on top. All others will need to change their ways or perish. If they do the former, let’s cheer for them. If they persist in the latter, let’s not be sad to see them go.

[MS] I am not happy to see anybody go. The desire to make villains out of the industry establishment is the most unattractive trait of what should be a hero class: intrepid authors who forge ahead without institutional support to make success happen. There is no doubt that Amazon has made that opportunity possible for most of them and it is easy to understand why anybody who has profited from the infrastructure Amazon created would celebrate it and want to see it grow. But author success has been achieved in a wide variety of ways and the way Hugh Howey has done it is still very much the exception, not the rule. We shouldn’t leap to conclusions from unusual cases. And I think it is an iron rule of nature that it is dangerous to generalize from one’s own personal experience.

I see from a subsequent post of Hugh’s that he will be in Toronto this week at Book Summit, as will I. I hope we’ll have a chance to have a Diet Coke and talk about this while we’re up there. My Logical Marketing Agency partner Pete McCarthy and I are kicking off the show on Tuesday morning. I always love visiting Toronto.

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  • Elliot1234

    The 25% hasn’t moved, but every book that is signed based on a competitive situation (one agent told me that’s at least 2/3 of them; one big publisher believes they compete for 95% of what they sign) is getting an advance that is calculated on a much higher percentage than the “standard”.

    Of all books signed, what percentage are “signed based on a competitive situation?”

    • Read the sentence you quoted again. Two answers within.

      • Elliot1234

        Correct. But what is your figure for the industry? Is there a reason to accept that 95% of all books published have been bid on by more than one publishing firm? What do you say?

      • I don’t have a figure for “the industry”. There is no figure for “the industry”. I don’t even know if the 95 percent figure given me by one CEO is accurate for that company, or what it would be for the others. As I told you, a very powerful agent put the number at more like 2/3, and, of course, that person is talking about the experience of a large and powerful agency. It doesn’t really matter if it is 2/3 or 95 percent or half or exactly what it is. The point is that *most of the money spent in advances *is spent in a competitive situation, where the calculus is done based on the contractual royalty rates but other ways. The most successful agents look at contracts that “earn out” as failures; it demonstrates that they didn’t get the author a “fair share”, which is more than the contractual royalty rates.

        There are a couple of points to take away here, for those who choose to do so rather than just to resist anything that doesn’t fit their preconceived notions. One is that the 25% royalty for ebooks, as well as every other “standard” royalty rate, is what is paid to the authors who are the bottom tenth or third or half of the authors in commercial publishing. Half or more of the authors are getting more than that, and many are getting a LOT more than that. So you’re sorta arguing with a straw man.

        The other is that what publishers spend on authors is a much bigger percentage of the total sales dollar than the royalty rates would indicate. In other words, they’re not being nearly as “exploitive” of authors as the very common misunderstanding of the commercial realities might lead you to believe.

      • Elliot1234

        First, I haven’t argued with anything. I asked a question.

        “The point is that *most of the money spent in advances *is spent in a competitive situation, where the calculus is done based on the contractual royalty rates but other ways. “

        That may be true. However, your publishing source told you 95% of books signed were signed in a competitive situation. And the very powerful agent told you 2/3 of the books signed were signed in a competitive situation. You kindly passed the figures on to us.

        But that is very different from a situation where most of the advance money is settled in a competitive situation.

        To illustrate the point, 95% of the advance money may go to five authors who are targets of fierce competition from other publishers. Or it may go to fifty authors. What is the correct number?

        So, what percentage of books signed by publishers are signed in a competitive situation?

        What percentage of advance money goes to books in a competitive situation.

        There are definitely answers to these questions for the industry. But, we may not know the answers. And if we don’t, that is also valuable to know.

      • I answered those questions to my own satisfaction for the big publishers. You can choose to dismiss my evidence and logic, but I answered them. You want to talk about the “rest of the world”, that’s fine. But the ROW was never included in any advice I gave to anybody, toxic or otherwise.

        Both the heat and length of this conversation are disproportionate to its informational value. I don’t see the point of splitting hairs about to whom what remedies apply. And I don’t apologize for my perspective or my general circles of conversation.

      • Elliot1234

        I’m talking about the big publishers, too. So we are both talking about the big publishers. And I didn’t mention anything about toxicity or ROW.

        I accept you did answer the questions to your own satisfaction.

        But the rest of us recognize that what you have said means it is possible for 1% of signed books to get 95% of advances, and those advances are given under competitive conditions.

        So, given what we have discovered, it is reaosnable to dismiss the notion that 95% of signed books are signed under competitive conditions.

        I do dismiss your evidence and logic. The evidence is an unnamed publisher and a very powerful secret agent. The logic attempts to support a percentage of book signings with a percentage of total advances paid.

        This is not splitting hairs. If 95% of all signed books were signed under compeitive conditions, it is important for authors to know that. So examination of the claim is reasonable and productive for authors.

        And heat? This is a calm and civil discussion about competition for books among publishers..

      • Elliot, first of all, sorry if I confused your comment with somebody else’s. I don’t pay much attention to the “who”s in all of this; just focus on the “whats”.

        What I SAID (for those who read plain English and don’t embroider it with their own thoughts) is that one major house CEO SAID that 95% of the books that house bids on are contested. I also said that a big agent put that number at 2/3. That’s ALL I said. You can assume the Big House CEO was lying or (as I do) estimating based on imprecise knowledge (nobody keeps a precise tally of this) and also, sometimes, fooled by agents into *thinking *there was another bidder when there wasn’t. But all this fantasy about 1% of the books getting 95% of the advances or whatever has nothing to do with me.

      • Elliot1234

        Good. I share your skepticism, but now realize you passed along those figures to illustrate the hyperbole that is so often present in these discussions. Publishers and agents can indeed get carried away with themselves.

        And I certainly acknowledge you never said 1% of books get 95% of advances. That was simply an illustration of the illogical situation we meet when we rely on people like the publisher and agent for our information.

        It’s probably a good idea for all of us to leave the ujnsupported embroidery out of our postings and accept that what we don’t know dwarfs what we do.

      • Steven Zacharius

        As the owner of a non big 5 publisher, I will confirm that almost all deals are signed under competitive situations. Sure there is less competition for debut authors but for those with any type of successful track record, there is always competition to attract an author to your company.

      • Elliot1234

        1. Does that mean most books have more than one publisher bidding for the right to publish the book?

        2. What percentage of all fiction books published by the Big-5 have more than one publisher bidding for them?

        3. Do most of the books you publish have a competing bid from another publisher?

      • Steven Zacharius

        That means that most established authors have more than one publisher bidding for the right to publish the book. But it’s not always about money. It can be about the relationship that an author has established with their publisher and editor. There is no way of knowing what percentage of multi publishers bidding for them and I don’t think it’s a meaningful number to even bother trying to calculate. And yes, most of the books we publish are generally from a competitive bidding situation.

      • Steven Zacharius

        I have no idea of the percentage of submissions that are competitively shopped but I can tell you unequivocally that in our editorial board meetings each week; other than debut authors, almost every book presented is a negotiation to purchase. If the author has been previously published, they either aren’t happy with their existing publisher or they’re trying to get a better offer.

      • Steven Zacharius

        I don’t think this is really of any significance. Publishers are always competing with one another. Even imprints within the same publisher compete with each other at some houses, which makes no sense to me. We make the offer based on what we think is best for us. Sometimes we know we’re going to lose money on our offer but we hope to be able to build the author over a three book contract. Sometimes a publisher might want an author for their list because it’s a major name and a big attraction to get other authors. There are many varied reasons. There are many authors that are loyal to their publishers. We have some authors that have been with us for decades now as do all publishers. Authors become comfortable with their working relationship with their editor, sales and marketing people. It’s still a people business.

      • That last point hits another nail on the head. It IS a “people” business. It’s a club, although a very broad one with a lot of points of entry. Nonetheless, I think that’s part of why it is so disproportionately annoying to the people who aren’t in it.

      • Elliot1234

        I agree publishers compete. But that is no reason to think 95% of books signed have more than one publisher bidding for them.

        Can anyone tell us a business that is not a people business?

  • Must-Remain-Anonymous

    Mike, there is so much wrong with your logic and facts, it’s just impossible to begin taking this apart.

    I will just say that you are completly out of touch with the experience of most writers.By most writers, I mean those with agents, whose advances are under 20K per book, whose agents are unable to negotiate any terms other than the number of free author copies, who get their contracts on a take-it-or-leave it basis.

    Are you trying to convince writers? If so, you need to get in touch with the reality of life as a writer dealing with agents and publishing companies.

    You are spinning a fantasy 🙂 Any writer who reads and understands what is between the lines of the latest Hachette report, and who has experienced the reality of negotiating contracts with agents and publishers knows you’re wrong — and that’s the vast majority of writers out there.

    • Well, I guess I have to decide whether the CEO who said they are competing for 95% of the deals or the leading NYC agent who said publishers have to compete on two-thirds of the deals or YOU, who are quite certain that “the vast majority” of agented writers have to settle for their deals, is the most credible source. Guess what? I’m not picking you.

      In the situation you are in, if you are being offered $20k take it or leave it by one publisher, you have a real choice to make. If this is your FIRST book, I’d almost certainly go with the publisher. If it is NOT, then I’d ask if you ever earned out the $20k before. If not, I’d stick with the publisher. If you have, then maybe you have enough of a platform to follow Hugh’s advice and self-publish. But doing that is a LOT of extra work you won’t have to do for the $20k.

      And re-read the last line of the post. Maybe you didn’t get that far because you were fulminating, but it appears to be the most important piece of advice in it for you.

      • Must-Remain-Anonymous

        The 95% statistic is laughably absurd. And the idea that only the bottom rung of traditionally published authors earn the contract royalty rate is bullshit or propaganda — and insulting. We’re not that stupid.

        Do those statements, perhaps, come from the same CEO whose major publishing house is looking for “more muscle” to better enable the publishing house to “control” writers? (Hachette investor report)

        If you believe what you’re saying, you might consider that getting all your information from publishing executives and refusing to listen to all those authors with contrary experience puts you and your executive friends in an echo chamber. Echo chambers are comfortable places, but they don’t help the people in them, or the companies they run.

        Also, if you’re a consultant to the CEO’s and if you get your information from them, how can you offer much?

        If you’re trying to convince authors that Hugh is wrong, you should get in touch with the actual experience of the majority of authors out there, and not the propaganda being handed out by your executive friends.

        Authors know what they experience. They know what they earn. They know how editors (and agents) often treat them. They see their royalty statements and compare them with their fellow authors. You would be surprised how much information is exchanged privately between authors.

        While much of the interesting discussions between authors happens in private forums, a number of well established authors have gone public with their experiences. If you’re interested in learning, I would be happy to provide links. I suspect, though, you’ll tell me to shut up and go away — you prefer to listen only to those who say what you want to believe.

        I enjoy reading your blog as a insight into the way publishing executives think.

        But when you condescend to tell authors what is in their best interests based on what publishing CEOs say, you come across as patronizing at best, and manipulative and duplicitous at worst — living up up to the worst stereotypes of the industry 🙂

        I know, I know. You want me to leave and shut up 🙂

        But consider it is my affection and ties to the industry which cause me to hope that you and those on top might actually listen to what authors are saying — and I don’t mean the handful who earn millions each year, but the majority authors who wrote the 16,000+ new titles published by Hachette in 2013.

        Unless, of course, you don’t intend — or want — actual authors to read your blog. You want only those who make the echo chamber fun.

      • You know what?: I really don’t care who reads my blog and who doesn’t. And I don’t get “all my information” from CEOs. I book the DBW confererence: *every one* of the 150 or so speakers and I speak to a lot more than that to get them. I booked Hugh Howey to speak before most people knew who he was. My sources are wide and varied and my experience is very long. You don’t think you can benefit from that experience? Don’t read me.

        I don’t respond well to insults. So I just don’t respond. And, frankly, you’ve said enough so I can tell you with assurance that I don’t have time to “learn” from you.

      • Steven Zacharius

        I would agree with Mike and say that almost all of our submissions that are brought up at our editorial board meetings require negotiation. It’s very rare that the author or agent just accepts what we offer. When a book is submitted by an agent we are almost always competing with another publishing house to buy the rights to publish that book.

      • Elliot1234

        What percentage of the number of submissions brought up at the meetings have a current offer from another publishing house?

      • They don’t always know. AS WRITTEN IN THE PIECE: one Big House CEO believed 25% and one major agent believed two-thirds.

      • Steven Zacharius

        There’s no way of knowing and it’s really not relevant. We can be competing with other publishers, or even what the agent or author thinks the book is worth. We only would know if the agent told us or if it’s a previously published author and we’re trying to lure them away from their current publisher. Generally publishers will target authors that they want to go after. It’s a long process, several years. We research when their contracts expire with their current publisher and have constant dialog with their agents, assuming they have one. We also get a lot of submissions from first time authors where we’re not bidding against anybody else necessarily. There’s a huge difference in negotiating with a debut author or an established author with a big following.

      • Elliot1234

        OK. But Steve told us just above,
        I would agree with Mike and say that almost all of our submissions that are brought up at our editorial board meetings require negotiation.

        So I presume he knows the competitive situation for books brought up in the editorial meetings.

        Are all books brought up in the editorial meetings, or just a subset?

        However, I wouldn’t consider negotiating with an author or agent competition. We have competition when two or more parties are striving for a single prize. In the case of negotiating with an author over value, we have one publisher and one author. No competition.

        I have no doubt there is a great difference in negotiating with a debut author compared to an established author.

        Perhaps some authgors will telkl us about how they were the subject of competition between rival publishing houses.

      • Elliot, that’s not a conversation I’m inviting people to have on this blog, on which I feel the responsibility to read every thing that’s posted. If you want to host that dialogue, feel free.

        This detail has already gotten far more time and bandwidth than it is actually worth. I don’t know what you’re proving to whom, but it feels a long way from making any point or delivering any insight that I think is productive. Some other host may feel differently.

        Final answers on this topic as far as I’m concerned. The only books that don’t come up in editorial meetings are those deals that are so big that they’re taking place at the top and there’s no need for any group discussion. That is: the most “competitive” books of all.

        Agents manage the conversations with each publisher. On the one hand, they try to create the most competitive picture that they can. On the other hand, it’s a small industry, they have to make deals with the same people over and over again, and people move between houses so secrets are hard to keep. How many are “actually” competitive is something the agent knows more accurately than the publisher. That’s why I gave you both numbers in the original post. You’re still not getting all the understanding you could get from just reading what I wrote in the first place.

      • Elliot1234

        Its important for authors to know that it is very unlikely there will be multiple publishers bidding for their work.

        As Steve said, there are two systems now, and authors considering them need good information. Your blog does great work in that regard.

        And its important for them to know what publishers consider competition, so they can evaluate future claims.

        I accept that salesmen will try to convince buyers there is some other buyer waiting in the wings. Most of us know better.

      • Steven Zacharius

        We don’t always know if there’s competition in bidding for an author. Sometimes an agent will tell us they have other offers….sometimes they’re bluffing. The publisher has to base their offer on what they think they will sell and how it will contribute to their profit. There are loads of variables to consider.
        Different publishers work in different ways. 100% of the books aren’t brought to editorial board meetings in most publishing houses I’m sure. Obviously the higher the anticipated advance, the more scrutiny before we place our offer. Bookscan has helped quite a bit in disclosing sales. It’s hard for an author or agent to say they distributed x amount of copies when Bookscan shows you what 85% of the market bought.
        An author can always decide to self publish and that in itself is competition to a certain degree. But I would say that once an author is established and has published several books, there is almost always competition. Of course this depends on the genre. We publish a lot of women’s fiction which is a very competitive market. So are thrillers. But other genres have much less competition like westerns, horror, non-fiction, very literary fiction, poetry, etc….

    • Steven Zacharius

      Every single author contract is a negotiation. Publishers don’t just force a contract to the agent. There are parts that publisher’s won’t change for their protection but there are many areas that are negotiated all the time.

      • Elliot1234

        What parts?

      • You want a consultation. Not a comment string.

      • Elliot1234

        No. I don’t want a consultation. I just asked a question directly based on an immediately preceeding statement. It’s a dialog that helps us all understand.

      • Steven Zacharius

        There are parts in any boilerplate that a publisher has developed over the years that are not open to negotiation. They include liability issues and mostly legal matters that indemnify the publisher in terms of plagiarism and such. Probably a third of the contract is all legalese. But advance, term of license, number of books in the contract, payout terms, etc….are negotiable for all publishers and authors. There’s nothing set in concrete with most publishers. Digital only publishing lines might have some hard and fast rules such as a specified royalty rate because there’s no advance and royalties at specified periods, but that’s pretty typical.

    • Hi. I spent twenty years working as an author at Big 5, with well-known agents, etc. I’m also a former Hachette author (caveat: via Little, Brown, back in the day.) So I do know the world of writers, and I agree with Steven.

    • Steven Zacharius

      I’m sure MIke knows plenty of authors who make under 20K per book. I can assure you that I do. We publish a lot of authors who make under 20K a book. We also publish a lot of books where we pay more and even end up losing money on them. I don’t think it’s fair to say that a writer deserves x amount of dollars just because they wrote a book. The author has to prove themselves in the marketplace to have a value to their writing. Just because a person spent a year writing a book doesn’t mean it’s worth 20K. It could be great and worth a lot more or it could be worth nothing because it doesn’t sell any copies.

  • pixiedust8

    Sorry, I totally agree with Hugh. I think he’s a really innovative thinker, who is shedding a light on the very secretive and dysfunctional publishing industry. (The only thing I agree with you on is that ebook royalties should be higher.)

    • Hugh is definitely an innovative thinker. You’re welcome to your opinion.

    • ReadWriteThinkPlease

      I suppose Howey is an innovative thinker, if by innovative you mean imaginative and lacking any real world grounding.

      For my part, I fail to understand why rational thinkers persist in giving his flights of fancy attention. So the man wrote one book series that caught the zeitgeist. So have a lot of other authors. But one doesn’t see E.L. James, for example, consistently make an ass of herself by allowing her ego to write cheques that her intellect, alas, just doesn’t have the ability to cash.

      Howey has demonstrated time and time agin that he doesn’t know business, doesn’t understand how business works, and wouldn’t know a put from a call. The man might be a dab hand at keeping boats scratch free when docking, but when it comes to how publishing works, he’s a mere jester. His so-called Earnings Report is one logic-free laugh festival after another.

      Perhaps Howey is merely angling for the opportunity to captain Jeff Bezos’s yacht. And I’m sure Amazon appreciates – when not highly amused by – Howey’s clowning to the self-pubiished peanut gallery. But I respect the business acumen at Amazon too much to think that they want Howey’s “analysis” anywhere near their actual operations.

      The Hachette/Amazon skirmish is how businesses negotiate, especially in unknown waters like today’s digital revolution. There is no good guy/bad guy. It’s not a holy war, for all that Mr. Howey seems to think he is John the Baptist to Bezos’s publishing Jesus. It’s BUSINESS. Amazon will act in what they believe is the best interests of its shareholders; Hachette, TimeWarner and others will do the same.

      And the market – ie. Wall Street – will judge. Even more so than consumers.

      But sure, let’s give more screen space to Howey’s fantasy world. He certainly has the narrative of poor yet deserving and righteous farmboy – I mean author – firing photon torpedo after photon torpedo at the evil author annihilating Big Five Death Star down pat. Trouble is, there is no such thing as the Force in the business world (OK, except for market forces, but Howey is not strong in understanding those).

      I also love everyone pointing to the self-publishing best selling outliers as if they are the average and therefore should be used to model business decisions. So far, few have noted that the average self-published book sells less than 250 copies, and that includes Hugh “Skywalker” Howey.

      • I agree that Howey doesn’t understand the business of the business and that he is out of his depth trying to analyze and change it. But he’s not bucking for favor from Amazon or anybody else. He’s sincere. He’s just, when it comes to analyzing the publishing business, often wrong.

        However, I had a chat with him today outside Kobo’s offices in Toronto. He does know more about how metadata affects book sales than a lot of publishers do! That’s part of why he’s succeeded as an indie author. (But also because his books are very entertaining.)

      • pixiedust8

        No one is acting like Hugh Howey is a typical success story–but he does make a lot of sense and I believe he understands the industry a lot better than most publishers. If you don’t think so, that’s certainly your prerogative.

      • Steven Zacharius

        You believe that one writer has a better understanding than the thousands of people employed by publishers? You’re certainly entitled to your opinion but I don’t think that makes much sense. The publishing houses have a lot of smart people working there. Hugh is a marketing machine now and I give him a lot of credit for that. He’s become a success and his constant blogging continues to build his name recognition. More power to him. But I don’t think he understands the industry better than publishers.

      • Elliot1234

        I suppose that depends on how one sets limits for the publishing industry. Are independents part of the industry? Do the thousands of smart publishing house employees understand independent publishing better than Howey?

        What do you mean by the industry? What is included? What is not?

      • Generalization reduces meaningfulness. Hugh understands publishing in his way. He does not understand what is required (or gained) when doing it at scale; when dozens or hundreds of people team up to work on hundreds or thousands of books per year. And probably most pub house employees wouldn’t get what you could and should do if you’ve got one author’s output and nothing else demanding your time.

      • Steven Zacharius

        I don’t think there’s a publisher alive today that can’t understand Howey’s math. This isn’t rocket science. He makes a lot of money primarily because he’s writing a lot of books….more so than any publisher would probably want to print in a given year….so this is great for him. But we know how to do the math. We understand self publishing and how much the author is making with a 70/30 split from KDP or others. But there is more to publishing than just writing a book and selling it for a low price. If an author wants to write a lot of books a year, which is more than most publishers would be willing to publish for any single author, then self publishing is the right place for them.
        But I’ll say it again, discoverability is the key. Publishers have enormous advantages in promoting discovery over indie authors. Sure an indie author can have a blog, their own website, sell the book at a low price and get some good reviews. They can also get Bookbub promotions as well. But publishing houses have more options available. They meet with editors and salespeople from Apple, Amazon, BN, etc… They pay marketing dollars for placement on websites and in stores. They pay money to be included in email blasts that go out to millions of people. They also have opportunities to be a feature book in a category section online. The future of publishing is all about marketing and discoverability. It doesn’t matter if you’re an indie author or a traditionally published author. You have to be discovered to sell any meaningful amount of books.

      • Elliot1234

        So, are independents part of the publishing industry?

        I agree publishers have more promotional options available. But the availability of options is no reason for an author to presume they will be activated for his specific book. As mentioned above, the publisher is trying to make money for his bottom line.

      • Steven Zacharius

        Independent authors? Is that what you’re asking or independent publishing houses? Publishers definitely spend more money promoting the bigger authors. It only makes sense. But we do spend money on debut authors as well. We have publicity people, send out review copies, blog about the book and do all sorts of social media. We promote the books to libraries and sell them to all accounts.

      • Elliot1234

        Where do publishers get the data on independent author sales on Amazon?

      • Steven Zacharius

        My last comment and then I will wait for Mike’s next blog. Publishers don’t see indie author’s eBook sales. We can see bookscan numbers for traditionally published books. We see our own POS from major retailers. We see the effect changes in pricing has from the retailers. We also see consumer reading behavior from sites like Scribd.

      • Elliot1234

        Its been a pleasure to discuss things with you. Best of luck.

      • Elliot1234

        Lots of assertions. No cogent argument.

        Howey’s snapshots of the Amazon data was superior to anything else I have seen. Is there a better source of data on Amazon sales?

      • Steven Zacharius

        There is no source of data on Amazon sales. All of the data is hypothesized and based on estimated unit sales and not dollars billed. Indie books have very low retail prices and therefore do not add up to a substantial pot of money at the end of the day, especially if the retailer is giving away 70% of the receipts. It’s nice to take the sales snapshot of one day or a week, but it’s certainly not a valid analysis.

      • Elliot1234

        Howeys data has yet to be discredited. Im anxious to see someone do it.

        We can see from Howeys snapshots that independents have taken a substantial market share from publishers in both units and dollars.

        The retailer is giving away 70% of independent receipts to the authors. That is very good for authors.

        The retailer is giving away 70% of receipts to publishers under agency pricing. That is very good for publishers.

        What should we favor? What is good for authors, or what is good for publishers?

        A snapshot of one day is certainly a valid analysis. It is an analysis of a defined period, just like a week, month, quarter, or year is a defined period. Multiple snapshots of single days then add up to a statistically valid sample of longer periods.

        Do you have better data to offer? Can you share it?

      • You CAN NOT meaningfully compare author data without knowing unearned advances! Can not! No matter how sophisticated your statistician or what time period you use. Got that?

      • Elliot1234

        Good point. So what is the data on unearned advances? What percentage of aggregate advances are unearned? What basis to we have to think it is material? Are 1% of advances unearned, or are 75% of advances unearned. How do we know it matters?

        We make all kinds of decsions on data with varying precision. The decision being made determines the precision necessary. So if we have data on unearned advances then we can determine if it matters to a meaningful comparrison.

        Perhaps someone in the publishing busines knows? Anyone?

      • Steven Zacharius

        Every publisher will have different percentages of their advances that are unearned. It will vary based on the types of books they publish and the “size” of the authors as well. The higher the advance for an author, the bigger the odds are that it won’t earn out. This doesn’t mean the book isn’t profitable however.

      • Elliot1234

        Sure. I’m sure they vary from publisher to publisher and author to author. But Mike has a good point. If unearned advances are a significant factor, they should be included in any analysis. If they are not significant, we can dismiss them when dealing in the aggregate. If they deserve consideration, it isn’t because they exist, but because their aggregate magnitude is material.

        So calling things significant, material, or existing is not statistically satisfying. If we had a general percentage of unearned advances across the induatry, then we could use it to adjust corresponsing aggregate numbers across the industry.

        And I’m speaking of aggregates, not any specific author’s situation. I realize there is too much variation to apply any industry standard to any individual author.

        I realize books can easily be profitable without earning out. But I do encounter many people who believe the opposite.

      • I can give you two pieces of “aggregate” anecdata. One Big Five publisher has told me the share of their revenues that goes to authors is 42%, another one has said 36%. Since 15% of a hardcover (top royalty) would amount to about 30% of revenue and 8% on a paperback (pretty much top royalty) would be 16% of revenue, I think that shows you that “unearned” is a *considerable *number. In the aggregate it is very significant. But getting to exactly what it is would be very difficult to do.

      • Steven Zacharius

        There’s nothing to credit or discredit. There is not enough data available to do any sort of reasonable analysis. You can’t base revenue on units sold in a short period of time, especially when the revenue is generally low priced. How can you see that they have taken any marketshare in units or dollars from publishers? Publisher’s revenues have not declined. A snapshot of one day is not at all reasonable. You need to do a much longer period of time, several months to have any meaning to the data. In one day you could have a bestseller released like Silkworm that could sell 85,000 copies and totally distort everything else. I don’t have any better data to offer. The data pubishers rely on comes from the AAP or BISG from publishers reporting sales to these organizations. They won’t include indie authors or data from Amazon because Amazon doesn’t share their data. I find it interesting that Amazon will share their print numbers with bookscan but they don’t share their digital numbers with anyone. Furthermore, I or most publishers really have no reason to prove or disprove any of Hugh’s comments.

      • Elliot1234

        I agree you cannot base revenue forecasts on a short period of time. But you can base them on short period samples taken over a longer period of time. This is standard statistical stuff.

    • Steven Zacharius

      Why exactly is the publishing business secretive and dysfunctional? I haven’t held back any secrets or answers to questions that have been posed to me. I speak at conferences, I blog and I’m willing to share my opinion. Publishing is not rocket science. There’s only a dozen accounts left of any substantial size so you either acquire authors at a low price and build them to a successful level or you pay big bucks to poach and author and hope you can still make money on them. It’s pretty simple to understand.

  • JamieT

    Mike – you make several generalized statements about how prospective authors are paid more than 25% net based on their advance. You never once provide any specific statistics that demonstrate what the median advance for a new genre author looks like today. Do you know? I see in the comments below that you believe a $20k advance is sufficient for a debut author and my guess is that most new genre novels from unknown authors do not earn that out, if they receive even that much. If that is the case, it is sad(and says much about the Big 5’s competency in selling new authors but that is another topic entirely) and does not go very far in proving your assertion that a new author is better served going with a publisher for in essence, a one time sale of $20k which by the way generally comes along with non-compete clauses and other assorted nasties.
    You also make the comment about 95% of signed deals coming from a competetive situation. Well, isn’t that obvious? Given the Big 5 mostly do not accept unagented manuscripts and the fact that an agent is only doing their job if they solicit multiple interested parties, this appears to be a low relevance statistic. It would be much more helpful to provide a statistic that indicates how often this competition causes a material increase in compensation to the author, but I suspect it doesn’t. It is is likely the difference between a $15k advance and a $17k advance which from my perspective is equivalent to no competition. Quite frankly, if you were to present the median and average advance rates for new genre authors, that would prove whether competition truly exists or not…..if the number is between $10k and $20k – there is clearly little competition occuring.
    The reality is that the Big 5 operate very close to lockstep and it is only in very rare cases where bidding for a book pushes it out of a narrow band of advance rates. I disagree strongly with the idea that there is healthy competition for new manuscripts at this time. Having the trade industry dominated by just 5 players essentially ensures limited to no competition for authors when there is high supply and low demand. I do expect this to change, however, as Amazon continues to pick off new, talented authors who simply elect to not bother with Trade at all. I suppose though, there will always be those authors looking for “validation” above all else, even if it means living in poverty or working multiple jobs to support themselves. The Big 5 will continue to benefit from that mentality.

    • Jamie, you ask for evidence for what *I *say but provide precious little for what *you *say.

      Yes, agents *submit *to all the big houses but that doesn’t create a competitive situation because not every house bids on every book that every agent sends them. Surely you didn’t need me to tell you that!

      I don’t provide “statistics” about the median pay for genre authors because I don’t have them. Do you? Does anybody you know?

      You make up these numbers about $15k and $17k and $10k and $20k as if they mean something. They don’t.

      What I *said *was that I thought if somebody were contemplating pocketing $20,000 (or $17,000 after an agent’s cut) and balancing that against taking *no *money but taking on the responsibility and work of self-publishing, my inclination would be to take the money *unless *they had both prior evidence that they could do better *and *some sort of built-in marketing base. If you make a different choice, you won’t hurt my feelings.

      Your conspiratorial view of how the Big Five operate and your apparent belief that Amazon will be the White Knight that will save you is, based on my years of experience and observation and whatever logical faculties I can muster, pure fantasyland. I guess you’ve explained to yourself why the authors who sign with publishers do that — they are burdened with a need for “validation” which your superior self is free of.

      Congratulations on being so much nobler than all those publisher-published authors.

      • JamieT

        You inferred a lot from my post that I don’t think was there. I certainly do not consider myself to be nobler than other people of any sort. What we are discussing is a business calculus of how much a particular author’s book is worth over the length of time they are handing over their rights to a publisher. That decision should be made free of emotion but many authors have difficulty freeing themselves from that emotion and unfortunately for them publishers don’t.

        I also don’t believe it is fringe conspiracy theory thinking to infer that the Big 5 operate as a closed system – this was proven in the price-fixing case. The Big 5(formerly 6) didn’t acquire the nickname “the price-fix six” for nothing. Based on your comments, you would appear to consider the Big 5 to be a very healthy, competitive market whose members operate completely autonomously and I strongly disagree.

        Nowhere did I call Amazon a white knight. What they do offer, however, is LEGITIMATE competition to the Big 5 right now when it comes to publishing. Do I think they hold too much sway on the retail side of bookselling right now – absolutely. Will this dominance continue over time as Apple and Google and others try to pry their way in as well as other companies who are not even conceived of yet? I doubt it. I fully expect there will be more robust competition for Amazon down the road. It’s the cycle of capitalism in this country and has been for decades. People used to think of Kmart and Sears dominating retail in this country. Now it is the evils of Wal-Mart and Amazon. Tomorrow it will be someone else. This fear mongering around the monopoly, or monopsony if you prefer in this case, of Amazon is just that..fear mongering. You are old enough to have seen this cycle multiple times and so it is surprising to me to see you acting like this cycle is somehow new and more dangerous this time around.

        Bottom line is that TODAY a new author has to determine what they believe to be the best financial decision for them with a new novel and their choices are: a.) spend several years trying to sell a book for what is LIKELY to be an advance of less than $20k, possibly much less, and give up rights for a very long time and likely chain themselves to a publisher via a non-compete clause, or b.)they self-publish themselves and learn to be a business owner and develop the skills to do a lot of work to develop a brand and to lift their book out of the fray on Amazon. They can write at their own pace, publish as much as they want and be a true entrepreneur. BOTH opportunities are fraught with risk, peril and uncertainty but if you remove the emotion from the equation (and that includes the need for validation), the hard, cold business analysis SHOULD tell many people that the long-term financial opportunities with the Big 5 are severely limited at this point in time and are probably the worse they have been in 30 years for new authors.

      • I’m not sure what the point is. I certainly see self-publishing as a legitimate shortcut to chasing down an agent and a publisher (but you have to write the book first…) What I *said *was that if you have an offer from a major publisher, you’re almost certainly best off to take it. So all the stuff about how hard it would be to get to that point has nothing to do with my advice. What makes sense if you *don’t *have a deal is a much more complicated question and self-publishing should be part of the calculus. I think many agents would agree with me about that.

        Can’t recall the precise trigger for the characterization I made that you defend yourself against, but I think you said that authors went with publishers because they “needed validation”. That sure sounded like a self-serving assumption to me, and brought with it the suggestion that “they do but I don’t” as a badge of superiority.

      • Elliot1234

        I’m not sure what the point is. I certainly see self-publishing as a legitimate shortcut to chasing down an agent and a publisher (but you have to write the book first…)

        I’d say many see self-publishing as a legitimate shortcut to avoid publishers and agents. Many don’t want to deal with them. So SP is a path with several legitimate ends.

      • Steven Zacharius

        I want to clarify that the publishers do not conspire when it comes to offering advances to an author. Even big 5 publishers have different imprints within their companies offering for the same book sometimes. The alleged price fixing was to protect the retail pricing of ebooks to stop the devaluing of author’s content. If the prices were higher, the publishers and writers would both be making more money.

      • Elliot1234

        At what point do higher prices lead to lower total revenue? Are prices levels now lower than the price level that maximizes total revenue? At current price levels, what is the price elasticity for Big-5 books?

        When are you raising your prices to make more money for both yourself and authors?

      • Would vary by the book and would require considering impact on print too. Neither a formulaic or precisely knowable answer.

      • Steven Zacharius

        Pricing is not a science in publishing. Obviously lower prices lead to more sales generally if the book has a decent review, but that has nothing to do with making more revenue. There’s a crossover point in that graph where the variables will intersect. I’m not sure what the price elasticity is. Hardcover books keep going up in price, more of them are getting closer to $30.00 now; although they are often discounted…talking about printed books. The ebook price has to follow a correlation matrix to the print price and can’t be more than a certain amount. I think that is the biggest problem with when the market switched to Agency pricing making the maximum price somewhere around 12.99 for an ebook edition of a current hardcover. It was much too low and it has destroyed the hardcover printed book business.
        Publishers don’t look at raising the prices to make more money for the authors. They look at it as making more money for the bottom-line, which includes the author. When we acquire an author we’ve done a profit and loss and estimated what we expect our sales to be and base our offer on what we think the royalties will end up being. Sometimes we’re right and sometimes we’re way off; for better or worse.
        There is obviously elasticity in all pricing of all products. Some people who are voracious readers want to buy as money books as they can and they’re going to inexpensive books. Other people buy the authors they like no matter what the price is. Different models for different readers. But since you asked, we are actually raising our ebook prices now which will result in a higher digitial list price for our books and thus higher receipts for authors. This will start happening in July or August. The ebooks will still be less than the print book, as they should be. The real difference in ebook pricing should be the difference in the cost of manufacturing and distribution and discount terms, but several other factors come into play as well.

      • EricWelch

        I think a case could be made that Amazon knows exactly what that price point is and has huge amounts of data to support knowing how low a price should be to raise the total revenue. Walmart also. I suspect the publishers have no idea and that’s why they are publishers and not retailers. Publishers and manufacturers should not be in the business of setting retail prices. That should be the role of the retailer who is best positioned to use data to determine what the best price is for maximum profitability and to use loss-leaders to bring in customers.

        Don’t forget, I’m just a reader. I could care less who publishes a book, but when Steve, a publisher, says, “This is why books continue to be returnable to the publisher for the life of the book and it continues to be a very inefficient business model. But if we had to distribute only what we thought we would sell, …” I know that model is in big trouble. We also know that some retailers, like Borders, took huge advantage of the return system to inflate cash flow. You cannot succeed anymore with that kind of system when you are competing with online and POD competition. Am I right in recalling that Amazon rarely returns anything to publishers?

        I for one, as a reader, am thrilled that independent publishing is available to authors. There is some very good stuff coming from them and I wish them well. When mainstream publishers are counting on erotica (James) and Patterson (writing factory) to maintain their illusions of culture, I worry about them.

        The two strains of thought represented here continue to talk past each other but, in my opinion, are *both* right. They are just from different worlds that operate on different assumptions and neither side really seems to understand the world of the other. Doesn’t make one better than the other. I for one, am glad both opportunities exist, but the most efficient will be the more successful.

      • Amazon has other interests (and I don’t mean that as snark; I mean “if you think about this for ten seconds, you’ll realize that’s true of them and every other retailer too”) besides raising the total revenue for each individual title. I suspect their algorithms accurately reflect what they want them to reflect. And I wouldn’t be the least bit surprised if the algorithms for Hachette titles today differs from the pack in ways that it didn’t one year ago. When no retailer had more than 10 or 15 percent of a publisher’s sales, that didn’t matter. When one retailer often has 50% or more of the sales, it shouldn’t just matter to the publisher(s).

      • Steven Zacharius

        I don’t think you can make the case that Amazon or WalMart knows more about pricing that publishers. First of all they know nothing about our costs. They have no idea what was paid for a book, or in the case of printed books….what went into the manufacturing. Both of those accounts try to make their prices as low as possible. There’s nothing wrong with that at all. It’s the same thing that Sam’s, BJ’s and Costco do as well.
        Books being returnable to the publisher was a model that started decades ago and unfortunately it’s not an easy one to change. This is one of the reasons that ebooks are more profitable than printed books since there are no returns as well as no manufacturing costs. But a publisher can’t just come along and say I will sell you this book Mr. Retailer, but you can’t return it. They will cut their orders in half and it will make books harder to be discovered. Mass market books in particular were based on the premise of distributing a lot of books and selling a low percentage initially. You might not even know it, but retailers only send back the covers of paperbacks for full credit….the rest of the book gets destroyed. In fact even with hardcovers, we only put mint cartons back into storage…the others get pulped. Some publishers will rejacket hardcovers.
        Borders biggest issue wasn’t taking advantage of returns for boosting cashflow…many accounts do that all the time. This was a necessity for them to stay alive at the end.
        I’m thrilled that there is indie publishing as well. It’s a great opportunity for those writers who want to write and choose to go that route. It’s also a source for them building their sales by utilizing very low pricing and many of them then move on to traditional publishing as well.
        As I’ve said, there’s room for both types of publishing and a blend of both.

      • Elliot1234

        Amazon and Walmart know more about pricing because they have far better data on consumer behavior than publishers. They don’t jave to know anything about publishers costs for that. Consumers rarely incorporate that consuderation into their behavior.

      • Elliot, you’re out of your depth. This is a circular argument. The volume versus print cost and royalty cost might not matter to Walmart, but it DOES matter to the publishers! In even more complicated ways than it matters to other “manufacturers”. I’m getting tired of hosting the same nnitpicking points. I need to remind you that you’re in somebody else’s house, and you’re monopolizing the conversation.

      • Elliot1234

        Steve told us,

        I don’t think you can make the case that Amazon or WalMart knows more about pricing that publishers. First of all they know nothing about our costs.

        I contend Walmart doesn’t care about publishers costs in setting retail prices. Can someone tell us why they should?

        Consumers don’t care about publishers costs in deciding what too buy.

        Nobody cares about publishers costs other than publishers.

        Nitpicking? I think Steve is handling himself pretty well. Its good to se active participation in public dialog from publishers. Whats the problem?

      • Steven Zacharius

        The primary factor in determining the retail selling price of a product is the cost to the wholesaler or retailer. They can be a low margin retailer or a high end retailer.

      • Elliot1234

        No it isn’t. Demand is just as important. You can’t even know if you are a high or low margin retailer if you don’t consider demand.

        However, the factors used in determining price have nothing to do with the ability of Amazon and Walmart to collect and analyze data go goods and prices. They have data publishers don’t.

      • Steven Zacharius

        That is not correct. Costco knows their costs and applies their standard markup. Yes demand may change things sometimes such as with Harry Potter when Amazon was selling it below or at cost to capture marketshare. But that doesn’t lead to helping the bottom line. It just gives you revenue with no profit. Many retailers share consumer data with us. We get POS information from many accounts and can see the effects of drops or raises in prices immediately. Indie authors see the same thing thru the kindle portal. Publishers get that data from other retailers as well.

      • Elliot1234

        Costco definitely pays attention to demand. They couldn’t figure markup if they didn’t know what people will pay. all retailers pay attention to demand.

        I agree you get data from retailers. But you don’t get it all,

        And you don’t get the data on the other publishers that Costco has. That is valuable stuff. They don’t give anyone the full picture. Neither does Walmart or Amazon. But they do keep it, analyze it, and act on it. Thats what they have better price data than publishers.

        Do they provide the POS data with links to their customer data base profiling each buyer? They have it. they keep it. thats another reason.

        And they do all that without knowing publishers costs. I doubt the publishers share that.

      • Steven Zacharius

        Actually you’re wrong. We do get lots of data on all books sold from some of the bigger retailers.

      • Elliot1234

        Do you get everything Costco, Amazon, and Walmart have? Including links to their customer profiles. They have lots of stuff you don’t get. That is why they know more about retail pricing.

        Where do you get data on independent author sale on Amazon?

      • Steven Zacharius

        Publishers and accounts share limited information. Many of the retailers share demographic information with their vendors. They definitely share POS and some share it for the publisher’s competition as well. Bookscan shows all the POS and is a great equalizer. But no, we can’t possibly know all the details about the consumer unless they’re buying from the publisher’s website directly or from bookclubs that the publisher might own. SCribd and other subscription site share a fair amount of data about the reading habits of consumers.

      • Steven Zacharius

        They base they’re markup based on their cost. Amazon will match prices that their computer bots see on other websites.

      • Right. It’s not just about “maximizing revenue” on the product. It’s also about the consumer perception of Amazon as the low-price leader!

      • Steven Zacharius

        And capturing marketshare no matter the cost.

      • EricWelch

        I was making the case they know more about pricing to consumers. Retailers could care less about what publishers costs are. That’s a publisher’s problem and it’s my understanding that they usually price their books (hardcover) at 8 times cost. The bigger problem I hinted at is that publishers have saddled themselves with infrastructure and distribution costs that are unsupportable. Of course it will be difficult to change and of course no one wants to change because it will be painful, but IF they want to survive they must figure a way to reduce costs. There is no other industry that has a return policy and then destroys what is returned. It eliminates the need of the bookstore and publisher to even make an attempt at analyzing the market. That’s insane. They are sacrificing their monopoly (copyright gives them the monopoly to print and reproduce) and the cost savings in being able to achieve a lower cost per book with large print runs, a large disadvantage for those using POD (except they save on warehousing.) Publishers of course worry about their costs but they will have to figure out ways to reduce those costs. There are several options: offer bigger discounts to retailers for no returns, get a better handle on what sells and what doesn’t (the returns system creates an atmosphere of no accountability for overbuying), do away with these ridiculous and catastrophic celebrity advances, eliminate some of the ruinous bulk that comes with getting big, stop with the leveraged buyouts that place heavy demands on return on investment for people who could care less about publishing. That’s true of any business. I know publishing likes to think of itself as a national treasure, but so have many other now dead industries.

        My apologies to Mike. I know I’ve been overly loquacious, but as a reader I really do care about both the independent and traditional publishing. I want an environment where Robert Caro can get published and I fear that may only now exist in an independent or university venue.

      • All I can say is read “In Cold Type”. The misunderstandings about publishing built into your post are beyond the scope of a comments section to unpack.

        Or, if you prefer, presume I don’t know what I’m talking about.

      • EricWelch

        My apologies, then. Thanks for the replies and best of luck with your new venture.

      • Steven Zacharius

        Your math is way off with hardcover pricing but it’s irrelevant. That’s not the way we we calculate what we offer as an advance. We look at all of our costs including a certain percentage for overhead before making an offer. There are other products that are returnable and end up being destroyed but you’re right, it’s a bad model. Many publishers including us have had lines with very high discounts that were on returnable. They worked for a while but then the retailer still had excess copies to get rid of.
        We do not do celebrity type books at least with crazy advances. That’s not our market.
        We do not think of ourselves as a national treasure. We are a commercial publisher that publishes books that people want to read.

      • Elliot1234

        I wouldn’t dispute most pf that. And I don’t know anyplace where pricing is a science.

        But my point is we can’t rely on the idea that raising prices makes more money for both publishers and authors. We don’t know.

        What I would dispute is limiting the price difference between paper and eBooks to factors of manufacturing, distribution, and discount. That ignores the demand side of the market.

      • Elliot, for a publisher NOT to calculate the impact on both print and bookstores of ebook pricing would be prima facie malpractice and stupidity.

      • Elliot1234

        Of course it would be stupid. I hope nobody has suggested ignoring it. It is equally irresponsible for any business to ignore demand in pricing. Supply and demand.

      • Steven Zacharius

        There really is no need to price books differently other than for the cost of manufacturing. If publishers were consistent in their pricing the reader would just purchase the format that they preferred. This is the case with hardcovers versus mass market publishing as well.

      • Steven Zacharius

        Out of curiosity are there any stats for what debut authors are making in indie publishing….not just the 150 or so that come online to blog? I doubt there are, just as there aren’t for traditional publishing. Publishers don’t look at average advances the way you talk about them. Each book is a separate investment by them. And also publishers and most authors don’t come online and share their private business affairs.

    • Steven Zacharius

      The sad part is not that the publisher can’t sell a new author because we all try. The sad part is that there isn’t enough shelf space left to give them the chance to be discovered. Online retailing doesn’t have this limitation but it does have the limitation of being discovered unless you want to sell your book for $.99. Most of the new authors are not going to earn $20,000 as a debut author at a publisher or even if they self-publish. The writer isn’t making a living at that level and the publisher certainly isn’t either. This is why the publisher does indeed rely on big bestsellers and it’s ability to build new authors to bestsellers. That is our goal and what we strive for every time we publish a book. This is why most contracts are for 2 to 3 books even for a debut author. It allows us some time to try and build them even though we will lose money on those first books and even though the author isn’t making a lot of money on them either. Hopefully as they publish more books together; both sides reap the benefit.

  • Heywood Jablowme

    I’m looking forward to Joe Konrath’s fisking of this fisking. It will surely be less polite, yet more poignant.

    • Only one thing is for sure: I won’t read it!

      If my experience with him is any guide, it will be both nastier and longer. Considerably.

      • Heywood Jablowme

        Big boy pants too scary?

      • No, I’m just a busy guy and I really don’t have time for people who’s main interest in life seems to be being nasty and dismissive. And I also value brevity very highly. Joe apparently doesn’t. It’s okay; he apparently has plenty of fans and acolytes without any help from me. I don’t like the snark from you either, but at least it is brief.

      • Heywood Jablowme

        Life is rough when someone constantly points out how wrong you are about everything. Much easier to be a coward and hide behind the ‘delete comment’ button.

      • Guest

        honestly, it doesn’t seem, based on this long blog, that you do value brevity… no offense, just how it comes across.

        I like brevity too, but I like clarity and specifics even more…

      • If you’re not finding what you want here. you should look elsewhere. Last I looked nobody paid to come in or to drop out.

    • John

      Used to read J.K. as it was quite interesting… at first.

      Then I felt the man sadly turned into an author who sells his books to other self-publishers, using so much propaganda and intellectual fraud that it just became disturbing.

      But, well, that’s just an inner feeling…

      Unluckily, the more I read some of his recent articles, the more this feeling prevails.

      • I haven’t read much. He’s one of the VERY few people who has posted stuff I’ve deleted from the blog. He’d write 1000 or 1500 word comments. As long or longer than some of my posts. I tried to give him a 20 word answer and then he’d do it again. And most of it was fulmination, not logic or information. I tried to recruit him as a Digital Book World speaker in 2010 when he was pretty early in his self-publishing career and he said he was too busy writing to do anything else. Apparently, he’s now got the time for writing that he doesn’t sell. Good for him.

      • Robgb

        This is hilarious. You do know that Konrath is a millionaire because of his sales, right?

      • Of course, I do. How could anybody NOT know? And you know that he built his success on previously published work that had a following, right?

        He is in one of the two categories of successful self-publisher I see having developed so far.

      • Joshua James

        or you could say the publisher was mismanaging his career and once he got his books back, it was managed correctly and he made more money than he ever thought possible…

      • Yes, that certainly could be the case. But it wouldn’t change the fact that he wasn’t starting from a standing start. I neither deny nor begrudge Konrath his success. He is a pioneer of the “had a backlist and succeeded” category of self-publishing author. He’s done a LOT to build his audience and managed it well. But it is disingenuous to suggest that anybody can do it, and it is particularly disingenuous to say that anybody can do it even if they don’t have a published backlist and some author recognition created by publishers to build on.

      • Steven Zacharius

        Do you think that Konrath has the same deal with KDP that other indie authors have or do you think he gets something better perhaps?

      • Robgb

        I doubt it. If you go to his blog, he freely shares his numbers, including screen caps of his sales and profits. He’s quite transparent about the whole thing.

        I will tell you, from personal experience, that it’s no surprise that he’s made that kind of money. I’ve had some very, very good months as an indie, including months that far outpaced my highest traditional advance—which wasn’t chicken feed.

      • Steven Zacharius

        He shares his sales info. Do you know what his contract terms are?

      • Steven Zacharius

        And he obviously runs a very successful operation. But just like publishers have different terms for the biggest authors doesn’t mean he has the same terms as a debut kindle writer. I’m not saying that he does but I wouldn’t be surprised. But this doesn’t detract from him being successful.

      • Robgb

        The same as everyone else on KDP. 70/30, 70% to the author for each sale, minus a small download charge of half a cent or so. We’re all making considerably more on each sale than we do through traditional contracts, even at a lower price point.

      • Steven Zacharius

        I know about the splits but there is more to terms than just splits such as positioning online and such. Everyone is well aware rage kdp pays more than traditional publishing but in my opinion, you can’t just compare royalty rates. There’s everything else a publisher does and I don’t want to get into that debate. But there’s the advance and print distribution and being able to be sold at other retailers that are all valuable.

      • Robgb

        I don’t want to get into that debate, either. I can only tell you that many of my friends and I, who were all in traditional publishing, are making much more money now than we ever did in traditional, including those advances and print distribution.

        As for being able to be sold at other retailers, my print books are available at many places online (and in indie bookstores), not just Amazon, and my ebooks can be sold anywhere as well. I’ve chosen to stay exclusive with Amazon (with digital) because I’m then part of the Amazon Prime Library, which pays me $2-2.50 per borrow and is a nice side income on top of sales.

        When being exclusive with Amazon is no longer advantageous, I’ll move on. In the meantime I get nice deposits every month in my bank account from various outlets, including print, audio and ebook.

      • Steven Zacharius

        The books being available at other bookstores are only available by POD and generally if the store will order them. Almost no stores will carry them on a regular basis like they stock other books. It’s great that you’re making more money than you were making before. Like I said there are a group of indie authors who are doing very and making a nice living writing with KDP. KDP did a great job with offering this to writers. I’m confident they will change their royalty structure in the future like they did with the share of audio rights that the writers now receive and like they’re trying to do with publishers now; which make up the overwhelming majority of their publishing revenue. Amazon is putting pressure on publishers for more advantageous terms as we all know and they’re expanding their own publishing program as well. This is what publishers are upset about. I don’t think most of them really are concerned about the KDP portion of Amazon.

      • Robgb

        They may well change their royalty structure. If it drops down to 50% or even 35%, we’ll still be doing better than what we got under our traditional contracts. But let’s not forget that Apple, Nook and Kobo pay the same basic 70%, so unless they drop their rates, too, Amazon is likely to stay put or they may lose their authors. We’ll see.

        All I know is that there’s more than one way to skin a cat and I don’t regret my decision to leave traditional. Maybe that’ll change in the future. Who knows?

        Oh, and some stores are carrying my print books. Libraries, too.

        All I ask of publishers is that they make their authors happy and sell lots of books. All is good as long as the author comes first, since he or she is the reason the business exists in the first place.

      • Steven Zacharius

        There are plenty of publishers offering authors for digital only contracts between 30-50% ebook royalties. It’s not that unusual. In our digital only lines, eKensington and Lyrical Press, we do this as well. It’s totally different when you’re not offering an advance and the overhead to produce the book is much less than a traditional print book.
        I hope the publishers are making the authors happy but I would be lying if I didn’t say the publishers are first interested in us making a profit. But it goes without saying that we like to build authors so that we’re all making money. That’s what we’re in business for. I would imagine that the libraries and bookstores carrying your books would be local only because very few libraries or bookstores will carry any books from Amazon. It’s in their DNA not to support them when Amazon is hurting their business and chance of survival.

      • Robgb

        No, they’re pretty much all over the country (if not the world). Not as many libraries and bookstores as I’d like, but that will change. But until then you don’t hear me crying that so and so won’t stock my books. Because I respect the right of a retailer to make their own decision about who they will and won’t stock. They’re not in the business of pleasing me.

        But I’m not sure why it’s okay for bookstores to refuse to stock Amazon imprints but it’s not okay for Amazon to decide who they’ll stock. A bit of a disconnect there.

        I’m glad that digital imprints are giving authors 30-50%. Hopefully that’s of cover price and not net. Because that net stuff is tricky. Oh, and those discounting clauses. Those are tricky, too. But I think it’s perfectly fine to forego an advance as long as those books are continually being promoted and authors truly nurtured (book tours, magazine ads, etc.) for the cut publishers are taking. Especially since cover art, editing, etc. are fixed costs.

      • What you’re “not sure of” is kinda obvious. If you don’t see the distinction you’re just not trying hard enough. And that”tricky” net is precisely what Amazon is seeking to reduce!

      • Steven Zacharius

        In my opinion it’s not okay for bookstores to not stock Amazon books because Amazon is destroying their livelihood. They’re selling books at very very low prices which they know that nobody else can compete with. Many times on the big bestsellers they are sold at a loss. That’s of course Amazon’s choice but it makes it impossible for another company to compete unless they are a multi billion dollar firm. As far as Amazon not carrying Hachette’s books, that’s of course their choice, but it’s over a demand from them to change their long-standing terms and instead of negotiating they are using their power to just make all of their books unavailable. They only started these changes in terms after they had taken over the bulk of the online business. I’m sure there will be more competition from WalMart and others in the future but for the time being the lack of online competition is a real problem. It would also be beneficial for consumers if all ereaders would use the same epub format so you could read it on any device even though it could still have drm.
        Digital publishers are giving those higher percentage on net receipts. How could they possibly do it on cover price which is generally much higher? They would lose money on every single sale if the book was ever in a promotion. It’s a fair model because publisher and author are sharing in the receipts that are received.
        As far as the discounts clause I don’t know of any major publisher that uses that unless it’s for special sales. Someone else mentioned that once before to make it seem like traditionaly publishers were ripping authors off but this just doesn’t happen with major league publishers. There isn’t one traditional account at Kensington that has a deep discount. If there were we’d be losing money on sales to them. It’s generally for non traditional retailers and the books are sold non-returnable because of the high discount.

      • Robgb

        Hmmm. Maybe Amazon is a little butt hurt over the collusion and anti-trust stuff that publishers pulled. I don’t know what’s really going on in those negotiations and it seems to me none of us should. Aren’t these negotiations supposed to be private? Amazing how so many people claim to know what they’re all about. But I’d imagine they’re about a number of things, including terms. And yes, terms change. Retailers ask for more and suppliers balk. It happens all the time in business. You never hear this kind of uproar when Home Depot tries to negotiate new terms with lawn mower manufacturers. In fact, you don’t even hear it when Barnes & Noble does it. Not like this, at least.

        Amazon is powerful because it innovated and took bold steps to grow and has continued to invest its profits in new technologies and strategies and infrastructure, while publishers have sat on their thumbs, embracing old traditions, ignoring emerging technology, the rise of digital vs. print, until they suddenly realized—hey, we’d better get on board here, but only if there’s DRM, and only if we can charge our standard high price. Which, of course, is counter to what new technology usually does: lower prices.

        But let me understand this. Digital only imprints are offering no advances and splitting the pie 50/50 of net. Fair enough, I guess. But if there are no actual printing costs involved and only fixed cost services like cover design, formatting, editing and marketing/PR, what else is the average publishing house offering? There are no storage costs. Uploading to Amazon (or wherever) doesn’t take much. What are you guys doing to earn 50% over the length of the contract?

        I’ve written for several publishers, both big and medium, under my own name and others. And the only publisher that really brought anything concrete to the table was the publisher that everyone loves to hate—Harlequin. I wrote under a pen name, but there was one thing I knew that HQ could deliver that no other publisher I’d been involved with seemed to be capable of. And that’s readers. Harlequin readers were ravenous and you always knew you’d sell at the very least 50,000 units right out of the gate. And it only grew from there. You never failed to earn out and your fan base grew and everyone prospered.

        But such publisher loyalty is unusual. I can’t think of any other publisher that can guarantee readers like that. And, as Harlequin has discovered, those readers are not as loyal as they once were now that many of their favorite authors have jumped ship into indie waters. Because, after all, readers value the authors over the publishing house and will follow them anywhere.

        So beyond the Harlequin anomaly, what do publishers offer besides those fixed cost services that should convince an author give away 50% of his or her property? Or in other contracts, much, much more?

        I have yet to hear anyone address this in anything more than a vague manner. I hear words like “build” and “nurture,” etc., but none of it is concrete. How are you building and nurturing? Because I’m just not seeing it. What, specifically, do you do that should convince the creator of the product you sell to give up so much, when technology now allows that creator to reach the reader directly?

        Anyway, I’ll read your answer if your inclined to give one, but will probably leave this as my last post for now. I have a book to finish and a business to run.

        Thanks for the stimulating conversation. And thanks to Mike for putting up with us.

      • Steven Zacharius

        Yes. Good conversation is always welcome. Home Depot has other competitors where amazon has very little because they’re gaining marketshare with prices near or below costs on the biggest books. Amazon was not hurt when the model switched to agency. It hurt them because they could no longer gain marketshare by using these pricing tactics. They are the ones who most likely started the DOJ investigation.
        People will get familiar with the negotiations because the more people involved the greater the chance of a leak. Besides that I just went through our own negotiations with amazon which took two years to complete but they were private and not as big a deal as dealing with Hachette.
        Publishers offer a lot for their authors including promotion publicity cover design, all those things you pay for. Also blogging and review copies and bookbub ads. We do publicity for all of our digital authors plus you’re getting the advantage of the relationships that large publishers have with retailers including prime placement and getting into more promotions.

        Enough on this topic. Let’s wait for mikes next blog. Happy writing.

      • Steven Zacharius

        One last item. HQ delivered readers in series romance. There is no other series like them and they pay for dedicated space. Also the book clubs were huge but they are dying a slow death.

      • Steven Zacharius

        This may be posting twice, if so, I apologize. The 70/30 terms are well known. You don’t know what other advantageous terms they may be offering, such as positioning online or search result placement, etc…..Publishers pay for this and I’m sure for authors that are very successful on KDP they have some sort of special arrangement as well. You don’t continue to be an evangelist for Amazon without getting an additional benefit in my opinion. None of these discussions would be necessary if Amazon actually shared unit and revenue info about KDP, but they choose not to of course. That’s their prerogative.

      • Robgb

        For some reason my previous reply didn’t go through. So if this turns out to be a dupe, my apologies.

        The answer is, I doubt that Konrath has any special deal with KDP. He’s very transparent about his sales and even shows screen caps of his KDP sales pages.

        His success doesn’t surprise me, because in my first month of indie publishing alone, I earned more money than my highest advance, which wasn’t chicken feed.

        You have to remember that at 70% a book, even 10,000 sales of a $4.99 book gives the author much more than the average trad pub contract does. And many of us have sold a LOT more books than that.

      • Steven Zacharius

        Yes that is true. But from my very first huffpo blog my point was that there are several hundred indie authors making a nice living on kdp. Theses writers including you are all over the blogs like evangelists for kdp. But there are probably 50,000 others who don’t make $100 per year. There’s room for all of us in the marketplace and no reason to have hatred and animosity and call each other names just because of different models. We all want to be as successful as we can and how we choose to get there is a personal decision.

      • Amen.

  • Hachette Author

    “I guess it’s just part of the campaign to find that first big author who
    turns down a publishing deal to do it themselves instead…”

    H. M. Ward turned down over a million dollars in publisher deals:
    http://blog.demonkissed.com/?p=1387

    Brenna Aubrey turned down a six-figure publishing deal:
    http://brennaaubrey.net/2013/12/08/in-which-i-explain-why-i-turned-down-a-three-book-new-york-print-deal-to-self-publish/

    2011 New York Times Best Seller Lawrence Block is self-publishing now:
    https://www.kirkusreviews.com/features/revered-writer-becomes-merchant/

    Guess you’re not looking very hard, are you, Mike?

    • Checked all the links. It looks to me like a pretty weak refutation of my case. Anybody who wants to click through can come to their own conclusion. I’ll admit I didn’t do the research (because when it REALLY happens, it will be big news), but you having shown me this doesn’t change my feeling one iota. It will be persuasive to the already persuaded. Even one big author — which hasn’t happened yet — will be news. I already said IN THIS PIECE that self-publishing is something that makes sense for lots of people sometimes. Block is just an old pro who wants to try something new and different. Nothing wrong with that. If you want to present these three as evidence that the publishing establishment better change its ways or it won’t have any writers, I think you’ve got a pretty weak case.

      • Hachette Author

        Whoa there, cowboy… Who said anything about “making a case” that the “publishing establishment” needs to change its ways?

        I certainly didn’t.

        All I did was point out that your categorical statement — that no major writers have turned down publishing deals — was inaccurate.

      • I actually think it isn’t. Not major enough, really. There’s a reason why none of these three made any big headlines. And the larger point, really, is that the publishers have nothing to fear in terms of losing the writers they want to publish to self-publishing — at least not yet. Your finds are good “gotchas”, but that’s all they are.

      • Hachette Author

        We’re talking past each other.

        Your frame of reference is based only on what matters to trade publishers — i.e. the teeny tiny handful of lottery-winners who “make big headlines.”

        But they’re outliers, Mike, and not relevant to any real business discussion with an author about the pros and cons of different forms of publishing.

        You don’t consider six- and seven-figure-a-year-earning authors “major enough” to be relevant, and yet you advise authors to sign away their rights and take an advance of $20K if offered?

        Your advice to authors — frankly — is ignorant and toxic.

      • I don’t think the context of my knowledge and thinking is obscure. I am not trying to be all things to all people.

        Let’s put this back into the context it is IN. Hugh Howey wrote a post saying that authors should eschew publishers — *specifically big publishers — *in favor of self-publishing their work. In fact, he explicitly singled out smaller publishers (those outside my most immediate circles) as the next best choice to self-publishing and far preferable to the majors.

        I responded to that, specifically and point-by-point. And the only “position” I took was that an author offered a major publishing contract was almost certainly better off to take than not. I further refined that to acknowledge the nuance between *most *of the big publisher deals and the minority that call for advances that will earn out and therefore really have the author working on the contractual terms.

        I am not striving for a wider audience of writers who either can’t or won’t go through the Big Publisher elimination process. I am not striving for any particular audience. I am who I am, I’ve done what I’ve done, I know what I know, and I write what I think. A few thousand people seem to get value from that pretty consistently and that makes it worth doing to me.

        The *only *advice I have offered to authors is to take a major house deal if they can get one, *unless *they are an exception for one of a number of reasons I’ve enumerated elsewhere in this string. I think the characterization of that as “ignorant and toxic” is, at the very least, wildly hyperbolic. It is also gratuitously insulting. This is not a public place. It’s my house. People who come here and insult me are just exhibiting very poor manners.

      • Hachette Author

        My apologies to your offended sensibilities. No insult was intended.

        I’ll keep this brief.

        Ignorant means “lacking knowledge, information, or awareness about something.”

        Toxic means “harmful or dangerous.”

        Your advice to new authors to take a “major house deal,” if offered one, is both.

        Are you a self-publishing “expert,” too, now, Mike?

        Hybrid authors who have walked both publishing paths have earned the right to be taken seriously when offering advice to authors.

        You haven’t.

      • Ah, really. Bullshit. There’s no other word for it. Thanks for stopping by.

      • Must-Remain-Anonymous

        Hachette author: You are exactly right.

        Did you read the Hachette investor’s report? Nothing could be clearer from that report that they see their task as shifting for the international mega-bestsellers who will do for their earnings what Twilight did.

        They see mega-sellers. The rest of us? Invisible. Unimportant.

        And actually, I said “under 20K.” The agents I’ve worked with –big names — told me the average debut advance is 10K. For romance, the average is 5K.

        Harlequin authors have been very open about sharing their numbers, and in fact, are very organized in private. The advances are pathetic. But then, who cares about them? Individually, none of them are mega-sellers.

      • Must-remain-anonymous

        meant romance writers in general

      • Steven Zacharius

        It is definitely true that the average debut author would get 10K and for romance 5K. There’s a lot of new authors wanting to get published and the marketplace for printed books is continuing to shrink. So the publisher signs a three book deal with a debut author and then tries to build that author. Assuming it worked, the author gets an advance the next time around. They obviously don’t all work. But the publisher is taking a chance at investing in these authors no matter how big or small the advance is. Generally the publisher signs up the book before the manuscript is even completed. If it’s a three book deal, we’re laying out 1/3 on signing of a three book contract and we’re not going to publish books 2 and 3 for a couple of years yet. Publishing in general is not a big money making business and this is why there is such consolidation at the top. With each consolidation they publishers try to get synergies in warehousing, selling, and administration to try and boost their sales while lowering their costs just to keep their profit margins still at under 10%.

      • Joshua James

        Hey Steve,

        In my opinion, 10k is not enough, not nearly enough… 15% goes to the agent, for example, and then a third to taxes… it’s not enough to live on, not even close… which is bad enough, but then I’m presuming you also want subsidiary rights (such as film, tv, etc) as well…

        I wouldn’t sell a screenplay for 10k, so why would I sell a novel for that amount?

        Especially when I can publish it myself on Amazon, keep a higher royalty and then make that same 10k in less than a year off that title?

        I’m not discounting what you’re offering as a rationalization for your world, just explaining how a writer might view it from where they sit… because it’s a business for the writer, too, yes?

        And from a business standpoint, via the writer, that doesn’t sound like a great deal, debut author or no…

      • Joshua, if you can do the marketing to earn $10k on a novel from a standing start, more power to you. Few are the authors who can do that. I suspect most of the ones who can are in Hollywood, where lots of people have friends with a gazillion Twitter followers. That’s not most people’s world.

      • Joshua James

        I already have done that, Mike (and to be clear, my comment was to Steven, not to you) and hundreds of other writers have made a lot more than that… so it’s not a few, friend. Not even close to that. A lot more. I don’t know why you don’t know this, honestly. Especially since you’re fisking Hugh’s report and it’s pretty clear that many are.

        Anyway, that’s my testimony… if you want to talk business, that’s the business end of it from a writer’s pov.

        Like I said, I wouldn’t sell a screenplay for so little, so why would I sell a novel for that little? It doesn’t make sense, financially, unless there were other incentives (higher royalties, print only, etc)…

        Speaking from another standpoint, 10k is not a lot of money from a multi-million dollar company (a big publisher)… it’s hardly a drop in a bucket to a company that size… which leads me to believe that it’s less an investment and more of a gamble, on their part…

        Seems to me that if they invested more money in an author, said investment partners would be more motivated to get that author’s book to the top.

        But when it’s only a few thousand dollars, they’re gambling that it may take off, but if not, no big loss.

        I would want my investment partners to be very motivated for our shared success… and risking a little on their part doesn’t lend me to believe that will be true (and no, I don’t believe all authors and books are treated equally by their publishers, not at all… the big dogs get the attention, this is only logical)…

        that’s my take, fwiw… I don’t have an ax to grind, just trying to make a living, like everyone else.

      • Not exactly sure what you’re saying, but maybe you’re adding a third category that can make it work: writers in Hollywood. Which would fit for me, since I have thought for some time that the center of fiction publishing could logically move to Hollywood. (There’s a post on that somewhere in the archive.) But it is NOT true that writers without some profile or some real set of connections make stand-alone fiction work on a regular basis. Backlist and genres. That’s the bulk of the success stories. And in non-fiction, very little at all.

        As for the argument with Hugh, I conducted it paragraph by paragraph. The logic speaks for itself. Or it doesn’t. The anecdata doesn’t cut it. I checked again today with a VP at a Big Five house: they don’t even notice self-publishing as a “competitor” for the authors they want to sign. And they sign a LOT of them.

      • Joshua James

        “But it is NOT true that writers without some profile or some real set of
        connections make stand-alone fiction work on a regular basis. ”

        This is a rather bold assertion, and it’s pretty much, well, untrue… in fact, I’d point out that there are authors who have done exactly that… Amanda Hocking comes to mind (she’s now traditionally published) and I know many more, but the fact that you’d make that statement is troubling… it’s quite simply a generalization that isn’t true from what I’ve seen and experienced.

        But okay…

        Few points…

        1) I work as a screenwriter, but I don’t live in Hollywood, I live in NYC, and…

        2) I don’t publish under my own name, so any “Hollywood” connection to those books are moot, they’re unconnected… the only thing I get from my industry is that I’ve learned how to tell stories very, very well…

        3) there are many writers who make more than 10k, and own all their rights, too… that’s my point. The report shows that, my own observations have shown that, certainly there are a few who have come here to share that… I’m not trying to advocate anything, I’m simply pointing out that from a business sense, writers are making more than 10K elsewhere, and i know it can be done because I’ve done it, and I know others who have… it’s true that anecdotes are not data, true, but Hugh has backed his position up with convincing data… honestly, I’ve not found your argument convincing or compelling, sorry to say. I know you don’t care (which is why I replied to Steven originally) as you’ve stated such to many others on this thread, but there it is, since you asked.

        4) my original post to Steven, and to you in the later post was, how is 10k a good deal for me? It doesn’t seem to be a good deal, for reasons I’ve already explained. It’s not a year’s salary, for example, debut or not. If someone graduated from grad school and wanted to be an editor, would they do it for 10k a year? Or an assistant? It’s quite simply not a fair amount of money for the work, imo… again, I’m not advocating anything other than a good deal for the writer… I love books, I love novels, and I’ve turned down a couple of deals in the past simply because they were bad deals for me. If I got a good deal, I’d take it.

        How is 10k for the entire lifetime of rights for a book a good deal?

      • First of all, the original statement is that there are only two CATEGORIES of commercial success. The Amanda Hockings are rare, and she found it so much work to do the marketing and self-publishing that she was delighted to take a publishing deal. (For considerably more than $10,000, of course.) I am sure you can find five or ten examples of just about anything; it’s a big Internet and a lot of things have been tried. But the voices I hear repeatedly fit into the two categories I defined.

        I don’t know how you build a book without a brand, although I assume your non-Hollywood pen-name is getting better established as you do it more. If you’ve got a repeatable way to do that, you should sell it. To publishers and to authors.

        And it wasn’t so much your *name *that I thought would give you an advantage. If you work with Hollywood, you could know actors and others with large followings who could help jump-start your social network marketing. If that’s *not* how you “do it”, then I really want to know more because you may be on to something that should be presented at Digital Book World. I don’t resist education; I seek it and promote it. And, whatever are the deficiencies in my information and opinion, they are not the fault of not talking to enough people in all walks of publishing life.

        And I’m not sure where the $10k marker came from. I think an author being offered $10k who has ambition and thinks they have marketing skills might well want to try it themselves; they aren’t risking that much. But to do it yourself, you have to know how to have the book competently edited and you have to have both knowledge and effort to devote to marketing. And then it might not work — and maybe wouldn’t have anyway — and you’re out the $10k because you took a risk you could have had a publisher take.

        Both the risk and the work beyond the writing are what the publisher gets paid for. And neither of them are cost-free if you take it on yourself.

      • Joshua James

        Mike, what I will tell you is that there are a LOT of authors who are having success self publishing, making a lot more than 10k, and they are not all outliers like Hocking… I bet if you put out a question on your blog, asking honestly, you’d get tons of them. You would. Not millionaires, but definitely people making more than they did at their day job…

        You could, if you’re interested. You ask me how I did it (and no, I didn’t do a big social network, hardly anyone knows my pen name) but I’m not the only one who has done it, and this isn’t about that, anyway.

        It’s about whether or not 10K is a good deal (and remember, I’m responding to Steven’s post about how 10k was the usual advance) and, quite simply, it’s not.

        As I pointed out, big publishers (like Hatchette, for example) are multi-million dollar companies… 10k is NOT a risk to a corporation like that, it’s a gamble.

        It’s a gamble for someone like me, because they could mishandle and mess up the publishing of my book (and you know this happens, you know there are books that don’t succeed) and all I get out of it is $7500 after my agent’s commission, and I can’t publish any other books while I’m under contract, and I don’t see royalties for a year and a half after it’s finally in stores.

        You’re speaking as though 10k is a risk for a publisher of that size… It’s not. They’re playing the Lotto, basically.

        it’s a risk for the author, a huge one.

        The risk is all on the author when it comes to a number that low for an advance, and it’s not worth it, especially if the author is talented and the book is in the right genre, you can make that 10k faster and control the publishing decisions. I lose more than 10k, in a sense, because I lose the book forever.

        If I control it and it’s not working, I can change the cover, re-edit it, take it down and rewrite it, I can make changes… I can’t do that if I sold the rights for pennies and it’s been written off as a failure and I’m no longer free to make it work or write other books.

        If the publisher pays a larger advance, they’ll be more invested in making the book a success… for a small amount, I doubt they’ll be as motivated to get the book on the charts. They’re just hoping to be lucky, aren’t they?

        I’m not advocating anything, I’m again, simply asking, how is 10k for the rights of a novel a good deal for the writer?

        I would never sign such a low deal unless it was for print only, or high royalty and control over cover, etc…

        that’s just me, but there it is.

      • Robgb

        Amen.

      • Once again, I don’t know where the $10k number came from. I agree it’s low.
        But I also think your description of “lots of writers” is too vague to be convincing and your description of *how *you’re doing it too sketchy to be instructive. As for putting the call on the blog, I haven’t noticed any shortage of indie writers reading or commenting here. You came forward and volunteered yourself as an example, without any detail.

        The problem with this conversation is that is all anecdata. There are clearly enough successful self-publishers among those with backlists reclaimed and in genres writing frequently that we don’t need to argue about it; we agree that there are many such success stories. Even *there*, though, we don’t know anything about the *odds*, just the logic. It won’t prove anything if we find two or eight or sixteen “success stories” that are one-offs, unless they describe themselves sufficiently for us to understand the *logic *behind how they made it work.

        So, I won’t take your “word” for it; I don’t think you know anything but anecdotes. You won’t take my “word” for the fact that the one-off successes are too few in number to suggest a pattern that is replicable. I guess we leave it at that.

      • Joshua James

        Mike, you’re being deliberately obtuse, which leads me to believe you’re not interested in an honest dialogue.

        Here’s where you will probably comment that, “if I’m not getting what i need here, I don’t have to come here,” which is true, but if you don’t like to dialogue honestly about important issues in our industry, why write a very public blog on it and respond to a hundred or so comments?

        So my word is bad, but your word is “good”? I take issue with your characterization of me, I’ve been polite and civil and here you are basically calling me a liar. I hope that you apologize, because it’s called for. You can disagree with someone without calling them a liar, you know. I’m pretty damn offended, sir.

        I explained where the 10k number came from, it came from Steve, way above, and why my post was originally directed to him… you agree that it’s probably too low, but you don’t offer any explanation as to why it’s a good deal for me or any other writer.

        All I asked, all throughout this damned thread, is how is 10k for a novel in any way a good deal for a writer and why should they accept it, that’s all I asked.

        You’d ducked and dodged that question every single fucking time and are just now admitting, hey, maybe it’s a little low… but where’d it come from (seriously?!) and that’s it?!

        Do you care about writers at all, sir?

        Regardless, I don’t need to engage here with you and be called a liar when I’ve offered up my experiences in good faith…

      • Joshua James

        and btw, you mentioned TWICE that you didn’t know where the 10k marker came from, and I answered it EACH time… are you NOT reading these comments?!

      • Got it. From Steve! I do read the comments, but I read them in email separated from all other comments.

        Tell me that you’ve explained what work it takes to make self-publishing successful and I’ve missed that (no matter how many times I’ve asked) and I’ll owe you an apology. I don’t think I do. Do you owe me one for consistently ignoring that question?

      • Joshua James

        Hey Mike, I’m happy to explain that to you, if you want, but it’s a long conversation and you’ve writ below how you don’t like 1500 long comment creeds… honestly, I’m suspecting now that you aren’t really interested, to be honest… but step one, write a great book that the target audience loves… that’s the first step, really.

        I can go on, but decided against going on about it at length when you ignored MY question again and again…
        and, in fact, you still haven’t adequately answered it…

        And I’m not the one blogging about this, you are… again, you could offer up a post asking indie authors how they succeeded and you might be surprised at some of the responses you’ll get.

        Even better, ask the hybrid authors, the ones who were trad published but unhappy with their publisher, went indie and did it their way and had even more success…. ask them what they did differently from their publisher that pushed their books farther…

        There are a lot of blogs and sites that give advice on how to get one’s book out there, I read most of them, took the advice that worked for me, ignored the advice that didn’t… that’s how I did it, in a nutshell, so far (and I write really well and work at thinking about it as a business, too).

      • I don’t know what question of yours I ignored. And perhaps you don’t know this, but I have been putting successful self-published authors on programs and in spotlights for years. I asked Konrath to speak in 2010, but at that point he was saying he spends all his time writing and didn’t want to talk. I wrote about Eisler when he made the announcement he’d self-publish, and then put him on a program at BEA. I put Hugh Howey on the stage at Digital Book World 18 months ago. I am not the least bit resistant to learning *how* people do this stuff but I will admit I’m really bored with people telling me *that* yet another person has done this stuff. We know that. We also know that most of the success stories fit into the two categories I defined. You’re telling me in very general terms that there are lots of successes outside the categories.

        Yes, my agenda — my JOB — is education for publishers, not authors. But, as the graf above should demonstrate, I’m totally on board with the idea that authors have things to teach publishers. If I understood one solitary detail of the how of what you do, maybe I’d find something in there YOU could teach a publisher. And I’m perfectly happy to have that conversation off the blog. (You’re right; I HATE long comments.) But so far, you’ve managed to expend a lot of verbiage without a single solitary point being made clear about that.

      • Joshua James

        Just answered above…

      • Joshua James

        I’d say Mike that I don’t want to teach publishers anything…

        I want to make a good deal and get my books into reader’s hands…

        Maybe it’s because I also work in another writing biz, but I value my work and wonder if a huge corporation that only offers a pittance for an IP does the same.

        I’d say, NO, in fact.

        As I mentioned before, I want a partner who is as invested in my work as I am, and as committed to its success as I am… and offering up a very little advance and hoping for the best, that’s not enough for me… a really good writer who is not afraid of putting the time in to market their books themselves can make more money on their own…

        Me, I’d rather have a big publisher take care of that for me, you bet. But we both know that sometimes it works, and a lot of times it doesn’t…

        When I sell a script, I lose it forever… that’s part of writing movies. So I make sure that I get fairly compensated when that happens, or I don’t sell it.

        I feel the same way about books.

        And you could engage Joe or Barry now, if you wanted to, and learn from them…

      • Thanks. I’ll pass on that last suggestion. Your position makes sense, for you.

      • Joshua James

        This is my position:

        “As I mentioned before, I want a partner who is as invested in my work
        as I am, and as committed to its success as I am… and offering up a very little advance and hoping for the best, that’s not enough for me…
        a really good writer who is not afraid of putting the time in to market
        their books themselves can make more money on their own…

        Me, I’d rather have a big publisher take care of that for me, you bet. But
        we both know that sometimes it works, and a lot of times it doesn’t…

        When I sell a script, I lose it forever… that’s part of writing movies. So I make sure that I get fairly compensated when that happens, or I don’t sell it.”

        Just to clarify, are you saying, since it makes sense for me, that it doesn’t make sense for you or other writers?

        Because I was kinda thinking it was a good position for all involved.

      • OK, since we’re back to where we started, it’s probably time to stop.

        I don’t know the details, but I think you are somehow eliding or ignoring capabilities you have that aren’t that common. Self-publishing can make great sense if you’re on board for both the work and the risk it entails. You seem quite casual about both. It’s working for you, so it doesn’t matter. But I think it would matter to a lot of other people.

      • Joshua James

        I am far from casual about my craft or career, sir.

        My position is that all writers should look on this career as a business, and that we shouldn’t accept deals that aren’t good deal for us, that aren’t good business for both sides.

        That much is clear.

        I asked Steve and you why I, or anyone for that matter, should accept 10k for the rights of a novel… never got an acceptable answer, just got interrogated on my career and asked for details that weren’t really germane to the main question, either (nor are they details I want to share on a public board)…

        I’m posting under my own name, which should put some weight to my word… yet it doesn’t seem to be enough for you.

        I was just shocked that 10k is considered an average advance, and I’m still shocked… and I’m kinda nonplussed at how you’ve handled this whole dialogue, sir… so you’re right in that we are done, definitely.

      • $10k was never considered an “average advance” by ME. It is certainly a very low number if we’re talking about the average advance from Big Fives, or probably even if we’re talking about the average advance from them leaving out the top 50 or 100 authors.

        Simple answer to who should accept $10k: the authors who don’t want to do the work of a publisher but just want to write.

      • Joshua James

        see, if you had simply offered this answer up yesterday, you would have saved us both a lot of time and trouble on this thread (and btw, I’ll remind you that my original query was directed to Steven, who did make the statement re 10K, and he never answered but you stepped in)… just shows to go you…

      • I’ve gotten the fact that I answered something aimed at Steve Zacharius. You’ve repeated that enough times that even I absorbed it. And it could very well be that $10,000 is the average advance offered by Kensington, which does more genre fiction as a proportion of its total output than big houses do. But I don’t think it matters whether $10k is high, low, or average. What any author has to think about is whether they can make that much on their own without a publisher. Most almost certainly (not provable, but probable) don’t. In that case, any author has to weigh $10k in hand for no more work against the odds of earning more with a lot more work. I really don’t think it is a slam dunk decision. I think it depends on the individual case. And I think I’ve been consistent about saying that regardless of how we were characterizing that number against all other advances.

        But let’s just consider one dose of reality. Whatever you and Konrath and Eisler think, the *publishers all *tell me (and Steve has said here) they are not aware they’re having authors turn them down for self-publishing. And, as Steve also said, many self-publishing authors keep submitting to him. So what seems slam-dunk obvious to you may very well not be a consensus, even among the “writer” community that you claim to know so intimately.

        I think it is very important not to generalize too quickly or surely from one’s own experience. It is *always *limited.

      • Joshua James

        I think Barry and Joe are smart guys, but you’re putting me with them as if we’re on a team or something, they’re just someone I read. I also read Tess Gerritson’s blog, and exchange emails with her, and she’s great, and she loves her publisher. So I think you’re making a generalization about me that’s a bit casual.

        I’ve been consistent in that it’s a business for me, and the deals I turn down, I turn down for business reasons, and the deals I accept are for business reasons. I’m not anti-publisher and pro-indie, this isn’t like the Yankees and Red Sox (I don’t even like baseball)… I’m simply anti-bad deal and pro good-deal.

        I’m not here to advocate, per se, I said that many a time. I’m working for myself, and if I take on a partner, I want them to work, too, and invest in my work as much value as I think I do.

        I think a bad deal can be a bad deal for a writer even if they don’t want to publish.

        If I recall, Hugh accepted a deal from a house because it was finally the deal he could accept (print only).

        so I’m not here to offer up an evangelical POV, just sharing what I’ve learned, and that’s that a good writer can make a surprisingly good amount of money off of SPing (and yeah, that’s hearsay, just like what publishers tell you) and there are many trad published writers who do both (Lee Goldberg is one who comes to mind) who were formerly against it… and I’ve learned that one must be careful and wary of the deals one signs (to be fair, I learned that early, in screenwriting)…

        So of course writers still submit, just like trad publishers will chase after monster indie successes like Hocking and James and Howey…

      • Ultimately, doing both ultimately will be “normal”, unless publishers decide to help authors by facilitating what they would otherwise have done alone. Any author with a brand consumers know should be thinking about it whenever they write something either short or which needs to be delivered to the market quickly.

        Howey’s “print only” deal will be hard to replicate with a Big Five house, although the next rung down may find it a business worth getting into. Houghton Harcourt was willing to “publish” Amazon’s books in print to stores, except that the stores won’t play ball.

        And writers do submit, but that’s not all they do. As far as publishers can see, they also take the deals they’re offered. Until publishers perceive that authors are turning them down for self-publishing, it remains a fringe activity, no matter how many self-published authors show up at conclaves or share information with each other. I think that day will come, but it sure ain’t here yet. And it isn’t coming before Christmas.

      • You’re a pretty sensitive guy. You weren’t called a liar; you were told you offered NO specifics as to how you did this magical marketing or about other authors who have done the same. And you still haven’t.

        I think whether $10k is an offer to accept or reject depends entirely on the appetite of the writer for work and risk, the two subjects YOU don’t seem to want to engage on. I don’t disagree that $10k isn’t much for the effort of writing a book, but also doubt that the lion’s share of self-published authors, even of GOOD books, make $10k. Can I prove that statement? No. Can you prove anything to the contrary? Also, no.

        You SEEM to be saying that self-publishing is more or less as easy as pushing a button on Amazon. I find it hard to believe that YOU believe that.

        Mike

      • Joshua James

        that’s not what I’m saying at all… I said I make more than that in a year, as do many others… and I offered up a way for you to get testimony from that, but you don’t want to take anyone’s “word” for it.

        Am I going to show you my financial statements for last year or this year? Hell no, why should I? I’m not even going to tell you what my pen name is.

        Nor did I every say it was EASY. Never.

        What I will say is that I did it as an experiment, and i leaned a lot doing it, and made more money than I expected… and made some friends who were doing the same.

        That’s not enough for you, fine, I don’t care. I came here to dialogue, not try a court case…

        I came here to figure out what the deal is with trad publishing and hear thoughts from the other side of the fence… the couple times I have dealt with editors (no names) I wasn’t impressed at all, and, as I said, I turned down those offers. Because they were way low.

        that’s just my word, of course, but you know why I’m here. I aim to be traditionally published, too, I have goals I work for, but I don’t want them enough to give my work away for pennies to a business that’s not going to nurture it.

        and yeah, when say your “word” for it, in quotes like that, you’re calling to question my honesty, that’s pretty much how it’s coming across. I’m not that senistive, but you basically called me out, and now you’re backpedaling on it. Come on.

      • Gee, I don’t know why this is so hard.

        WHAT did you do? Surely you didn’t just push a button. No, I don’t want to see your income statements. No, I’m not doubting that you did what you said you did. I AM doubting that it can be done just by pushing the self-publishing button.

        And the only thing I “called you out” on was to say SOMETHING about “how”. I am not backpedaling on that. I still haven’t gotten one word of response about that. I can’t figure out why (or how) you take a question about “how” you did it and turn it into the suggestion that somebody’s doubting “that” you did it!

      • Joshua James

        I wrote a great book, got a great cover, published it… did a bit of guerilla marketing and got a bunch of great reviews…

        that’s more than one word. I’m not giving you any more, as that someone in your position can clearly ask many other authors how they did it, and you haven’t… in fact, you actively disparage them in this very thread. I used a lot of the techniques picked up from Konrath’s blog, Eisler’s blog, and many others.

        You want to know, all you have to do is read a bunch of blogs. That’s all that I did. Some were very helpful, others not.

        I was hoping that this blog would be one of the helpful ones, but it seems to be leaning toward unhelpful.

      • This is definitely NOT a blog to teach people how to successfully self-publish. Was never intended to be.

        And your comments aren’t helping to make it one.

        But you’re just *wrong *to say I haven’t engaged with lots of self-publishers about what they have done or to imply that I’m not aware of what Konrath and Eisler have done. (Has Barry finally actually self-published, or are we now confllating “published by Amazon” with “self-publishing”? They’re not the same thing. An advance is involved, and so is a lower royalty rate.)

        But, hey, if it’s as easy for you as you make it sound, you’d be a damn fool to take any deal from a publisher.

      • Joshua James

        I don’t just read blogs about self publishing, but about publishing. blogs about writing, screenwriting, all types of blogs… you asked how I did it, I told you I read blogs… read more carefully, do better, sir.

        and if you’ve truly engaged with those guys, why are you even asking me these questions?

      • Joshua James

        but consider your question, one word how I did it, answered.

      • Robgb

        My last traditional advance was 50K, spread out over two years. I made that much in a month when my first indie book was released. I think Mike and others must be suffering a kind of cognitive dissonance when it comes to this stuff. There are many, many indie authors making a lot more than I have. A LOT more. I know them. We network. We trade ideas. We know what’s going on in the indie trenches. Apparently some people don’t.

      • I have no *doubt *that you talk to each other! I think that’s where all the certainty about how big a movement this is comes from!

        Congratulations on your success. I hope whatever part of it is due to the following and brand that was built by your published work is something you acknowledge when you talk to other authors, particularly if you’re advising some that don’t have those assets.

      • Joshua James

        Mike, you missed the part where Rob pointed out that you’re suffering from a cognitive dissonance…

        and you’re suggesting that his success only happened because he was once traditionally published, but you’re ignoring the part where he made so much more money on his own than he did with trad publisher…

      • I am more suffering from a shortage of information than cognitive dissonance. I want to know HOW he earned more self-publishing. He seems to be saying “load it up on Amazon, push the button, and away you go.” We all know it can’t be as easy as that. I’m not “ignoring” that he made more than with a traditional publisher. I’m not even doubting it. But I sure don’t know HOW he did that and I’m not getting much elucidation on that point no matter how many times I ask it.

      • Joshua James

        yeah, you’re right, it’s too bad you don’t have some sort of public forum where you could use your name and position to ask indie authors how they did it and get them to share their information… erp…

        It’s too bad there’s no public forum, like kindleboards or something like that, where you could ask and get information… erp…

        it’s too bad there aren’t any really successful indie authors blogging about this, sharing their numbers and even hiring a stats guy to crunch the numbers and tell us what they mean… erp….

        Hey man, just make a new post asking indie authors how they achieved success, assure the readers you will listen honestly, and see what happens…

      • Thanks for your advice, but I’d prefer just to get information. You are much more generous with the former than you are with the latter.

      • Joshua James

        pot=kettle.

      • Steven Zacharius

        The argument could be made the other way too. That 10,000 is a lot of money to take a chance on a new writer where the publisher is going to get out a small amount of copies and lose money on that author’s first three books until the author builds a following and gains some momentum. The publisher has a lot of costs even with a debut author. Besides the manufacturing, marketing, publicity….you have all the infrastructure costs of selling, warehousing, distribution, etc…. Even for digital books the publishers have digital warehouse that cost well over $125,000 annually. In addition to that they use anti-piracy services to track books that are put up illegally to protect the author’s royalties and the publisher’s sales. That’s easily another $100,000 annually. So even for a digital book you have overhead of close to $250,000 before we sell copy one of an e-only title. I would agree with you that a writer can’t make a living on 10,000 or even 50,000, per book…..it they only write one book per year. The payout is spread over a couple of years for signing, manuscript delivery and actual publication of the book. And if that’s your full-time job, it takes a good strong backlist and quite a few year’s worth of titles to make this your full-time job. As far as the rights, the publisher has a much stronger relationship than a single author with selling bookclubs, foreign, large print, etc….

      • Joshua James

        Um, you seem to be saying that paying 10k for a novel is fair because a digital book has an overhead of 250k before you even sell a single copy?

        I think I’d call shenanigans on that statement, Steve.

        But even IF it’s true, then an investment in a book is a very important thing, but you’re then investing FAR MORE in the digital storage of the book than you are in the artist who creates it, yes?

        And if you pay them a fair amount (and a fair royalty) then that frees them up to write more books for you to profit from…

        So I’m not buying your argument that 10k is a fair price for a novel, even from a debut novelist. Especially considering that from a large, multi-million dollar corporation. As I mentioned, risking so little suggests (to me) that they’re not motivated to make it a success, they’re buying the rights and putting it out there hoping for luck.

        I’d note that no editor or assistant that works for a publisher likely makes 10k a year. No matter if they’ve never proven themselves in the market…

        I’d also note that screenplays, even from debut screenwriters, sell for much more… and many screenplays never get made into films.

        There is always risk in any business, I get that… you mention that often it takes a few books to establish an author, and I agree that sometimes it may not pay off…

        But it works both ways, sometimes the publisher mishandles the book, too and so it’s a risk for the author as well, especially when they get so little up front. They risk everything. A publisher risks a few thousand dollars.

        I’m happy to share risk, but it must be an equitable risk (in other words, if you don’t want to pay me much, give me a bigger back end, give me erights, etc) which is a fair and good business deal.

        Otherwise… pay me what it’s worth, which is so much more.

        But I would go on the record as stating that 10k for the complete rights to any novel (ebook, film, etc) for the standard royalty… bad deal.

        And I’ll state the obvious… if it’s a good enough book to get a 10k offer from a publisher, then it’s a good enough book to earn more than 10k when it’s SP’d at a higher royalty rate.

        Just my opinion, no more or less.

      • Steven Zacharius

        I’m not saying that 10,000 is fair or unfair. It is an offer that is based on a competitive situation. The publisher can offer whatever they feel the book is worth to them and the author can accept it or refuse and if they like, they can self-publish it. I was just saying that there is overhead that a publisher has that a self-publisher doesn’t have…I wasn’t using that to justify the advance. There are debut authors that get $100,000 advances too. They are pretty rare but there are certainly many new authors that get more than $10,000. And when we buy complete rights, we’re also working to sell those subsidiary rights and hopefully earn additional money for both parties. We spend a lot of time and effort trying to sell foreign, audio, large print, etc… It can quite often bring in more than the initial advance.

      • Joshua James

        Right… But I am actually saying that it’s not a good deal for a novel, debut or not.

        and to be clear, I’m not discounting the jobs that good editors, agents, publishers do, (I have a great agent)… not at all… in fact, I think that they also should be fairly compensated (and we can agree that many are)… I’m pointing out that 10k is not, in my opinion, fair compensation for the person who created the work. And that authors should refuse a deal that isn’t fair nor good business for them, but (and you know this is true) up until recently, most felt that they had no choice on the matter if they want to be published (and I’d point out that there are many, many authors who have gone on record saying this)…

        also, the publishers overhead is not really the concern of the author, anymore than the overhead of the author is the concern of the publisher… it’s just what is really a fair deal for the writer, that’s what concerns me.

        and there’s an argument to be made whether or not it truly is a competitive situation for debut authors (which I take to mean that agents can and will submit a debut novel to all the publishers at the same time so they can bid on it against each other)… but I’m not interesting in having that argument, honestly…

        Me, I just want a fair deal for authors… as should we all…

      • Steven Zacharius

        I guess it’s the definition of fair that’s in question and that will always be a subjective argument. There will be authors that a publisher might pay 10,000 to and we lose money on the book. There are authors that write six books a year and those that can only write one every two years. I think that most people probably agree that unless you truly become successful at writing, it’s not a high paying job, I can’t argue with that. Publishing itself is not a high paying industry nor is it highly profitable. But a publisher can be offering 10,000 to an author and the author might decide not to take it, obviously their choice….and then self-publish it and only sell 100 copies. It’s always a gamble. Most indie authors are not making the big money that you see mentioned online here by the more successful indie authors. I give those that are making a very nice living a lot of credit. They’re doing a professional job but unfortunately there are tens of thousands that won’t ever sell any copies and it could be because they weren’t discovered or it could be that it was a lousy story. We have the same thing in traditional publishing when I look at the profit and loss scenarios for each title a year after it was published. Some do well, some do fair and some we lost our shirt. Then I scratch my head and say, was it the story that was bad….the fact that we didn’t get out many copies….was the cover awful….did we not promote the book enough….. it’s a very tough business and it’s certainly not a science and there’s never a given that any title is going to be successful. We have books by huge authors where one can be a huge hit and the next a dud.

      • Joshua James

        Thank you for the measured and civil response. I agree that it’s not an exact science, art never is, right?

        Just a few questions:

        1) You wrote:

        “There are authors that write six books a year and those that can only write one every two years.”

        Right, but publishers don’t publish those six books a year, that’s my understanding, yes (Patterson, Clancy, farming out their work with other writers, being an exception)… my understanding is that publishers avoid high churn, true?

        2) “Publishing itself is not a high paying industry nor is it highly profitable.”

        Not profitable? You’re not speaking about the big publishers, are you?

        I would agree that there are people in publishing who do it for the love (just like there are writers who do it not for the money but for the love of it) but I’d say that those are mostly small presses… can’t you say that most publishers are either profitable or they’re not in business anymore?

        Especially the New York publishers, yes?

        I mean, isn’t Hatchette a multi-million dollar (some same billion) corporation?

        I’m simply curious, that’s all. I’m honestly not here to fight, this is the truth. I love books and I love stories and writing, but working in the field I do has taught me a lot about business, in both good and hard ways.

      • Steven Zacharius

        Yes you are 100% correct that most publishers won’t publish an author more than twice a year. Sometimes a trilogy would come out every few months but that’s the exception. We happen to publish Fern Michaels probably about five times a year….different series, some hardcover, etc….but this is rare. Most writers just aren’t this prolific but it’s generally because publishers really have room for only so many lead titles per year. I’m talking primarily mass market now….so the big houses might have five megastars and they have to have room to publish them all. They do this with different imprints but you don’t really fool the accounts too much by doing this. At Kensington we have a few major imprints but the big retailers can only buy so many titles each month. Of course they are going to give those spots to the biggest authors first.
        Most of the larger publishers are profitable but still not profitable in the sense of huge profits in comparison to other industries. Most publishers are making single digit profits based on their net revenue….under 10% for the millions and millions of dollars they invest each year. It’s a capital intensive business being a big publisher because you’re laying out advances sometimes years before the book is even published. Even the billion dollar conglomerates, most of the big 5 are still making single digit profits.
        Many of these big 5 companies keep growing by acquisition….Harlequin itself which was huge is being sold….Penguin Random merger…..Avon Morrow several years ago being bought by Hachette, etc…there isn’t much growth just from their own lines increasing sales because of lack of retail space. This is where digital has really helped in the past few years but then all of a sudden the growth came to a screeching halt.
        I don’t think you’re fighting at all; you’re bringing up good legitimate questions and I enjoy the dialog.
        I think the model of indie author self publishing some titles while traditional publishers publish some of their other books or series will probably continue to expand to allow for this multi title published growth. Frankly I don’t know how writers write that much. It is amazing.

      • Joshua James

        if you’re doing what you love, you never work a day in your life.

        screenplays are high churn, too, seriously, when you’re hired, you do a lot of drafts very quickly (6-8 weeks is the usual for a new script) and television even more so, I’m told.

        Speaking just on a practical basis for fiction, 2k words a day means you have a 60k novel done in 30 days.

        It doesn’t always work that way, of course (and it depends on the genre) but if one is writing a series and knows the characters already, it can go fast.

        the first vomit draft is the most work, the rewrite is where it gets fun.

        I mean, penny paperbacks were written that quick back in the old, old days… many were. Cozies, too, yes?

        and journalists for major periodicals, let’s admit, turn out even more words in a month than novelist…

        it really comes down to whether or not someone has something of value to say. If you do, boom.

        I was a big fan of Robert B. Parker in my college years, I know he wrote a lot of books fast.

      • Well, you’ve nailed it here but it leads ME back to what I said earlier: whether self-publishing is suitable is a very individual thing. Lots of people who love writing wouldn’t love hiring a cover designer, bucking for reviews, or even handling the inquiries that come about permissions here or rights there. Some writers would prefer other people handle that stuff for them. Some writers would believe other people would do stuff like that BETTER than they would. So if you want to follow the formula for a happy life, for most people that means not tackling all the tasks required for an end-to-end enterprise, particularly one with the potential for complications as writing and publishing books.

      • I really have to call “bullshit” on that last statement: what you call the “obvious”. You just *insist *on ignoring both risk and work transferred from publisher to writer. You may not want to acknowledge them, but they’re real. And you keep characterizing self-publishing as though everybody capable of writing something good has the skills and capabilities for it, which is really just nonsense.

        And the misinterpretation of what Steve meant with the $250,000 figure on storage — where he was talking about a company overhead figure and you compare it to what he invests in a SINGLE author (rather than ALL his authors) — is either disingenuous or extremely sloppy.

        I know you’re answering Steve and I’m answering you, but all I think about is my readers. When stuff is posted here that needs to be called out, it’s my job to do it.

      • Joshua James

        I wrote:

        “And I’ll state the obvious… if it’s a good enough book to get a 10k
        offer from a publisher, then it’s a good enough book to earn more than
        10k when it’s SP’d at a higher royalty rate.”

        This is not bullshit, but you seem very invested in it being an untrue statement… but it’s not. If you write something that has the quality to get that kind of offer (10k) from a publisher, then it’s a good enough novel to make the same amount if you SP. This is not a controversial statement, btw, a publisher believes that they can make at least 10k from it, obviously, so it stands to reason an author could do the same, too. I said it, I tested it, I know others who have… and I stand by it.

        Honestly, I’m not interested in discussing this subject further with you, Mike, as that I find your arguments lacking in good faith.

        Steve wrote:

        ” So even for a digital book you have overhead of close to $250,000 before we sell copy one of an e-only title”

        I wrote:

        ” you seem to be saying that paying 10k for a novel is fair because a
        digital book has an overhead of 250k before you even sell a single copy?”

        and you wrote:

        “And the misinterpretation of what Steve meant with the $250,000 figure
        on storage — where he was talking about a company overhead figure and
        you compare it to what he invests in a SINGLE author (rather than ALL
        his authors) — is either disingenuous or extremely sloppy.”

        I think that it’s fairly clear… I knew Steve was talking about overhead of all books (and I reference digital storage later) but challenged the assertion that a digital book has an overhead of 250k before it sells copy one of an e-only title)… so if there’s a lack of clarity, it’s not from me… he said single title, did he not?

        And seeing that I’ve had to remind you numerous times throughout in this thread where the 10k number came from and who I was originally replying to, it’s disingenuous of YOU to call me or ANYONE else sloppy, sir. You expect us to have patience with you and your busy schedule, then demonstrate the same with us. I’m perfectly willing to admit if I misspoke or miswrote or misunderstood Steve (but I don’t believe that I did, I reference publisher overhead in the next comment to him) … so I call bullshit on your bullshit comment… I don’t think you’re actually considering ALL your readers… you seem only interested in the ones who already agree with you, sir.

        As it goes, I should probably just leave you here, respectfully, as I’ve noted that you’ve said time and time again that if people aren’t finding what they need here, they can leave.

        I was interested in a dialogue, but that’s me. I wish you well.

      • The judgments about my good faith that matter come from people that know me a lot better than you do. And, while you certainly had some useful things to say, you had a remarkably lengthy way of saying them. Almost every post of yours was longer than the one it answered or the one that answered it. I’m glad for you that your writing career is obviously successful; I wouldn’t have predicted it from your comments here. The repeated suggestion that how well self-publishing will work for anybody depends only on the inherent apeal of the writing and not in any way on the skills or capabilities (ASIDE from writing) of the self-publishing author is so totally and completely wrong-headed that I can’t quite believe how often it is expressed, and not just by you. I have a similar (but more pleasant and civil) ongoing debate on the same topic going on offline with Hugh Howey.

      • Joshua James

        “The judgments about my good faith that matter come from people that know me a lot better than you do.”

        The same is true of me and everyone else… but I’m making the statement that I did based on your arguments, not your friendships, nor you as a person. You’re probably a great friend, father, son, etc. But your arguments, with me, to me haven’t seemed to have been in good faith.

        “Almost every post of yours was longer than the one it answered or the one that answered it.”

        So? It’s clarity that matters, not the word count… if you don’t like to read long comments, don’t write a blog aimed at writers. Complaining about length of a comment is a mystifying thing… we craft compelling arguments for a living, after all… deal with it or stop bitching about it… or go to Twitter, where each person gets only 140 characters. I’m very tired of you making this constant complaint like it’s a flaw. And hey, you DO read for a living, don’t you?

        ” I’m glad for you that your writing career is obviously successful; I wouldn’t have predicted it from your comments here.”

        This is a rude, snide, insulting comment and not at all professional in the slightest. Really, is this how you carry yourself? Wow, you’re a successful writer, could never have guessed… it’s beneath you, really, it’s asinine and schoolyard.

        Come on, be better than that.

        ” The repeated suggestion that how well self-publishing will work for
        anybody depends only on the inherent apeal of the writing and not in any
        way on the skills or capabilities (ASIDE from writing) of the
        self-publishing author is so totally and completely wrong-headed that I
        can’t quite believe how often it is expressed, and not just by you. ”

        Sigh. Firstly, I’m not discounting the fact that it’s hard work to SP, I’ve mentioned that so many times it’s making me dizzy. I’m sure the countless others have done the same (what you have done is question whether or not we’ve really done as we claim, saying it’s only our “word”)… I’m not even anti-publisher, not at all, I’d be happy with a great deal and I’d be happy to make money for both myself and a publisher. I don’t know why this keeps getting misunderstood by you.

        What I’ve said is that a book that is good enough to get a 10k offer from a publisher is good enough to earn that much SP…

        AND THIS IS A TRUE STATEMENT.

        How? Well, if it’s gotten an offer, then it’s already established, in a sense, as a work of some quality.

        Now nowhere do I mention that it’s easier to SP (it is quicker, however)… just that if you can earn that much from a publisher, you can also earn that much from SP… and this is true. It’s a true statement just as it’s true for the publisher (who also may or may not earn 10k on a novel). You cannot argue otherwise.

        Sure, you bet, there’s work involved in SPing, absolutely.

        Nowhere to I discount that. Never. It’s work, I’ve mentioned it, it is work (you need to hire your own editor, proofer, cover artist, do marketing) but really, it’s still less work than writing the actual book that’s good enough to publish.

        Ask Hugh, since you’re talking to hm.

        ” I have a similar (but more pleasant and civil) ongoing debate on the same topic going on offline with Hugh Howey.”

        I’m glad you’re dialoguing civilly with Hugh (though I note that you allude that he’s actually as wrongheaded as I and others you’re pained to be dealing with, just more civil, or at least, famous)… that’s wonderful. If he steps in here and tells me I’m wrong in any of my arguments, that you are arguing in good faith with me, then I’m happy to accede to his wisdom.

        and I trust he’s keeping his emails short and not at all lengthy for you.

      • You missed your era. I am told in the 19th century writers got paid by the word.

        Mike

      • Joshua James

        I’m happy in today’s era, not yesterday’s… seems from this post that you are not.

      • That’s it! Brief ripostes are MUCH more effective. Keep that in mind and it might double the sales of your next book.

        Mike

      • Joshua James

        Riiiiiight, because no long epic novel has ever become a classic in American literature. Or a best seller.

        But I must admit, it’s a wonderful strategy on your part… when you don’t want to address an argument someone has made… just complain that it’s too long for you to bother to read…

      • Nobody comes to this comment string to read epic novels so I try to discourage people from posting them here.

      • Joshua James

        right, but you advised that brevity would double sales of my next novel, so you were referring to that, not this string.

        And people come here (or any comment string) for clarity and dialogue, Mike, nothing more or less, as I’d said many a time… the strings would be shorter if you paid attention to what was said.

        But have a good life, sir.

      • I do. A very good life.

        Mike

      • Anon

        Are you crying, Mike?

      • Anonymous

        If so, your incoherent post titles alone would have earned you a living.

      • Steven Zacharius

        There are many Harlequin authors that are mega-sellers. They might start out in series romance and then move up to single title standalone novels. The Mira imprint is all single title fiction and there are many big writers in that line. Believe me there are plenty of people who care about them. I certainly do and there are many of them that I wished we published.

      • Steven Zacharius

        As I said somewhere else in this blog those six and seven figure earnings are over 20 or more books in some cases. Major authors at the biggest publishing houses are making that on one book as an advance.

      • Robgb

        And there are what, maybe a couple dozen of those? Fifty? Possibly a hundred. Out of the thousands of authors who are traditionally published? The people making large bank are outliers. And they’re the ones we hear about precisely because they’re outliers.

        What you folks seem to fail to understand is that it isn’t about making two million dollar advances or even 50K advances. It’s about controlling our work and, for the first time for many, doing it full-time for a wage that puts us square in upper middle class territory. I don’t think that’s too bad a place to be.

      • Steven Zacharius

        I don’t think that’s a bad place to be either. But I’m pretty sure that the overwhelming majority of self pub authors would like to be traditionally published. It certainly looks that way to me based on the amount of indie submissions we get every week.

      • I agree with you. For those who can do it, it’s a great place to be. But glibly suggesting that “anybody” can or even that “many do” is snake oil. Ignoring both the work and the risk.

      • Steven Zacharius

        If the authors Hachette Author is talking about are teeny tiny handful of lottery-winners….what are the handful of indie authors that have hit it big? Authors do not sign away their rights. That is so blatantly false. They sell the rights for a period of time and then the publisher tries to make money for the author and themselves by exploiting the use of those rights. Publishers are going to have much more success in selling subsidiary rights than an indie author because of their connections and infrastructure. When you look at the NYT bestseller lists of 25 or so books in fiction, non-fiction, hardcover, paperback and ebook…..that’s covering a lot of varied authors in various genres. These people aren’t outliers…and with the ebook list being included now…there are many indie authors on that list as well; which is wonderful for them and the exposure they are getting. One success leads to more name recognition for their next book. Every person who hits a list, whether indie or traditional deserves to be congratulated. It’s not an easy feat.

    • ReadWriteThinkPlease

      Ward’s figures are laughable. She did not turn down over a million dollars in deals, because at no time did anyone offer her that much money. She turned down multiple, smaller deals. She can’t add up the deals and make that claim for the very good reason that, if she had accepted one of the deals, then the others would not have come her way; and she only received the subsequent offers because she wasn’t already signed with a publisher.

      If you go by Ward’s “reasoning,” that’s like saying your house is worth over a million dollars because you turned down offers of $375,000, $325,000 and $310,000.

      In other words: complete logic and math fail.

      This is the problem with self-appointed, self-publishing mouthpieces such as Ward and Howey; they obviously can manipulate language to put together a decent sound bite, but they are wholly lacking in anything resembling real world business knowledge and acumen.

      • Thanks for this.

        Mike

      • Daniel Knight

        Actually, with just a very basic understanding of the English language you can see that what Ward said and you repeated about “turning down over a million dollars in deals” is exactly correct. “Deals” is plural, meaning that she turned down several deals that aggregated to an amount greater than a million dollars. If she had said she turned down several million dollar deals – that would have changed the meaning of the sentence to the false contortion you are trying to create.

        Aside from that, what is the benchmark when an advance is considered significant? So $375,000 is considered insignificant? Yet, Mike was ready to claim that a major author had turned down a major deal when Barry Eisler turned down a $500,000 advance.

        This article is supposed to be a refutation of an article written by Hugh Howey, who himself turned down seven figure deals with trade publishing. The deal he did finally take was very different than your standard traditional deal – in that it was print-only and absent non-compete clauses.

        So what is the metric where Mike, you will admit it counts when a major author turns to self-publishing (though the decisions of the 1% really isn’t relevant to the other 99% of authors trying to make a career out of writing)? I’m guessing it would have to be an author from a very select group: Stephen King, James Patterson, J.K. Rowling, George Martin, Dean Koontz, etc. And there is the rub – yes for these select authors (the lottery winners) traditional publishing can make sense since they get much better deals than the rest of us.

        Another major flaw in your logic Mike is that you insist that the effective royalty rate is much higher for many advances that are never earned out. That was certainly true in the old print only world. But what about now in the digital world where those books will be available forever? Given that the median advance given to a new author is around $5000 (a number backed up by numerous surveys and fairly simple to find out with a modest amount of research) it isn’t hard to earn that out over an extended duration of time (and much easier to exceed that amount when you are earning 70% royalties).

      • We don’t know how much Barry Eisler turned down.

        I don’t take an author’s word at face value.

        And, really, it doesn’t matter whether one or two or three of these not-well-known authors is actually an example or not, if the point is the POINT (big publishers are not losing authors they want to keep or sign) rather than making a point.

        Just spent a very pleasant day with Hugh Howey. He is one of the very few authors who has made himself publishing independently. He’s not typical of anything.

        You have missed (ignored) the point to the unearned advance conversation. Or to my advice. Most of those unearned advances won’t earn out in the author’s lifetime. They’ve already been well paid for the sales they might get in the future. In fact, in some cases, they get it twice: getting the overpaid advance and then getting their rights back and self-publishing for some additional income. Whether or not the advance has earned out does nothing to extend a publisher’s rights to keep a book if it isn’t in print.

      • Daniel Knight

        Mike, so part of your counterpoint is you don’t take authors at their word – and yet you want us to take your advice on the best path for publishing. When you originally reported on Barry Eisler’s deal you had no problem taking his $500,000 offer at face value. Not to mention what possible motive would Barry have to lie about the deal? On the flip side you expect us to trust your anonymous sources, which all have a vested interest in the traditional model of publishing.

        You say that the POINT is that big-publishing isn’t losing authors they want to sign – and yet here you are trying to encourage authors not to turn down traditional deals. Why would you need to say that if it was a non-issue? Why have recent reports coming out of big-publishing (including the recent Hachette report) started to emphasize how they have to show their value to authors considering self-publishing if it was not a concern for them? The fact of the matter is we have transitioned from the phase where traditional publishers ignored self-publishing to the phase where they are rightly and legitimately
        scared of its impact on their ability to attract authors. I don’t expect they are going to lose anyone like Stephen King or James Patterson anytime in the near future, but I also think their chances of attracting future Kings and Pattersons has been greatly diminished.

        To your point about Hugh Howey – you are right that he is an outlier. If your metric for success is making millions of dollars then there are probable only a few dozen authors world-wide who meet that criteria (and a significant portion of those are self-published). A more useful metric for the typical author is whether they can make a full-time living off of writing. (A recent blog post on thepassivevoice.com asking for full-time self-published authors to respond has over 480 responses)

        To your point about unearned advances, I understand your flawed argument quite well. You claim another anonymous industry inside says that the effective royalty rate is closer to 48%. Of course the first problem with using this number is that it will be skewed by the top tier advances. Let’s pretend that doesn’t matter. Still, that 48% is going to be from net, so in reality the author is only getting an effective royalty rate of 33.6%. The first thing to note is both of these numbers are much less than the 70% earned through the self-publishing route. The second problem is that these numbers will be constantly changing downward as time goes on – as more books are sold. You say that most advances will never earn out – but this was only true for the print-only world where books could actually go out of print. In the digital world a book never goes out of print (which also speaks to your point about getting your rights back and double dipping – this is virtually impossible with current traditional contracts since digital never goes out of print).

        Your argument is predicated on an old world model where print books had an extremely short window to sell (typically about 6 weeks) in a physical bookstore. In this new digital age, books don’t go out of print. New customers are being born all the time. If old books couldn’t continue to sell than why are publishers making so much money off of backlists? If old books couldn’t sell, then that puts another hole in your scenario where an author will get back their rights and be able to self-publish their books to make more money. The fact that backlist titles will continue to sell, means that the books will never go out of print (therefore no reversion of rights) and that most advances will indeed be earned out during an author’s lifetime.

        Given the state of current traditional contracts (poor royalties, lifetime copyright assignment, non-compete clauses) there are very few scenarios where self-publishing is not a better option – and thanks to information being shared by the likes of Hugh Howey more authors are learning this everyday.

      • Linking whether I take “authors” at their word and whether authors should give credence to my advice is a non sequitor.

        I recall the $500,000 offer was for TWO books. It doesn’t change the facts. Barry said he was going to self-publish when he turned down the offer. Then he didn’t.

        I’m satisfied that the Real World is that authors are not turning down real offers from real publishing houses. At least not yet. You are welcome to interpret the facts as you see them differently and I’m comfortable with those who want to accept my contentions accepting them and those who don’t rejecting them.

        Your confusion about that 48% number will be apparent to anybody who reads what I wrote with an eye to understanding it, rather than attacking it. It needs no defense from your attack.

        Facts I’ve become aware of in the past two days are indicating to me that the more authors self-publish and the more the market becomes flooded with titles, the fewer titles sell in substantial numbers and the more that hardly sell at all. I learned some of that from a great presentation by Noah Genner at Book Summit in Toronto. He showed that in Canada the number of titles being published is mushrooming, but the number of books that sell even ONE copy is remaining static.

        By the way, I had a wonderful couple of days hanging out with Hugh Howey at that event. We agree on some things, disagree on a lot of others. Neither of us have a problem with that.

      • Daniel Knight

        Mike, your counterarguments continue to lack any substance. You say that it is a logical disconnect to link your distrust of authors’ statements and whether authors should heed your advice. Have you ever taken advice from someone who thought you weren’t trustworthy? Trust is a two-way street. If you don’t trust authors to be honest with our information, why would we then turn around and trust your information or advice?

        You’re right, Barry’s offer was for multiple books, and you thought the amount was still significant. When authors get offers of even greater amounts you claim it doesn’t count because it doesn’t meet some hidden
        criteria of yours (or simply because you don’t believe them I guess).

        If the Real World is that authors aren’t turning down offers from publishing houses can you offer some examples of successful self-published authors who have taken traditional deals in the past year? You talk about facts but offer none. The impact or influence of facts can be subject to interpretation – but facts are never open to interpretation – that is why they are called facts.

        Your counter to my discussion about unearned royalties is simply that “It needs no defense from your attack.” Not much of a well-reasoned or supported rebuttal.

        Your next paragraph about fewer titles selling significant numbers (fewer relative to the increased number of titles) could very well be true. It is absolutely true that there are only so many readers at any given time. But how does this make it more prudent to take a trade offer over self-publishing? That won’t stop other people from continuing to self-publish and increase the overall pool of titles. If you think traditional publishers honestly help with discoverability I would love to hear how they do that.

        I am glad you had a great time with Hugh Howey. I wish you would be more open to understanding what he has to say. He is actively trying to help the traditional industry that you have been part of for so long. Despite your assertion to the contrary, he understands the business quite well,
        especially from the author’s perspective. Heeding his advice could go a long way to helping the Big 5 stay relevant in the new digital age.

      • Daniel, your non-sequitor remains. I don’t give a damn whether somebody “trusts me” when I decide whether their “advice” is worthwhile.

        Look, I wrote my blogpost. I think it is well-reasoned and much more substantive than Hugh’s. They stand side by side. You want to come to a different conclusion? Be my guest. But your arguments don’t engage me. My counter to your argument about royalties is that you don’t understand what I wrote. I don’t really think you want to and I’m not going to go into more detail to explain it.

        You are welcome to the assumption that my resistance to Hugh’s arguments is due to my not being “open” to what he has to say. And I don’t agree that he understand “*the* business”. I think he really understands *his *business. He seems to share your assumption that the problem is that indie authors understand the reality of publishing better than the big houses. I think you guys are wrong. Actually, laughably wrong.

        The projection in what you say is quite remarkable. Since I don’t think you’re dumb, I can only assume that your inability to comprehend what I say is due to the fact that YOU aren’t “open” to what I say. And responding to what I said about Genner’s numbers by not seeing the benefits of a *guaranteed *payment in advance versus a flyer on self-publishing (that must cost something, in time and money) is a pretty clear demonstration of that.
        It is more effort than I care to give it to engage in this dialogue any further. If my answers are unsatisfying to you, we’ll just have to leave it at that.

      • Steven Zacharius

        There are many authors that are hybrid authors…they do some self publishing and some with traditional publishers. So clearly they see a benefit in both types of publishing. We just resigned an author yesterday who is a successful indie author and we’re doing her books in print as well as a contract for 3 new original titles. We work together to make sure we each compliment each other’s publishing and that we don’t overlap the publishing schedule to maximize sales.

      • Steven Zacharius

        I can’t begin to tell you how many authors are unearned after a long period of time. There are backlist books that sell well and some that will sell ten copies in a year. Those slow movers will never ever earn out. The copyright is not lifetime. This is far from the truth. The reversion period varies from publisher to publisher but most contracts say if the book is out of stock and also not selling x amount of copies or x amount of $ in a royalty period…..the rights can revert. It’s not a lifetime copyright. There are loads of scenarios where self-publishing is not the better scenario. Look at the lists of thousands of authors who are traditionally published to do this day. They can do the math and decide which is more lucrative for them, as can their agent.

      • Steven Zacharius

        I think when you see a household bestselling name that people recognize you can claim that authors are going the indie route. None of those names were household names. Household names are those in the thriller, mystery and romance genres that dominate the NYT bestseller lists each week. You know who they are, we all do. When you see Lee Child, Lisa Gardner, Debbie Macomber, Dan Brown, Michael Connelley, etc….moving to indie publishing…..that we can have this discussion, but until then…..the biggest authors have not considered indie publishing. The others that you mentioned are very successful authors that have gone indie and have become even more successful as indies. They deserve a lot of credit and are obviously very happy with their decision and very vocal about it.

    • Steven Zacharius

      Many of these headlines are very misleading when you see that an author turns down six figure deal. It’s not until you read further on that the deal was based on many books making the deal seem much bigger than it actually was. The fact of the matter is that there really haven’t been any big bestselling authors that have turned to self-publishing yet. Look thru the NYT bestseller list and all the names everyone is familiar with are still published traditionally. It might change one day, but it certainly hasn’t happened yet. Authors like the advances that publishing houses offer them and they also like the services that are provided including the print distribution.

    • Steven Zacharius

      I just looked at the list on kboards of the most successful indie authors….this is the cream of the crop in terms of sales. While many of them have sold a million or more books; many of them have also published 20-50 books….which when you do the math, isn’t that many copies per title; especially at a lower price point. Now I agree that if they’re getting 70% revenue because the price is high enough for that with KDP it’s a lot of money, but it’s not the same type of revenue as with the big megastars in traditional publishing. The megastars in traditional publishing are writing one or two books per year.

      • Elliot1234

        Of course it isn’t the same level of revenue as a megastar. Nor is it the same production schedule. It’s a different system.

        It also doesn’t allow for the same lifestyle as the megastars. But it does offer them the opportunity to make a very comfortable living as authors.

        For many it allows them to escalate their lifestyle above what it had been before they hit the Amazon upload button. For some it pays the mortgage. Others use it to pay for kids college. Many independent authors have full time jobs and are delighted with the additional income.

        They don’t much care about the number of sales per copy because they approach it as a process, where they produce at their chosen rate and aim for an aggregate income from all the books.

        In 2012, the cut off betwen the third and fourth income quintile in the US was $76,538. So lots of those folks are making more than 60% of Americans. And they are doing it by hitting the Kindle upload button. They don’t judge their income by megastars. They judge it relative to normal folks working in the US economy.

        As you mentioned earlier, it’s a choice. Authors make it. Best of luck to them all.

      • Amen to that conclusion.

      • Steven Zacharius

        I’ll agree with that. The production schedule is different because publishers have to work on a longer lead time for printed books. That’s the way the process works. We print solicitation covers and sell them to the wholesalers and retailers six months prior to publication. This allows us time to get orders for the books so that we’re not printing blindly and ending up with huge inventories. With our digital lines, the production schedule is much more like indie publishing. We don’t have the same constraints and we can publish an author more frequently as well.

      • Robgb

        You are obsessed with megastar authors. They are few and far between and your shot at becoming one is slim—but, hey, if you want that shot, then relinquish control over your work and take that shot.

        But most of us are interested in making a good living writing books and connecting with readers. That’s all we really care about.

      • Steven Zacharius

        Most writers I meet are doing this to make a living as well as wanting to write a good story. Yes the megastars are exceptions just like the megastars in indie publishing or in any field of your choice. I don’t consider working with a talented group of publishing professionals is the same thing as relinquishing control.

      • I am not obsessed with megastar authors. Or, at least, I’m not considering only their position. Literally thousands of authors get advances larger than they earn every single year. And all of those have royalty rates that can’t be calculated by guessing what their Amazon rank means in sales.

      • Steven Zacharius

        The megastars is where the publishers make their money. Publishers can publish 30 books per month might only make money on a fraction of those titles based on the levels of advance and the number of copies distributed. A few big hits covers up a lot of sins.

      • Robgb

        I’ve been told this many times before, but I’ve also been told that publishers still make money on midlisters, even those who don’t earn out, and that publishing is unsustainable without them. I would imagine that’s true, otherwise why publish midlisters at all? It seems to me that relying on megastars to keep you afloat is a pretty shaky business plan.

      • Steven Zacharius

        There’s midlist and there’s low list. You never here anybody talk about low list. If you have mega and middle, you have to have a low as well. Digital sales have helped with the low list if you drop the price enough. But if you’re only printing 10000 copies in mass market or a few thousand in trade, you can’t make money on them even if there is zero advance. But you hope the author catches on and builds.
        Look at how many movies lose money and then the studios make it back on the blockbuster. It’s all part of the business.

      • Robgb

        I think a comparison to Hollywood is an apt enough description. Publishing has been headed in the direction of the tent pole high concept model for some time now (and I even got caught up in it at one point). That’s kind of a shame, but I can see how it’s probably the only way to make money with such high overhead anymore. Same for the music industry. I figure soon the midlist will be squeezed out and the industry will downsize while maintaining the megastar model. And I don’t see anything wrong with that.

        Contrary to what others seem to think, we indies don’t hate publishers. There’s room for all of us.

      • Steven Zacharius

        Couldn’t agree with you more. I’m sure we will see more and more cases where we publish one series in e and p, and the author does another on their own. The key is in working together and cross promoting both.

      • Robgb

        A meeting of the minds. I like it.

  • Lay it to rest. Do your own thing.

  • EricWelch

    My bias up front. I’m a reader, not an author or a publisher. I have an interest in having a strong, competitive (read reasonably priced) market for the books I like to read, biography, history, mystery, nautical fiction and nonfiction, although I have been known to often wander off-genre. I’m a moderately prolific reader, averaging about 115 books a year. A rather surprising element of this debate is that the reader, upon whom ALL success of both sides rests is often ignored but for occasional lip service. Both Hachette and Amazon are interested in improving their bottom line. Both have an interest in reducing costs, including author royalties. The idea that preserving literature enters into that equation at all is ludicrous or Shades of Grey and James Patterson would never have been published. There’s plenty of junk (and good stuff) in both independent and mediated worlds.

    It would seem to me that you, Mr. Shatzkin, and Howey, both interesting people are talking past each other. Howey has had success in a new world, one where book production is relatively easy (all the publishing services such as editing, design, and marketing as easily available to any author wishing to go the self-publishing route, those services hardly being exclusive to print publishers) whereas you, from what I’ve read in your posts, have a stake in keeping your clients happy and clients notoriously tend to ignore news they don’t like and blame the messenger. I know you’ve tried to steer them in certain directions, but those directions all start from where your father was 50 years ago.

    From my limited perspective , that of the consumer, a librarian and reader, it would seem the legacy print publishers are saddled with a horribly inefficient distribution system, solely predicated on print books, that currently serves neither them nor their authors well. Authors complain of slow and inaccurate payments and having little control over their product. Just look at the standard author contract (my wife is a legacy author) which, among other restrictions, gives the publisher derivative rights, i.e. the right to condense, change, republish, do whatever they want. I frankly don’t know how an author would ever stand for that. It’s no wonder self-publishing with its ultimate control looks attractive. Publishers have placed all their hopes on retention of that system and on hoping to get a couple of blockbusters each year; those blockbusters carrying their firms and subsidizing everyone else. (The New Yorker had an eye-opening article on accounting for advances about 15 years ago. It was astonishing.) A tiny minority of authors, mostly those leading the Authors Guild, have done very well under the old system, Of course they are reluctant to change. Why should they? (Just as an aside, a $15K advance is about what a McDonald’s worker would make in a year.)

    My suspicion is that we’ll see further consolidation in the legacy industry, but simultaneously the rise of smaller independent publishers who, it must be noted, would never have been able to succeed without Amazon which has leveled the playing field by carrying everybody. Physical bookstores have limited shelf space and the demand for high discounts from those bookstores penalize small publishers. (The myth of the nurturing independent bookstore is just that. Independent booksellers are merely chain wannabes, in my experience, both as a reader and book-buyer.)

    The ebook trend reminds me of the battle over inexpensive paperbacks decades ago. That change was considered just as pejorative as ebooks are often considered today. Some people like hardcovers, some trade paperbacks, others mass-market books. I like the portability and convenience of ebooks. There’s room for all of them, and the shouting down separate hallways won’t make any difference. Whether the trade likes it or not the marketplace, i.e. readers, not publishers, authors, or consultants, will determine the outcome. And as readers we care about content, not at all about who the publisher might be.

    • Steven Zacharius

      I would tend to agree with you that readers don’t care who the publisher is except in certain genres of publishing. Most readers don’t even know what publishers do. The discounts on the wholesale model are fairly similar between print and ebook in terms of the cost to publishers. The difference is that the cost of doing the physical book is much more expensive and definitely much less efficient. We used to publish a line of non-returnable romances at a very low price. Even at the low price which was under $2.00 at the time, about 10 years ago, it was still profitable. But the problem was what the retailer would do with the books that weren’t sold….they had no way to get rid of them other than to shred them which isn’t inexpensive either. This is why books continue to be returnable to the publisher for the life of the book and it continues to be a very inefficient business model. But if we had to distribute only what we thought we would sell, you wouldn’t see the stacks of books up front in the stores and the books wouldn’t be as noticeable. There’s a definite balancing act that’s always taking place.

  • pond

    These lines confused me:

    “[MS] I’m always happy to see smaller presses succeed, but they have a hard time competing against the Big Five, mainly because of Amazon. They are forced (by Amazon) to sell their ebooks on “wholesale” terms, which means giving much more of the retail price they set to the supply chain. This leaves them two choices. They can set a reasonable retail price (like an Agency price) and get nearly 30% less revenue than an Agency publisher. Or they can set an artificially high price and hope the retailer will discount from it. So even if they give the author a higher percentage of ebook sales, the net might not be higher.”

    I thought your position was that publishers saw retailers as their customers. I think this means that when publishers sell to their customers (retailers including Walmart, Amazon, BN and small bookstores), they set their price. Whether under agency or wholesale model, the publisher sets the price – the wholesale price, the price the publisher gets from its customer the retailer. Whatever price the retailer sets, then, makes no difference to the publisher, the publisher’s profits, or the author’s royalties. Am I misunderstanding something here?

    If I am right, then if a publisher sets a wholesale price to a hardcover of $15, Walmart or BN or Amazon or Jane’s Books on the corner, can price the book at $50, or $30, or $10, but this is immaterial to the publisher’s profits or how much the author gets. And then, if that retailer sells more copies of the book by discounting it and even making it a loss leader, the publisher makes more and the author makes more.

    Something just does not makes sense here to me. You must be right, since you have been in the business for decades. Could you address this matter of the wholesale price, and show me what I am missing? Thanks.

    • First of all, the summary you wrote was correct.

      Here’s what I was getting at. When publishers went to agency, they reduced the ostensible margin the bookstore had from 50% to 30%. I say “ostensible” because discounting was routine off the prices publishers set. So publishers set high prices *knowing *that retailers would discount them. In fact, they were gaming Amazon’s commitment to deliver high-profile books to Kindle at $9.99. Publishers “said” those books were $30, charged Amazon $15 and, as you said, were just “benefiting” by Amazon selling more.

      EXCEPT: that Amazon’s aggressive discounting hurt the sales of print (which was still $30) and challenged their competition; Nook had come into the field and B&N couldn’t afford to match the discounting. Agency allowed publishers to reduce the ostensible margin from 50% to 30%, but, at the same time, they had to REDUCE the price on which the discount was based because NOW there would be no discounting and the price had to be “real”. That’s why — in a very little-commented upon aspect of agency — publishers actually REDUCED their net revenue per book when they went to agency. The reduction in margin from 50% to 30% was exceeded by reduction in retail prices (from $28 or $30 to $9.99-$14.99.)

      Those publishers who are not allowed, because of Amazon’s market power, to sell Amazon at 30% agency margins and not allowed, because of Apple’s market power, to sell Apple at anything other than an agency arrangement, most publishers have to “straddle” the two models. They do this by setting two different retail prices as bases for the two discounts. And then they assume, and hope and pray, that Amazon will discount off the wholesale price because, if they don’t, their book is in the marketplace at an unreasonably high price.

      I hope that clears up the confusion. And I hope that those readers who didn’t know that publishers actually *lowered *their revenue per copy when they went to agency will rethink the conclusions they’d reached before they took that fact on board.

      • Steven Zacharius

        And it’s only the big 5 publishers that are on Agency. All of the rest of the publishing world are on wholesale terms with all of the ebook vendors other than Apple. By publishers setting the digital list price of hardcover books to such a low price point, we have destroyed the hardcover business. It’s a shame for people who like to read hardcovers or collect books. Fortunately there are still printed books and it hasn’t become a 100% digital world.

      • Steven Zacharius

        I should add that no one knows how long the agency model will even be around. We don’t know if this is the basis of the argument between Amazon and Hachette. Amazon does not like agency pricing. They want to be able to set the price to whatever they want. So the entire pricing structure with indie authors with the current 70/30 split might disappear very soon as well. Time will tell.

  • Paul Draker

    I’m curious about the relative profitability of the print side of the business versus the e-book side, for big trade publishers today. Across the board, we see official numbers like 30%-35% for the percentage of Big-5 gross sales dollars coming from e-books, while a recent Publisher’s Lunch feature recently showed profit margins averaging around 10%.

    There appears a big disconnect between those numbers.

    Assuming a publisher is starting from a break-even-or-profitable print business, then publishing e-book versions of the same titles represents a marginal incremental fixed cost per book formatted, and essentially zero manufacturing and distribution cost per e-book unit sold.

    Thus, once the costs of the print side of the business are covered, three quarters of that e-book 30% – 35% should be dropping straight to the publisher’s bottom-line profitability.

    So why are publisher profit margins only 10%?

    Are publishers spending a big chunk of their e-book profit windfall to subsidize a failing print distribution business that has passed the point where it is no longer profitable on its own?

    This seems very likely to be the case.

    While one can characterize the numbers differently in accounting terms, by shifting much of a publisher’s fixed cost from the print side to the e-book side, it definitely appears that print publishing–taken on its own–is no longer profitable for the Big-5.

    One alternative interpretation might be that the discrepancy is explained by unearned advances. But that interpretation doesn’t really hold up to logical scrutiny. Here’s why.

    Whether or not an advance earns out has little to do with how much $ profit the publisher makes on that book. The only thing an unearned advance on 25% royalty indicates is that the publisher’s profitable return rate on that book has not yet exceeded 400%!

    So if 30%–or even 10%–of e-book advances are actually earning out, then publishers should be posting huge profits.

    So… has print publishing passed the point of standalone profitability? Is that why trade publishers are no longer agreeing to print-only deals with successful indie authors?

    Curious to see what light you can shed on this.

    • Paul, really very simple…and previously explained. The publishers are paying MUCH higher than the royalties you suggest because of unearned advances. One person with knowledge of one very big house says their actual author royalties on ebooks doing that calculation is about 48%. I think that will help you account for the mismatched math.

      • Paul Draker

        Hi Mike,

        Thanks for sharing the 48% number. It’s interesting. I hadn’t heard that median author advances had gone up so much in the past few years, so perhaps the lion’s share of those higher effective royalties are highly concentrated in a few mega-selling authors.

        But even if effective e-book royalties to authors were 50% across the board, that still wouldn’t account for the discrepancy you say it does.

        The math says different.

        Fifty percent of 30-35% is still 15%-18%, which is what profit margin the Big-5 should be reporting in that case (a break-even print-book business and 50% effective e-book royalties averaging 50%)

        Thanks again for sharing your thoughts. No matter how it all shakes out, we’re now in a fascinating transitional period for the industry.

      • Steven Zacharius

        Most indie authors focus entirely on the ebook royalty only, with the standard still being 25% of net receipts. But there’s a lot more to be considered than just that royalty rate. When you’re self-publishing that royalty rate is all you have. It’s 100% of your income. When you’re traditionally published, you’re getting an advance and that has to factor into your earnings as Mike has pointed out. It changes what the effective royalty rate really is. With digital lines from many publishers that standard royalty rate isn’t 25% of net receipts. There are houses that are paying up to 50% of net receipts and still providing true publishing services to those authors.

      • Paul Draker

        An advance is basically a payday loan of an author’s own royalties, necessary because traditional publishers only pay twice a year, rather than monthly the way the retailers pay us indie authors directly. So, not much added value there… it doesn’t change the effective royalty rate whatsoever unless, as Mike says, the advance never earns out.

        But what does “never earning out” really mean in the digital age, when ebooks never go out of print? It’s holdover thinking from the print-only days. Nowadays, if a non-stratospheric advance doesn’t earn out, it’s most likely because the publisher stopped aggressively marketing a book after a few months, in favor of newer releases.

        We talked about this once before, but I see zero value in “digital only” traditional publishing agreements. Large-scale brick&mortar print distribution is the only thing a publisher offers that an indie author can’t hire and get done just as well or even better, while keeping ownership of all IP rights and earning 100% of net. But different strokes for different folks, I guess.

      • Nice try with the mischaracterizations, but they don’t fly.

        The “payday loan” actually enables many writers to do books they wouldn’t have been able to write otherwise. And earning out means a lot in the digital age, because although books don’t go out of print, they stop selling. And many authors have reversion clauses that let them reclaim their rights even if the book hasn’t earned out.

        And the whole self-publishing option only is commercially viable to a small minority of authors anyway. I’ll write another post on this but there are only two categories of successful self-published author: those who reclaimed their backlist and those who write in genres and write a LOT. You take those two types out and the number of successful self-publishers is vanishingly small. In commercial publishing, on the other hand, these two types are a small minority.

        I’m not saying self-publishing might not be the best route for YOU. But to generalize beyond the cohorts I just identified is entirely misleading.

      • Paul Draker

        Why so defensive a reaction, Mike? I was talking to Steve, not you.

        And I came here to ask about print economics, not to discuss self-publishing, because you obviously have no clue whatsoever what you’re talking about when it comes to modern indie publishing.

        I understand your blog’s focus is not writers, but you really ought to educate yourself a little before making sweeping, grandiose, and factually incorrect observations about an industry that has left you behind.

        Pretending there are “only two types of successful self-publishers” is just self-serving silliness, and your outdated claim that the number of successful self-publishers is “vanishingly small” is illogical nonsense that doesn’t bear any resemblance to the highly visible reality of publishing success today. There are a few thousand of us indies who first started writing in the ebook era and never bothered with all this quaint, old-fashioned querying stuff, yet are already earning a full time living from writing. And when big publishers approach us with unsolicited offers after seeing us outselling them in the top retailer charts time and time again, we turn them down as often as not.

        It’s 2014, Mike. 🙂

        What year is it on your planet?

      • Paul, this isn’t silliness, it is fact.

        There are two, and ONLY two, “categories” of successful self-publishing authors. They either had a backlist they got the rights back to, or they write in genres and write prolifically. I won’t say you won’t find a SINGLE example of another kind (one person in our office read a literary novel that was self-published and did well), but you sure won’t find many.

        The scope of the disruption is extremely limited. And the claims of the self-publishing echo chamber about how much they disrupt the conventional publishing industry are laughably inflated.

      • Paul Draker

        Wow. Not sure who you are so desperately trying to convince of what. Or even why.

        I asked a question about print-only economics which Steven Zacharius was courteous enough to answer thoughtfully, reasonably and without rancor.

        Why would I even care how much traditional publishing is being “disrupted” or not? It’s irrelevant to me. And nonresponsive to my question.

        What “echo chamber” are you talking about? You’re trying to rebut things that no one actually said, and basically arguing with yourself now. It’s bizarre.

        You’re also welcome to blog all you want about your imaginary “two categories” of self-publishers; it’s your dime. And perhaps what you’re blindly hypothesizing about may even have been the case, three or four years ago. But your hand-wavey theories about successful indies sure don’t bear any resemblance to the verifiable reality today.

        Come on out of the cave and learn about the publishing world of 2014, Mike. You’re not a dumb guy — some of the posts you wrote a couple years ago were well-reasoned and articulate. But lately, you haven’t been making a whole lot of sense.

      • You obviously don’t know much about me. I’ll stack the variety of my inputs about publishing against anybody’s.

        And you don’t like my characterization of who makes the money in self-publishing, but I didn’t notice any list of examples in rebuttal. There aren’t any.

        Steve Zacharias is a very patient man. I’m happy to have him respond to ignorance in his patient way. I am personally really tired of the meme that indie authors are going to topple publishing. It’s ridiculous. You’re not the first person to say that to me recently, or even in this particular comment set. Being less patient than Steve, I guess, you were the one who got the response that many before you could have gotten (although, I admit, that I realized the “two categories” rule applied as a result of an offline conversation I had with a self-published author who is really well versed in which of the tribe are making money.)

      • Paul Draker

        Guess you’re mixing up commenters now or otherwise confused. Where did I say anything about “indies toppling publishers” in this conversation about print-only publishing and advances? Again you’re trying to argue with me about something I didn’t say. Go reread the thread.

        As far as counterexamples to your hypothetical “two and only two categories” of indie authors earning a living, you’re talking to one. But don’t ask me to do your homework for you.There’s plenty of solid data available now about author earnings, and most authors I know are using that information to make informed business decisions about our careers. Whether *you* personally choose to ignore the data and instead rely on what “one guy who was close to one big publishing house once told me” is up to you, and frankly immaterial to me. If it works for you, great. More power to you.

        But thanks for an interesting, albeit slightly bizarre, conversation.

      • If you’re talking about the Howey data, it’s not taken seriously outside of the indie author world.

      • Steven Zacharius

        I would also agree that most of the successful indie authors are writing a tremendous amount of books, primarily in the romance genre or thriller genre. A traditional publisher normally wouldn’t be able to publish three or four titles a year by a single author. Publishers don’t see indie authors outselling traditional authors very often. We see higher unit sales sometimes, but not higher revenue very often.

      • Paul Draker

        Hi Steve,

        Terminology disconnect. When you say “outselling” you mean “dollars paid to publisher” but that’s unimportant to an author. When an author says “outselling” we mean “number of books sold” and “dollars actually paid to author.”

      • Steven Zacharius

        When I say outselling, I’m talking about total billing dollars. That’s what’s important to publishers and retailers. I understand that receipts are more important to authors. I’m basing my generalizations on all the blogs that I read from indie authors and those that we happen to acquire, which are quite a few.

      • Paul Draker

        What data are you basing your generalizations on? Last I heard, indies wern’t reporting sales numbers and earnings to Kensington.

      • Paul, I deal with self pubs and hybrids all the time as a small press publisher, and the successful self pubs who aren’t hybrids are rare.

      • Robgb

        Well, let’s be completely honest here. I think you’re absolutely right that self-publishing is only commercially viable to a few. But I think the same is true for traditionally published authors as well.

        Most books fail. Period. We all know that. Even, in many cases, when a publisher throws a lot of money at the book (which is rare).

        Most traditionally published authors need day jobs to survive, because the meager advances they get (averaging about 5K to 10K these days) are spread out over a couple of years. So maybe they can pay half their mortgage, if they’re lucky. Plus they don’t get another cent unless the books earn out.

        So the bottom line here is that of the thousands of people who write books—no matter what path they choose—only a few of them can do it for a living. And that’s a shame. But it’s fairly ridiculous to argue over which avenue is more commercially viable.

        What authors should be concentrating on when they decide whether to self or traditionally publish is CONTROL. The control of their material. You have to ask yourself, how much control am I willing to release for a chance of beating the odds? And if I relinquish that control, will I ever get it back?

        No path offers guarantees of success, but only one path guarantees control.

      • “Control” comes with both responsibilities and costs. And if you don’t know what you’re doing, “control” can be fatal. The person who doesn’t know how to drive may have the illusion of more “control” if they take the wheel, but it might be a dangerous thing to do.

      • Robgb

        So what are you suggesting? That authors shouldn’t be allowed to have control over their own work? That they shouldn’t be willing to invest in their own business and let someone else run it for them? I think that’s fine for some, but not for all. And if you value control—and the responsibilities that come with it—you will not maintain it if you go traditional.

        Authors aren’t children. We are capable of taking care of ourselves, thank you. And now that we have the means to reach readers directly at absurdly low overhead, there’s no reason we shouldn’t.

        I was traditionally published for many years and value the people I worked with and the time I spent there. But I CHOSE to go indie because I wanted control over my work. I didn’t want to be begging them to listen to my ideas for marketing or cover art or to get my rights back from an entity that has decided my book is still in print because the digital copies are available.

        Yes, control CAN be fatal. But so can loss of control. And most authors I know would rather be the driver than the passenger—especially since we’re the ones building the cars.

      • “Control” is available to those who want it. It is useful to those who know what to do with it. I’m not advocating one thing or another, except that an author who turns down an advance from a publishing house is taking on risk and work and ought to be well aware of that before they do it.

        The silly shit about implying I think authors are “children” is just that: silly shit.

      • Robgb

        Oh, you’re clearly advocating. Anyone paying attention can see that.

        Authors take risks all the time. They risk that in exchange for 10K or whatever, that their publishing house won’t screw up the editing or the cover design or fail to promote the book. They risk that their editors and PR rep won’t listen to their suggestions about how to handle the book. They risk that the publisher will abandon the book or that their editor decides to move on and their book is orphaned. There are a lot of risks involved in publishing and the author takes most of them. Whether they think that’s worth $10K spread out over a couple years is entirely up to them.

        If the advance is closer to $500K, then obviously that’s life changing money for some people and a different story. But even then the author has to ask him or herself, what am I giving away in exchange for this money? If you lose the rights to your property forever—which is what it often amounts to (ask Harlequin authors)—then that $500K seems far less attractive.

        But we all know that $500K advances are rare. Publishing houses are offering lower and lower advances and that $10K (or even lower) is now pretty much the norm.

        Savvy authors, those who have educated themselves, are realizing that control and a small investment in your business are much more important than a meager advance. Thanks to technology, we can actually make a good or even great living going indie. And it doesn’t take a whole lot of effort to educate yourself.

      • Rob, I think the more challenging questions are in between $10k and $500k. And I think it would be much more helpful if successful self-published authors really examined the reasons for their success and tried to discern what really made it happen than to just say “hey, who needs publishers? You make so much better margin doing this yourself!” which is what I’m hearing. C’mon, just once: say “it isn’t easy”.

      • Robgb

        It would be a wonderful thing if any author, or publishing company, could examine and understand the reasons for their success. But the answers are varied and don’t apply for every author or every book or every publishing company. If they did, we’d merely have to follow a certain set of rules and all be instant bestsellers. Success in publishing is a black art that nobody really understands. Not you. Not me. Not the CEO of any publishing house.

        There are certainly things you can do that will aim you TOWARD potential success—first and foremost being write a great, commercial book—but as I said before, there are no guarantees no matter what path you take.

        But the truth is, self-publishing IS easy. The act of getting your book edited, formatted, the cover designed and uploading it to KDP or Nook or iBooks or CreateSpace for print is a fairly simple, straight-forward, fixed cost process that ANYONE with half a brain can learn. And most of it can be learned in a few hours or, on the outside, a few days.

        The hard part, the real work, is where it has always been. Writing the book. Coming up with an idea and characters and crafting a story that’s cohesive and entertaining. That isn’t and never will be easy. Not for the traditionally published author and not for the indie author. And if authors didn’t sit down and do this day after day, there would be no publishing industry at all.

        This is something I think people in this business too often forget. The job you have is only possible because an author—many authors—sat down and created something out of nothing. And a $10K advance (or $20K or $30K) and a small percentage of net sales does not, in my estimation, reflect an industry that really thinks about that hard work or even cares that an author spends considerable amount of time and effort doing it. The publisher of today is merely selling widgets.

        So, no, you’re right. It isn’t easy. Creating a book is hard, hard work. But publishing one in the days of new technology, while certainly time-consuming, ain’t rocket science.

      • So far I look in vain for a CLUE about how you do the marketing. No, publishing is NOT as easy as uploading a book. And success isn’t as easy as just writing a good one. Either you don’t want to share your secrets or you are blissfully unaware of how lucky you are. Either way, not much for anybody to gain from the cheerleading without information.

      • Steven Zacharius

        This is so far off base. An advance doesn’t necessarily have that much correlation to the royalties earned. As you said there are advances that don’t earn out; and sometimes in a very big way. It has nothing to do with a publisher stopping marketing a book in a few months.

      • Paul Draker

        So if it has nothing to do with marketing, then why do traditionally-published ebooks “stop selling” as Mike claims, and “never earn out”? It’s an honest question. Readers don’t check publication date when choosing books. If it’s new to them, it’s a brand new book as far as they are concerned. Properly marketed, an ebook will sell forever. It’s just common sense.

      • Steven Zacharius

        I don’t think that’s true about consumers not checking pub dates when they purchase a book. Most people I know go to new releases when they look online. It’s even one of the primary sorts on all online retailers. I read plenty of old books too. Books in general stop selling because there are so many new titles being released all the time. There are only so many leisure hours in the day and readers tend to gravitate towards the newest and biggest books….thus creating the bestseller lists. Also publishers don’t generally drop the prices on older ebooks like indie authors do. We are starting to do that now ourselves but it also can come back to haunt you. If you make too much content available at a low price, why do readers want to buy a newer more expensive book from that same author if they haven’t read the less expensive one yet?

      • This idea that brick and mortar print distribution is the only value a publisher offers is one of the key tropes I hear from indie authors, and it’s not true. The moment a big publisher puts a book in its catalog and its marketing machine puts that book in front of traditional booksellers, the author has scored a level of publicity that can’t be quantified. There’s a boost that comes from it regardless of anything else the publisher does or doesn’t do. The intrinsic marketing value of being recognized by the booksellers and their network is something the average indie author can’t replicate. Bonus: most indies have no clue how to sell foreign rights and are better off turning them over to a publisher with a decent sub-rights department.

      • Robgb

        When they’re first starting out, most indies don’t have a clue about much of anything. Which is why they’re educating themselves, exchanging ideas, etc. Amazon has a translation program for foreign editions and is offering terms better than most agents can secure. They are in the beginning stages of this program, but it’s likely to expand over the next several years.

        Putting a book in a catalogue and sending out ARCs is, in many authors’ experience, just about all the marketing a publishing house does for a midlist book. Those catalogues reach booksellers, yes—and that’s terrific—but being exposed to that network is becoming less and less important as time wears on. Print sales are dying. And one day, like CDs, they will be an afterthought.

      • I don’t disagree about print sales “one day”. But that day isn’t here yet. And it isn’t coming in 2015 either. Right now, self-publishing (if you have the choice of a real publishing deal) involves giving up most print and all bookstore sales. Yes, you get higher royalties on the sales you make and perhaps lower prices. But you cut yourself off from significant channels and you take more risk and more work. Let’s remember that Amanda Hocking bailed out on self-publishing precisely because the work wasn’t work she wanted to do! (and because she got a lot of money from Macmillan.)

      • Robgb

        Look, any indie author who is offered a couple million dollars from a publishing house would be an idiot to turn it down. That kind of money is a no-brainer.

        But Amanda Hocking is a rarity. Publishing houses don’t often (if ever anymore) make such offers. And with all due respect to her, the extra work involved in self-publishing is not that challenging. She chose to take a couple million instead and let someone else do the paperwork. I can’t say I blame her.

        You say that the death of print isn’t coming in 2015, and I agree. But indie authors who start learning the ropes now will be better prepared for when that day that does come. And, honestly, most of us don’t NEED print. We do it because some of our readers want it, but the majority of our money is made in digital and many of us make a very good living.

        Few of us think about print anymore because we don’t have to. We’ve already moved on.

      • Elliot1234

        One person with knowledge of one very big house says their actual author royalties on ebooks doing that calculation is about 48%.

        Is that (total royalty payments for all books) divided by (total of list price for all books sold)?

        Or is is the average for all books?

        If it is computed some other way, how is it computed?

      • Total REVENUES for eBooks divided by their share of advance paid which is largely unearned.

      • Elliot1234

        I think numerator and demoninator are reversed.

      • Whether they are or not isn’t really important. You can divine the truth either way, if you’re consistent. And you can’t divine the truth without both, no matter how you place them.

    • Steven Zacharius

      I think the fact that you saw that publishers are making under 10% profits shows what the true costs are in running a business. You can’t look at a single title. The infrastructure is immense even for smaller publishers. The art, editorial, marketing, publicity, operations, warehousing, contracts, sub-rights, editorial, etc….all have enormous costs associated with them. I would tend to agree that print publishing by itself will not show allow a publisher to show a profit on a given title. This is because print sales have declined dramatically while digital sales have increased. The reasoning is that ebooks were less expensive and convenient. It now takes both pieces of the pie to make the book profitable and this is why there aren’t that many hybrid deals being made. The publisher can’t give a large advance and keep the rights to only the expensive part of the publishing process. We need both parts together to make a profit and as you mentioned….10% is not a large profit.

    • Elliot1234

      The figures we see for individual book profitability are closer to cost accounting than financial accounting. But the ten percent margins are financial accounting. That divides the firm’s total profits by all sales.

      The figures we see for books are not strictly cost accounting, but they appear not to include all costs incurred by a publishing firm. Each sytem is valuable depending on the purpose.

  • NoTalentHack

    Thursday’s NYTimes contains this Interesting and timely counterpoint to Hugh Howey’s experience:

    http://www.nytimes.com/2014/06/20/opinion/i-was-a-digital-best-seller.html?hp&rref=opinion&_r=0

    Mike, congratulations/condolences on generating so many comments 🙂

    • Thanks. When I posted this I knew it would bring on the attacks. They’re tiresome but they are apparently the price I pay for saying what I think. Sometimes I think deleting some of the more dumb and insulting comments would be a better strategy than answering them but I tend not to go to that extreme until an individual person has made it clear that they’re more interested in shooting me down than in making any effort to understand what I’m writing.

      • Steven Zacharius

        I think the key point here is that there are still a handful or self published authors that have really broken out big time, very few. There are several hundred that are making a nice living at writing as self-published authors. But there are tens of thousands that don’t make a dime either. And it’s going to get harder and harder; not the opposite, to be discovered. Online is very crowded. Publishing houses have the ability to get prime online retail space to promote authors and even lower priced books. This is the advantage to traditional publishers. Self-publishing is great and if authors choose to go that route and can make a living at it; more power to them. There’s no need to argue that one is better than the other. Every writer can make their choice as to which path they want to try and go. I know it can be frustrating for authors to be rejected by publishers. Publishers can only turn out so many books with their current staff. This is why there’s been many digital publishing houses that have developed. They can use freelance editors and artists and get books published that traditional publishers aren’t able to. There’s plenty of room for indie authors and traditional authors. The bashing by either side really isn’t necessary or even constructive.

      • Elliot1234

        There are tens of thousands of authors who submit their books into the traditional publishing system and don’t make a dime. And its getting harder and harder; not the opposite to be discovered in the traditional publishing system.

        Traditional publishing is great and if authors choose to go that route and can make a living at it; more power to them.

        I agree there is no need to bash each other. So do you still want independent books segregated from publishing house books?

      • Steven Zacharius

        Good memory. I think in many area like in bookbub promotions it would be helpful to know if the book was from a publisher or indie author. Like it or not, agents and publishers are still a filter. That’s not to say every book is great, but it might sway a buyer who’s deciding to spend the same amount on an unknown author or one from a publisher. Either could end up being a good book though.

      • Elliot1234

        How about a filter that segregated big five books from smaller publishers? That could be helpful to know and might sway a buyer. Like it or not, buyers have their own filters. And I acknowledge a good book can come from a Big-5, a smaller publisher, or an independent.

      • More prominent and clearer Big Five branding could help provide that filter. There’s a post in my archive spelling that out. A year or two or three old.

      • Elliot1234

        Sure it could. Then consumers could avoid both independents and lower ranking publishers.

      • Steven Zacharius

        The likelihood is that most people just search either by author or look at the bestseller lists or the bestseller lists in the category that they like to read. Nobody searches for a publisher other than possibly Harlequin or maybe one or two others.

      • Steven Zacharius

        I think you’re be a little sarcastic with your reply. My blog did say “in my ideal world”….it didn’t say it should be that way. Readers will make their own decisions based on whatever criteria they choose whether it’s a cheap price, good reviews, liking the subject, recommendations from bloggers or Goodreads, etc….

      • Elliot1234

        No sarcasm at all. If segregation is intended to provide information that can sway a consumer, then it’s also reasonable that some consumers may want to stick with the Big-5 and avoid the rest.

      • Steven Zacharius

        By the way you can always search by publisher online if you like.

      • Elliot1234

        Sure. I suppose consumers could employ the same technique to identify independent authors. Should work for both purposes. Too bad we don’t live in an ideal world — yours or mine..

      • Steven Zacharius

        I don’t know how you would search by indie authors. I use advanced search all the time for various searches. I don’t know how common this is.

      • Elliot1234

        In that case, we can kill two birds with one stone by just searching for the Big-5. That eliminates the independent authors and the lesser publishers in one whack. Mike might have a good idea there.

      • You know, one of the first things you learn in Publishing 101 is that very few customers know much about publishers. Publishing companies are B2B brands; always have been. AUTHORS are the B2C brand. That’s sorta what’s behind the whole indie author “cause”. They don’t NEED the brand that bets you reviewed by the NY Times, gets you bought by the bookstore buyers and noticed by the librarians, gets proper aiting and presentation to the big chain buyers. They feel they just need the brand with consumers and Amazon (mostly) will provide the rest. There is KNOWLEDGE of “how people search” for books, and, believe me, “by publisher” is way down on the list. Of COURSE there are exceptions. But they ARE exceptions.

      • Elliot1234

        I agree. It looks like consumers have figured out how to use the search tools pretty well to get what they want. They really don’t need help from any of our ideal worlds. They might not be doing what you or I want, but they don’t much care about us or what we want.

      • What I’ve learned from my Logical Marketing partner, Pete McCarthy (there’s another post if you put Peter McCarthy in the search box…) is this technique:

        You figure out what you think your audiences are. Then you find out how those people search for that you think will make your book an attractive discovery. Then you write copy and otherwise optimize your book’s presence to show up when those terms are searched. So it STARTS with the audience if you’re doing it right.

        And, in fact, big publishers — however unevenly — are moving to understand that and act on it. When they “get it”, they will be able to apply size and scale on the Internet too.

      • Steven Zacharius

        Mike didn’t say anything like that. One of the searches is publisher. You can also do pub date, format, category, etc.

      • Elliot1234

        More prominent and clearer Big Five branding could help provide that filter. There’s a post in my archive spelling that out. A year or two or three old.
        Mike Shatzkin, this thread

      • There is a gross filter: branded publisher or *not*, that could sometimes be used by some people. It’s the opposite of your notion that people will search indie. Or the idea that you can “filter out” Big Five. You CAN establish a brand with enough repetition. That’s the point to the post I wrote about that subject. But it would only be useful in the crudest sense: establishing it as “pro”, probably helping to justify a higher price. The problem is that in the B2B world, the imprints have meaning and they also have power in the Big Five houses. There isn’t a single owner there like Steve who can just say “we’ll do what makes the most sense”, there are constituencies and interests. And the imprints in the big houses wouldn’t like the over-arching brand establishment idea I posited. In their defense, I agree that most civilians don’t pick their books by publisher, so the B2B branding may have diminished value, but it still might have value in ways an overarching brand would not.

        It’s complicated.

      • Elliot1234

        Agree. The number and types of players make it very complicated. So when we talk of filtering books in or out of a search, we should remember that it is a many edged sword.

        If Amazon provided the means to segregate independents, it could also provide the means to segregate the lesser publishers.

        In my ideal world, my name would be included in the list of Amazon major categories. That would segregate out everything but my work for consumers who would be swayed by that information. We all have an ideal world where we tilt the field in our favor.

    • Daniel Knight

      How is this is a counterpoint to Howey’s experience? The author of the article went through a publisher. Digital does not equal self-publishing.

      If anything this guy should consider himself pretty lucky. He was given a $20,000 stipend to go traveling.

      • He *was *lucky in the end, as it turned out. But he learned a lesson or two about dealing with new propositions and upstarts. Hugh’s advice is to run for the hills if the Big Five approach you. That’s the relevance some people see.

  • I have published six books with mid-sized publishers and only one advance was over $10k. That was ten years ago. The last deal offered me was not even an advance, it was a one time payment per title (Dummies books) that would have paid me about $1/hour. If you think most authors are making six figure advances (which are almost never what they seem given multiple book deals and payouts that don’t take place until a book is published, often years after completion) than you are sadly out of touch. I enjoy reading your opinions but they are opinions and it seems your perspective is shaped by the distant past, not the messy present. Bookstores are toast. That’s something the business refuses to grasp. They are done. The only reason my 1+million metro area has any bookstores is because B&N still serves colleges. But when I walk in those stores there are no customers. Look around a busy Starbucks and tell me how many print books you see.

    • Actually, Martin, YOUR perspective is shaped by the fact that you apparently write functional non-fiction, which is far more disrupted by digital change — and *not *ebooks — than narratives like fiction and biography. I suspect it would be hard to make self-published books work as well in what you write. Certainly, a Dummies book without the brand is not a formula for a self-publishing bestseller.

      The book business is many businesses. No matter what I am (or anybody else is) talking about there are swaths of the business that don’t fit the description. That was part of the point of identifying that self-publishing success comes to those with backlists or who write genre fiction quickly. Within those groups, there are new success stories regularly. Outside of them, there have been very few ever.

    • Steven Zacharius

      I would suggest that you look around a beach resort and see how many printed books you see. There are still many many people who prefer holding a book in their hand rather than an ereader.

  • I’ve just been reading these comments and I’m done with this blog. I make my living as a writer and have for a long time. This defensive “I am the expert and you’re not’ tone is petty and unprofessional.

    • Congratulations and best wishes for your continued success. If you are “making a living” as a non-fiction writer self-publishing ebooks, then you have a story to tell lots of people would be interested in. If not, I’m not quite sure why you’re distressed by what you read, but you shouldn’t waste your time if you get no value.