It should be clear to anyone following traditional publishing now that no traditional publisher will fail in 2012 when ebook sales hit the magic 25%. In fact, because of a number of factors, even with paper book sales declining, most traditional publishers are making more money every quarter. Not all, and there will be some major publishing failures coming up over the next five years. But most traditional publishers will just fly through this with profits.
The reason, of course, is that they are raking in high margins for every electronic book sold. And that, of course, is thanks to authors and their agents caving in and changing electronic royalties from the old 50% of cover to 25% of net.
So traditional publishing is not failing and indie publishing is here to stay for a number of decades at least. So authors now have a choice for each project.
But how does an author make a choice for any book or story? That’s the tough question.
With short fiction, I think the traditional magazines can play a huge roll for an indie writer. I talked about that in the article you can read called When to Mail Short Fiction to Traditional Publishers. So for each story, there is a real choice to make.
But novels are another matter.
When I looked at the choice for novels with hard numbers and facts, the weight always shifts to indie publishing. At least it shifts until you can get advances upwards of mid-six figures. Then a balance comes back to the table. But beneath that high level of advance, indie publishing wins every category.
That fact is going to make the new world of publishing very, very interesting for smart writers.
Another way of putting it is this: We are watching the midlist slowly shift to indie publishing.
It’s just starting, but it is happening.
Traditional vs Indie
So, over the last month I’ve been trying to write an article on balance between traditional and indie publishing.
The balance with short fiction is clear. Do both.
But with novels I can not find a balance.
See if you agree.
How about some hard numbers first?
(From here on, unless stated, I am talking about novels.)
The Numbers Only…
Electronic… after agent fees the author gets about 14-15% of the gross book price. (25% of 65-70% minus 15% of the balance.) In reality, for various reasons, royalty statements I have seen usually have the number closer to 10%. But for this I’ll stay with the 14% number.
Paper… author gets about 6-12% of cover price minus 15% for the agent. And depending on discount clauses which lower the amount an author gets by a great deal. (Discount clauses means that if a book sells at high discount to WalMart, you get less percentage or no percentage. Standard contract terms.)
Electronic…. No agent. Author gets an average of 65% across all sites of suggested retail price if the novel is priced correctly.
Paper…. No agent. Author gets anywhere from 10% to 40% and up depending on sales channel and correct pricing structure.
So only looking at sheer numbers of profit per sale, indie publishing wins easily.
How About Sales Only?
For those of you who think that an advance from traditional publishing guarantees book sales, you are living in a myth I’m afraid. I got paid $15,000 for one book and it sold, at last royalty statement, 623 copies. And is now out of print, of course. On the flip side, I got paid a $25,000 advance on a novel and it has sold 1.32 million copies at last count. (Yeah, I’ve made some extra money on that one.)
But because a novel has sold to traditional publishing does not guarantee sales. That’s a myth. Period.
However, let’s look at some projected guesses that the traditional publisher’s sales departments make. They will tell you their guesses by the advance range they offer you for the book. Trust me, unless you get lucky like I did with one book out of over a hundred, you will not sell more than your advance indicates.
Very very round numbers: An advance of $10,000 means the publisher is planning on selling about 15,000 copies of your $7.99 mass market paperback and about 5,000 copies of your $6.99 electronic book. 20,000 copies approximately. (This number will vary widely depending on a hundred factors including genre, but go with me at the moment. You are getting 6% of cover in this calculation and 25% of net for electronic.)
I’m going to figure this over a ten-year period from the time you sold the book, not counting the time it took the book to sell.
If you signed a good contract, the book will come back to you at about that point. If you didn’t get good help on your contract, the publisher will keep your book for 35 years until you file to get it back under the 35-year reversion rule in copyright law. But for this exercise, let’s say 10 years. (A guy can dream can’t he?)
Summary. In ten years with traditional publishing, with a $10,000 advance, you will sell about 20,000 copies total (mostly in the first year or so after publication). That is again assuming your book is good and sells to expectations.
Same book. Assume a good cover, good blurbs, and a $6.99 cover price for electronic and $17.99 trade cover price. To sell 20,000 copies over ten years, you are going to have to sell 2,000 copies per year total across both states. Around the world. About 170 books per month.
(Honestly, for most indie publishers right now focused on Kindle Select and giving their book away for 99 cents, this number would be far, far too high. But for the smart indie publishers who price their books correctly and let things grow and just keep writing, 170 sales per month average over ten years is pretty small. Not at first, of course, when the writer only has a few titles, but over time as the writer keeps writing and putting out more, the early book will just keep selling.)
Also remember, your book will be in print for ten years under the indie side. If you sell it traditional, it will be out of print except for the electronic readers, after a year or so. So your book might catch fire and start selling like crazy in year six for the indie side, while for traditional, most books will be basically out of print and lost at year six.
How About The Money?
In the above example, in traditional publishing you will make the $10,000 minus agent costs. ($8,500 paid out in three chunks over two years or so.)
Taking that same example above, the indie publisher will make about an average of $720 per month. (170 copies x $6.99 cover x 65%.) Over the ten years the indie writer, selling the same 20,000 copies will make $86,000.
So, if you sell 20,000 copies traditional, you make $8,500. If you sell 20,000 copies indie over the same ten years, you make $86,000.00
Ten times the amount!!!
In fact, by selling only 2,000 copies over ten years, (or about 17 copies across all sites and in paper per month), you will make about $75 per month or $9,000, which is more than you would have made traditionally.
Now Let’s Talk Ownership and Responsibility
With traditional publishing, you must sign a contract licensing rights to your work to a publisher. If you have been following the blog thepassivevoice.com and my wife’s blog, www.kristinekathrynrusch.com, then you know that contracts from publishers have gone purely evil.
And that’s to be expected. In the last two years, everything has been up in the air in publishing, so publishers, afraid of everything, made a grab for every right to every book they could get. And they made reversion clauses impossible to get out of and deal-breakers. Even some agents made rights grabs for author’s work in either offering to publish their books or in their agency clauses.
In other words, you sell a book now to a traditional publisher at a lower midlist level (under $100,000.00 advance) and you will have no chance of ever seeing the rights to your book back again for thirty-five years. And the publisher can decide to publish your work dead, or in a bad format, or with a bad cover, or with no proofing, and there is NOTHING you can do about it. Even lawsuits won’t get you out of a legal contract you signed.
My advice to writers over the last year or so has been to not sign any new traditional publishing contracts until all this dust settles. And honestly, from the contracts I am seeing, the dust is getting thicker and the rights grabs are getting worse, not better.
And if you think your agent can help you, or even negotiate one of these new forms of contracts, you are just flat dreaming. Even if you have an agent, hire an IP lawyer to help with the contract, and to tell you in real language what you are signing and what it really means. Agents can’t or won’t do that. They will often just tell you it’s industry standard and can’t be changed.
Well, screw industry standard. “Industry standard” should no longer mean that a writer must bend over and think of the Queen. (Yeah, I know, I mixed that, but you get the idea.)
Writers sell or license no rights. We are the publishers. We give no one a percentage of our money except for a distributor selling our books or a bookstore selling our books.
We don’t have to wait two years for a book to come out and then slow down to match a publishing schedule.
We don’t have to suffer through bad covers on our books. We can change them at any time. And we can hire good proofreaders who won’t screw up our books with a bad “house style.”
We don’t have books published dead.
We don’t have books go out of print unless we want them to.
And so on and so on…
In other words, in indie publishing, the writer does not give over control of his work to anyone.
With short fiction, I can see a real balance between traditional publishing and indie publishing. Both sides can go hand-in-hand and both sides help the writer’s work in different ways. Pay is good in traditional short fiction, contracts are good and give rights back quickly, often in less than a year.
With novels, until these rights-grab contracts stop and publishers start allowing authors to get their books back in five or seven or ten years, I can see no reason why any new writer or former mid-list writer should sign a traditional book contract.
I think writers, all fiction writers, need to start a new saying about traditional book publishing.
“We don’t need them. They need us.”
That said and with that attitude, here are my suggestions for what needs to be in a contract with a traditional publisher. (All general, no legal language. And no increased money over what a sales force thinks a book will sell.)
1) Contract must end at a certain date between five and ten years after publication. (Publication must be within one year of the signing of the contract.) No “speed limit” thinking. Just a final date that the publisher either reverts all rights or makes an offer to buy the book again.
2) No contractual obligations to not write something. In other words, no do-not-compete clauses. Period. And no clauses that allow the publisher to be the only person to see the next work in the series. Make them prove to you that you want to keep working with them before you give them your next book. Remember, with indie publishing, you no longer need them. They need you.
3) Strict performance guidelines on the publisher side. That means if they say a book will be available for sale on August 1st, it had better be available. Right now in most contracts, all the performance deadlines and repercussions are on the writer. That needs to be balanced.
4) All money and paperwork must be sent to the writer first. Period. No agency clauses in any contract. If a writer hires an employee such as an agent or lawyer, it is up to the writer to pay them. That is between the writer and agent or attorney. A third-party agreement does not belong in a publishing contract between a writer and a publisher.
I know, I know, all just basic business stuff. Basic to anyone not inside of publishing, but horrid to any publisher or agent or traditionally-published writer reading this. But my goal with this blog has always been to bring some basic business sense to writers.
Publishing is a business, after all.
My Statement About My Writing
After the last two years, after watching indie publishing grow, watching and helping WMG Publishing grow, I can’t imagine ever signing another traditional contract with the above terms in favor of the publisher. And right now no publisher would cave in on any of those terms. (Notice once again, I’m not asking for more money in any of those clauses. Just respect.)
I am not saying I will never publish another book with a traditional publisher. If the right offer comes along, with the right terms, or the right project in WFH with the right amount of money for my time, I might do another.
But right now, the math, the income, and the ugly traditional publishing book contracts makes me turn away after three decades.
But at the same time my writing is increasing speed. You will start seeing my original novels this spring and summer, including a new thriller, some Poker Boy novels, some young adult books, and even a new fantasy in the tradition of City Knights. Plus Dee W. Schofield has a novel done called Dust and Kisses and another half done called My Subway Martian Lover.
And I have some backlist novels that will get back into print as well. Finally.
And, of course, more challenge stories here.
All will be coming out from WMG Publishing, a company with good contracts and built by writers for writers.
So I am now no longer a balanced voice I’m afraid. I’ll sell short fiction to traditional publishing, but unless something very unusual happens, I’m an indie novel writer.
Honestly, I haven’t felt this free and happy about writing since the early 1980s.
And, as I have come to discover, I missed that feeling.
Copyright © 2012 Dean Wesley Smith
Cover art copyright Philcold/Dreamstime
This chapter is now part of my inventory in my Magic Bakery. I’m giving you this small slice as a sample. I’m giving you a taste, but not selling any of the pie.
If you feel this helped you in any way, toss a tip into the tip jar on the way out of the Magic Bakery.
If you can’t afford to donate, please feel free to pass this chapter along to others who might get some help from it.
And I would like to thank all the fine folks who have donated over this last year. The donations and the comments both after the posts and privately are really keeping me going on this. Thanks!